Scatmag.com

July 2018

TRAI TARIFF IMPLEMENTATION BY NOVEMBER 2018?


As Per Current Status, The TRAI's Tariff Order - Exactly As Passed By The Madras High Court - Will Be Implemented By November 2018.


BACKGROUND

The TRAI declared "The Telecommunication (Broadcasting & Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017" on 3 March 2018.

We have provided a detailed review of the Order and its implications, in the April 2017 issue.

Star TV immediately stalled the tariff order by appealing in the Madras High Court. STAR TV employed a team of very high-profile lawyers including P Chidambaram & Abhishek Singhvi.


AFTER HC JUDGEMENT

The Madras HC provided both parties - STAR TV & the TRAI 2 weeks' time to appeal to a higher court or seek further clarifications from it.


TRAI's Complete Tariff Order OKed By Madras High Court
- Except On restriction Between A-La-Carte & Bouquet Prices.


NO APPEAL

The Madras High Court decision was not appealed by either STAR or TRAI. Hence, the majority judgement will be implemented.

There Has been No Appeal Against The Madras HC Judgement
- Hence It Will Be Implemented





ONLY CAVEATS

TRAI, STAR India and the All India Digital Cable Federation (AIDCF) have filed caveat in the Supreme Court, in this matter.

A caveat is simply a notice to the court, that if the court decides to hear a matter, they should inform the person who has served the caveat and hear that person's views before taking a decision.


DELAY FOR DELHI HC DECISION

Meanwhile a similar case is pending against the TRAI in the Delhi High Court. It involves Bharti Airtel Telemedia, Tata Sky and Discovery Communication India, which had filed petitions against the tariff order in 2017. The TRAI had then informed the court that the issues raised in the petitions were the subject matter of two writ petitions already filed in the Madras High Court and requested that it may await the outcome of those proceedings.

The Delhi high court had accepted the request but had directed TRAI that it should inform it and the petitioners about the judgment before effectuating the orders.

Additionally, the Supreme Court too had ordered the maintenance of status quo as far as the pricing regulations were concerned.


DELHI HC IN JULY

The courts are on vacation and will resume in early July. The pending matter will then be address in the Delhi High Court.

If the parties involved do not argue matters further, the Delhi High Court & the Supreme Court should dispose off the matter by end July 2018.

The TRAI tariff orders provide for a 90 period before the orders are implemented. If all concludes by end July and the TRAI declares its implementation immediately, the Tariff order would come into effect 90 days later, i.e. by 1st November 2018.

The Tariff Order Is Likely To Be Implemented Around 1st Nov 2018, Soon After SCaT 2018



HIGHLIGHTS

The April 2017 issue of this magazine has analysed various aspects of the 2017 TRAI Tariff Order. For the convenience of our readers, the review can be downloaded free from our website at: www.scatmag.com/2017tariff.pdf

However, below we highlight some salient points in the Tariff order as it is likely to be implemented in November 2018.


NO A-LA-CARTE PRICE CAP

This is a major loss for consumers who will continue to be misled by over-inflated a-la-carte prices of Pay channels. Broadcasters will show consumers a massive discount if they purchase entire bouquets. This will, ineffect force consumers to accept bouquets consisting of channels that they do not watch.

Broadcasters will then show-off irrelevant subscriber numbers, which are not related to viewership.


No A-La-Carte To Bouquet Price Cap Will Deprive Consumers The Choice To Select Only The Channels They Want - A Key Benefit Of DAS


MRP TO CONSUMERS

As per the tariff order, the broadcasters must convey to each consumer the following:

 A-La-Carte MRP for each Pay Channel

 The a-la-carte MRP must be indicated on the EPG.

It is hoped that with this requirement, consumers will become aware of the actual channel prices (a-la-carte & bouquet) charged by broadcasters and reduce the blame on the Cable TV networks that merely deliver the content to them. n



TARIFF ORDER AT-A-GLANCE SUMMARY

 Distribution Networks (CATV, HITS, DTH & IPTV) receive a 20% 'Distribution Fee' from Pay Broadcasters.

 Distribution Networks receive a "Network Capacity Fee" for (FTA + Pay) Channels from consumers:

 ₹ 130 max (tax extra) For first 100 SD Channels

 ₹ 20 max (tax extra) for each block of additional 25 SD channels

1 HD Channel = 2 SD Channels for computing Network Capacity Fee

 Distribution Networks can create their own bouquets but must also offer the broadcasters' bouquets.

 Distribution Networks must create & offer a "Basic Tier" of at least 100 FTA Channels containing Mandatory DD Channels + at least 5 FTA Channels each from Gen Entertainment, Devotional, Infotainment, Kids, Movies, Music, News, Sports, Misc.

 Distribution Networks can charge Broadcasters a Carriage Fee Of Upto ₹ 0.20 per SD Channel & ₹ 0.40 per HD Channel, depending on % subscribers for that channel on the network.

 Distribution Networks can charge any placement fee.

 Broadcasters Must Declare Consumer Price For Each a-la-carte Pay Channel, which must show on the EPG.

 A-la-carte price (also called MRP) must be same for CATV, HITS, DTH & IPTV

 Broadcasters MRP is applicable All India. (Same price for DAS-1,2,3 & 4)

 Broadcaster May Offer Each Channel on an A-la-carte option.

 Broadcaster can create a bouquet of Pay Channels from the same broadcaster only, declaring a consumer price for the bouquet.

 FTA Channels cannot be added to a Pay Channel Bouquet.

 Pay Channels with MRP above ₹ 19 Cannot be part of any bouquet.

 SD and HD Channels Cannot be Combined In The Same Bouquet.

 There is no restriction on Bouquet Discount.

 Broadcasters can specify the minimum / maximum duration of subscription. Hence eg: a sports channel can specify that it must be subscribed for at least 12 months.

 Same Quality Of Service Norms for CATV, HITS, DTH & IPTV.

 No price regulation for STB Sales & Rentals.

 Max STB Installation Charge: ₹ 350. Max Activation Fee: ₹ 100.

 Compulsory Pre-Paid & Post-Paid Options To Consumers.

 Web Based Customer Portal Compulsory.