Scatmag.com

May 2017

TRAI'S NEW TARIFF ORDER IMPLEMENTED


On 28 April 2017, the Madras High Court rejected Star India and Vijay Television's petition seeking an interim stay on the TRAI's March 2017 tariff order. Hence the TRAI's new (2017) tariff order came into force from 2 May, & commercial operation of new agreements will start from 1 September.


New Agreements Will Be Commercialised From 1st Sept 2017


The case will now be heard and concluded on 12 June 2017. Star India claims the TRAI order violates the rights of the Copyright holders, who should be at liberty to fix pay channel prices.

Incidentally, the TRAI tariff order does not restrict any pay channel price, and hence Star does not have much of a case, according to industry observers.

The implementation of the TRAI's tariff order on 1st September is subject to the decision of the Madras High Court.






IMMEDIATE IMPLEMENTATION

The following clauses of the tariff order must be put in motion immediately (i.e. from 2 May 2017):


CHANNEL DECLARATIONS

Every channel must declare its genre, from those listed in the Basic Service Tier.

Every channel must declare if its Free-To-Air (FTA) or Pay.


A-La-Carte Price (MRP) Is Compulsory. Bouquets Are Optional



ALL PAY CHANNELS

1. No Price Restrictions. All channels must be offered to consumers a-la-carte. This price is also referred to as Maximum Retail Price (MRP).

2. Channels priced above Rs. 19 cannot be included in any bouquet. Must be offered a-la-carte only.

3. Bouquet price to consumers, cannot be less Than 85% of a-la-carte price.

4. Same Price Applicable All India & For Cable, HITS, DTH & IPTV.


BOUQUETS

The association had also pointed out that import duty under India-ASEAN FTA had gone down


Channels Priced Above Rs. 19 Can Only Be Offered A-La-Cartel



BROADCASTER'S BOUQUET

No FTA Channels to be bundled in pay channel bouquets.

Bouquet must contain pay channels of same broadcaster only.

SD & HD versions of the same channel are not permitted within a bouquet.

Channels priced above Rs. 19 cannot be included in any bouquet.


DISTRIBUTORS' BOUQUETS

Can include a mix of pay channels from various broadcasters.

Cannot include any FTA channels in a Pay bouquet.

Cannot split any broadcaster's bouquet into multiple separate bouquets.

Cannot exceed broadcaster's price & cannot be below 85% of MRP.

Separate FTA bouquets can be offered. Only a Network Capacity Fee can be charged for such FTA bouquets.


BASIC SERVICE TIER (BST)

Every distributor must offer at least 1 Basic Service Tier bouquet of 100 FTA channels including all the 'Must carry' govt channels.

This bouquet must contain 5 channels of each genre:

1. Devotional

2. General Entertainment

3. Infotainment

4. Kids

5. Movies

6. Music

7. News & Current Affairs

8. Sports

9. Miscellaneous

If 5 FTA channels are not available of a particular genre, channels of other genres can be substituted. Network Capacity fee must be paid by the consumer for the BST.


CONSUMERS' CHOICE

A Consumer can select any broadcasters' or distributor's Bouquets or individual (a-la-carte) channels.


Consumers Must Pay A Monthly 'Network Capacity Fee'



NETWORK CAPACITY FEE (NCF)

Every consumer must pay his network, a Network Capacity Fee (in addition to Pay Channel prices) which cannot exceed:

Rs. 130 (taxes extra) for first 100 SD Channels + Rs. 20 for each additional block of 25 SD channels. (1 HD channel = 2 SD channels).

'Must Carry' government channels included in the 100 SD channel NCF.

NCF can be discounted to any level (even reduced to zero), by the distribution platform.

NCF must be fixed for 6 months.


Broadcaster Must Pay Atleast 20% MRP As Distribution Fee, Uniformly To All Distribution Platforms.



DISTRIBUTION FEE

Every Pay channel broadcaster must provide atleast 20% of the MRP as distribution fee, which must be uniform for all distribution platforms (CATV, HITS, DTH & IPTV).


Carriage Fee: Upto 20p / SD Channel / Active Sub.



CARRIAGE FEE

Distributors can charge broadcasters a "Carriage Fee" for FTA & Pay Channels' carriage on the CATV, HITS, DTH or IPTV platforms. It excludes placement fee (see below).

1. Every distributor must declare its carriage fee, charged transparently to each channel.

2. Max permitted Carriage Fee is 20 paise (SD per channel) & 40 paise (per HD channel) per active subscriber per month.

3. Carriage fee can be discounted upto 35% by the distributor, in a uniform & quantifiable manner.


CALCULATION OF CARRIAGE FEE

The maximum carriage fee charged must diminish as more subscribers of that platform view the channel, as detailed in Table 1.


Channel Opted By % Of Subscribers Carriage Fee Payable
Less Than 5% Full Carriage Fee*
5% but less than 10% 75% Carriage Fee*
10% but less than 15% 50% Carriage Fee*
15% but less than 20% 25% Carriage Fee*
20% or more Zero Carriage Fee*

Table 1: Carriage Fee Chargeable By Distributors To Broadcasters.



PLACEMENT FEE EXTRA

A distribution platform can also charge an addition 'Placement fee' for providing specific placement of a channel in the Electronic Programme Guide (EPG)or for assignment of a particular channel number.

As an example, a placement fee can be charged for including in a particular bouquet, or for numbering or placing a channel in the top 3 numbers of a bouquet.

The placement fee is not regulated. There is also no dictate that the placement or marketing fee must be charged uniformly to all broadcasters, or at any pre-declared rate.


BROADCASTERS' OBLIGATIONS

No broadcaster shall engage in any practice that prevents any other distributor from obtaining signals.

Distributors must receive TV signals within 30 days of the interconnect agreement & without any unreasonable terms or conditions.

A broadcaster cannot demand a particular position in the EPG or assignment of a particular channel number, or demand a minimum subscriber count, for providing signals.

A broadcaster cannot influence packaging of a channel in any distributor's bouquet.

Broadcasters must Invoice monthly, based on the distributor's subscription report & allow atleast 15 days for payment.


DISTRIBUTORS' OBLIGATIONS

"Distribution Platform" means a DTH operator, MSO, HITS or IPTV operator.

No distributor can engage in any practice with any broadcaster, that denies network access to other broadcasters.

No distributor shall engage in any practice or activity that prevents any other LCO from obtaining signals from the distributor.


SUMMARY

The above is a summary of some of the most important clauses of the TRAI's March 2017 Tariff & Interconnection Regulations, also detailed last month in the magazine.

The June issue of Satellite & Cable TV magazine will carry details of all broadcasters' a-la-carte & bouquets prices, discounts etc.

n