Scatmag.com

September 2019

SUGGESTIONS FOR REVISED TARIFF ORDER



The New Tariff Order was primarily intended to enable consumers to select and pay for only those channels that they actually watch. The purpose was to reduce consumer spending on paying for unnecessary channels due to grossly inflated bouquets. Consumers were driven to these inflated bouquets by false and exaggerated prices of Pay Channels offered on an a-la-carte basis. Prior to the New Tariff Order, a-la-carte prices of several channels range from double to 10 times their effective bouquet prices (see 'The Farce Of Broadcaster Pricing').

The Pay TV industry is extremely litigious. Almost every TRAI regulation has been challenged all the way to the Supreme Court.

On the other hand, the industry is clearly over regulated with TRAI trying to regulate and authorise the minutest detail. There is a new TRAI regulation almost every month for the past 5 to 10 years. This makes working unstable, unpredictable and contentious.


NTO Needs Simplification - Avoid Complex Options & Micro-Regulation


The industry on its part, tries to find loopholes to TRAI's declared regulations which in turn leads to modify or new regulations. It is a vicious un-ending cycle.

Exactly the same has been played out in the case of the New Tariff Order.



CONSUMERS BEWILDERED

As a result of micro regulation, the New Tariff Order is extremely complex. Consumers have been bewildered and are unable to fully understand their options. Selecting channels has now become more complex and elaborate than filing ones Income Tax returns!

DPOs have either preferred not to or simply unable to structure their subscriptions portal to accommodate the myriad options offered to the consumer in selecting their monthly TV entertainment.



SIMPLIFICATION REQUIRED

Rather than modify the existing NTO with even more convoluted micro regulation, the need is to radically simplify the NTO, maybe restructure it within the existing broad framework of the New Tariff Order.


NTO ISSUES

TRAI has pointed out multiple concerns and issues why implementation of the NTO has failed to facilitate consumer choice and has instead inflated the monthly TV spend. These include:

  • No 15% cap on bouquet discounts
  • Inflated a-la-carte prices
  • Poor options by DPOs
  • Unfathomable choice of bouquets.
  • NCF split between MSO and LCO
  • Payment for Doordarshan channels
  • No discount offered for Multi TVs

SUGGESTED RESTRUCTURE

Satellite & Cable TV magazine would like to suggest restructuring the New Tariff Order as follows:


Bouquets Should Be Disallowed - Only A-La-Carte Channel Selection By Consumers



REMOVE BOUQUETS

Pay Channel Broadcasters, DPOs and the regulator continue to play a cat and mouse game on clubbing of unnecessary channels that the consumer is compelled to take. The regulator has even implemented the NTO in good faith which has been misused by both - Pay Broadcasters and DPOs.

The ideal solution would be to disallow all Pay Channel bouquets.

Pay Channels will then be offered on an a-la-carte basis only and then will be forced to declare realistic pricing and choice to the consumer. The move will resolve issues of excessive and irrelevant bouquets that bewilder the customer. This is a radical move and maybe pay broadcasters will once again challenge it in Court. The regulator should consider its legal response or alternately to structure its Revised Tariff Order (RTO) to discourage bouquets.


100% NCF To LCOs



NCF AND ITS SHARING

The NTO has a very elaborate structure for calculating the NCF. Consumers have to pay NCF, not only for their Pay Channels but also on FTA Channels, making the selection of total channels elaborate and cumbersome. Further, consumers also have to pay receive the compulsory Doordarshan channels. The NCF structure needs to be radically simplified for ease of implementation both for the consumers and DPOs. Satellite & Cable TV magazine suggests the following simplified NCF structure:

  • ₹ 100 NCF for 100 TV channels
  • ₹ 150 NCF for unlimited TV channels
  • DPOs not permitted to discount NCF to avoid predatory pricing
  • 100% of NCF must be given to LCOs

Only 2 NCF Slabs



COMPULSORY CHANNELS

The list of compulsory channels has swollen to 24. These include several regional language channels which are generally not of interest to everyone. However, given the cultural diversity of consumers in towns and cities which are turning increasingly cosmopolitan it is desirable to carry all the compulsory channels.

However, consumers must not be burdened with the NCF for compulsory channels that they do not watch.


DD Must carry Channels Should Be Excluded From NCF


Hence, all compulsory channels including the Doordarshan channels, Lok Sabha TV and Rajya Sabha TV must be delivered Free to all active consumers and not accounted for in the NCF of ₹ 100 proposed above.

Inactive consumers who have not paid any NCF or subscriptions will not receive the compulsory channels.


MULTI TV DISCOUNTS

Since there is no aggregation of TV channels in bouquets and all channels are sold as standalone only, it is not necessary to provide any multi TV discount. This will significantly signify tracking and computing cable TV/ DTH charges to the consumer.


No Discounting Of NCF Permitted, To Prevent Predatory Pricing




NO DISCOUNTS BY DPOS

DPOs must not be allowed to discount the NCF. This will enable uniform pricing to all consumers, irrespective of the delivery platform.

It will also disable predatory pricing by large corporates/ new entrants or even State Governments which could subsidise loss of revenue through their other operational incomes or even public taxes (as in the case of the Tamil Nadu State Government).


CALL TO LCO ASSOCIATIONS

Past submissions to TRAI have proved that DAS MSO Associations such as the AIDCF (All India Digital Cable Federation) have submitted recommendations which only further their monopolistic interests - to the determent of LCOs.

Hence LCO Associations are called to submit their viewpoints to the TRAI, looking after the interests of their members (LCOs), on this consultation paper. n