Key Highlights of New Tariff
Order and Interconnection Agreement:
Telecom Regulatory of India
(TRAI) had rolled out a draft telecom tariff order (TTO) in October 2016. Post
final approval from supreme court of India TRAI rolled out Tariff Order and New
Interconnection regulation on 03 March 2017. This time TRAI have attempted to
ensure transparency, non-discrimination, consumer protection and create an
enabling environment for orderly growth of the sector. Following points
specified in the regulation will have an impact on the broadcasting sector:
Multi-system Operators /
New regulation demands declaration of following
details to the authority & on a public portal, every distributor of
television channels shall, within thirty days from the commencement of these
regulations or within thirty days from the commencement of its operations, as
the case may be, on its website, publish:
- Target markets as declared under sub-regulation
wherein every distributor of television channel shall declare coverage
area of each distribution network;
- The total channel carrying capacity of its
distribution network in terms of number of standard definition channels;
- List of channels available on the network;
- Number of channels for which signals of television
channels have been requested by the distributor from broadcasters and the
interconnection agreements signed;
- Spare channel capacity available on the network for
carrying signals of television channels; and list of channels, in
chronological order, for which requests have been received from
broadcasters for distribution of their channels, the interconnection
agreements have been signed and are pending for distribution due to
non-availability of the spare channel capacity.
Regulatory also mandated the MSOs to specify the
territories of interconnection agreement. Following are the details for
describing the territories for distribution of signals of television channels:
- The registered area of operation of the multi-system
operator as mentioned in the registration granted by the central government;
- The names of specific areas for which distribution of
signals of television channels has been agreed, initially, at the time of
signing of the interconnection agreement; and
- The names of the corresponding states/ union
territories in which such agreed areas as referred in clause (b) of this
sub-regulation are located.
Compliance officer will be designated by the
broadcaster and the distributor of television channel; who will ensure:
- generating awareness for ensuring compliance with the
provisions of these regulations;
- reporting to the Authority, with respect to
compliance with these regulations and directions of the Authority issued
under these regulations; and
- ensuring that proper procedures have been established
and are being followed for compliance of these regulations.
To ensure smooth functioning and speedy
restoration, the MSO will have to provide the LCO with at least 2% of total
STBs active in LCO’s network with an upper cap of 30 spare STBs - as
maintenance which are not pre-activated.
Distributors of television channels shall submit
monthly subscription reports of channels and bouquet of channels to respective
broadcasters as per the format specified under the Schedule VII, within seven
days from the end of each calendar month. However, broadcasters will hold the
authority to disconnect its television channel after giving a written three
weeks’ notice, if DPOs fail to provide monthly subscription report.
The DPOs shall arrange a consumer friendly
electronic payment options within SMS.
Authority through the new regulations has
introduced a revised format submission of monthly subscription reports to
broadcasters wherein the monthly average subscriber count will be derived based
on the following format:
Local Cable Operators:
In the new regulation, authority has mandated
LCOs to submit the Customer Application Form (CAF) to MSOs within 15 days.
The network capacity amount and distribution fee
amount shall be shared in the ratio of 55:45 (MSO: LCO) between multi system
operator and local cable operator respectively.
The LCO shall not replace STBs of the MSO with
the STBs of any other MSO without prior receiving the requests from the
subscribers through application forms for returning the STB of existing
connections and for providing new connections through Customer Application
Form. The new Set Top Box shall be activated only after entry of the customer
details, as provided in new Customer Application Form, into the Subscriber
Management System of the new MSO.
Each channel of broadcaster should now be
offered to the distributors of television channels on a-la-carte basis.
However, provided that the broadcaster may also offer its pay channels, in
addition to offering of pay channels on a-la-carte basis, in form of bouquet.
However, the bouquet should not include any "Free to air channel" and
High Definition (HD) and Standard Definition (SD) variant of the same channel.
As specified under the new regime, Broadcaster
shall not propose, stipulate or demand for packing of the channel in any
bouquet neither directly nor indirectly to the distributor of television
channels to subscribers.
Minimum guarantee commitment or minimum
subscription percentage on subscriber base on its channel or bouquet shall not
be proposed by Broadcaster directly or indirectly.
Payment of minimum guarantee amount for
providing signals for television channels, shall not be demanded from other
Further broadcaster can offer its pay channels
in the form of bouquet(s) and declare the maximum retail price(s), per month,
of such bouquet(s) payable by a subscriber. However, such bouquet shall not
contain any pay channel for which maximum retail price per month is more than
Broadcaster will have a liberty to offer
promotional schemes to the distributor of maximum retail prices per month on
a-la-carte pay channels however, the overall period should not exceed 90 days.
Also, the frequency of any such scheme by the broadcaster should not exceed
twice in calendar year.
A broadcaster will need to publish the reference
interconnection offer on its website, so that it is in the compliance with the
regulatory, for providing the signals of all its pay channels to the
distributor of television channels. This should be done within 60 days of commencement
of the tariff order or before launching the pay channel in case of new pay
“As on 5th
May 2017 – Sony Pictures Network India (SPNI), ZEEL, IndiaCast (which
represents TV18 and Viacom18), Sun TV Network and Disney India have filed their
respective RIOs in compliance with TRAI regulations. Star India has written to
the Authority (TRAI) seeking 10 more days to publish its reference interconnect
offer (RIO) under the new tariff order regime.”
As specified in the regulations, the maximum
discount a broadcaster can provide on distribution fee should not exceed 35% of
the MRP of its pay channel or bouquet of pay channel.
A minimum of 20% of pay channel MRP or a bouquet
of pay channel of every broadcaster shall be declared as distribution fee.
Provided that the distribution fee declared by the broadcaster shall be uniform
across all the distribution platforms.
Broadcaster shall allow window of fifteen days
to the distributor of television channel for making payments
Service provider shall not disconnect the
signals of television channels without giving at least three weeks’ notice in
writing to other service provider, clearly specifying the reason. In such
cases, the subscribers of the particular network shall be informed fifteen days
prior to the disconnection of signals of such television channels through
scrolls on channels proposed to be disconnected.
Every broadcaster shall declare the genre of its
channels and such genre shall be either:
News and Current Affairs
The authority has also prescribed a rental fee
of up to Rs 130 per month, excluding taxes, which distributor of television
channel can charge from subscribers towards their distribution network cost to
carry 100 SD channels.
Subscribers will have to pay additional Rs 20
per month excluding taxes for additional network capacity in bundles or lots of
25 SD channels.
Provided further that the maximum retail price
per month of such bouquet of pay channels shall not be less than eighty five
percent of the sum of maximum retail prices per month of the a-la-carte pay channels
forming part of that bouquet.
As specified under the new regime a minimum of
20% of the maximum retail price of the pay channel or a bouquet of pay channel
of every broadcaster will considered as distribution fee.
The regulator has capped carriage fees for
standard definition (SD) channels at 20 paisa per channel per subscriber per
month and 40 paisa for high definition (HD) channels in the regulation.
The maximum discount a distributor of television
channel can offer to a broadcaster for carriage fee should not exceed 35%.
TRAI through this regulation has regularized the
Every distributor of television channels shall,
once in a calendar year, cause audit of its SMS, CAS and other related systems
by an auditor to verify that the monthly subscription reports are complete and
Provided further that any variation, due to
audit, resulting in less than zero-point five percent of the billed amount
shall not require any revision of the invoices.
Incase the Broadcaster if of the view that
requirements are not being adhered by the distributors, then it shall be
permissible to the broadcaster to conduct the audit against such distributors.
As specified under Schedule II of the
interconnection regulation 2017 - The distributor of TV channel will have to
submit the copy of the report of the auditor in compliance of schedule III of
Telecom. (Broadcasting and Cable) services Interconnection (Addressable System)
The DPOs can now get their systems certified from
the auditor empaneled with TRAI.
Key Technical Amendments:
TRAI has also introduced some
welcoming changes in the revised schedule (SCHEDULE III) Some of which are
Non-alteration of the data and logs recorded in
CAS & SMS to ensure authenticity of the historical records for at least two
The regulation has restricted user access to
direct activate subscribers from CAS
Maintaining data and logs in CAS for at least
immediate preceding two years
Insertion of watermarking at encoder end only
Mandating the Copy Protection Systems for STBs
with recording facilities