Trai issues consultation paper on tariffs for commercial subscribers of cable TV services

The Telecom Regulatory Authority of India (Trai) released a consultation paper on `Tariff Issues Related to Broadcasting and Cable TV Services for Commercial Subscribers' on Wednesday, and has sought views / comments of the stakeholders.
Trai said it has given distribution platform operators (DPOs) namely multi system operators (MSOs), headend-in-the-sky (hits) operator, direct-to-home (DTH) or IPTV operator, the freedom to price and package the channels being offered to the consumers at the retail level, subject to certain conditions.

It is mandatory that the service provider offers all channels, available on its platform, on la carte basis and specify the maximum retail price for each channel, as payable by the ordinary subscriber. In addition to this, service providers are free to offer bouquet (packages) of channels.

They can package and price their channels as per their business plan, subject to certain conditions, prescribed in the said tariff order, as explained below:

In respect of retail tariff for DAS, every multi system operator (MSO) is required to offer a package of a minimum of one hundred free to air (FTA) channels as basic-service-tier (BST), including the prescribed channels of Prasar Bharati.

f a subscriber chooses to subscribe to only FTA channels, he can either choose the BST or any combination of up to 100 FTA channels, available on the operator's platform, in lieu of the BST offered by the MSO.

For this, the operator can charge a maximum of Rs100 per month (excluding taxes). However, as far as the la carte pricing of FTA channels is concerned, the DPOs are free to price such channels subject to the condition that the channels are uniformly priced.

The said tariff order also provides that a subscriber of DAS is free to subscribe to BST or/ and one or more pay channel or only FTA channels or only pay channels or pay channels and FTA channels.

In case, a DAS subscriber opts for one or more pay channels, in la carte or bouquet or a combination of la carte and bouquet, with or without BST or other FTA channels, the service provider can specify a minimum monthly subscription not exceeding Rs150 per month (excluding taxes).

However, if the total value of the channels / bouquets opted by the subscriber exceeds the limit, then the actual subscription charges are to be paid by the subscriber.

In other addressable platforms such as DTH, a subscriber is free to subscribe to channels on la carte basis or on bouquet basis or a combination thereof.

The tariff order provides that a service provider can charge a minimum subscription amount from a subscriber which cannot exceed Rs. 150 (exclusive of taxes) per month per subscriber towards channels chosen by the subscriber.

However, if the total value of the channels / bouquets opted by the subscriber exceeds the said limits, then the actual subscription charges are to be paid by the subscriber.

If a DPO chooses to offer pay channels only on la carte basis, there are no conditions on pricing of channels. However, if channels are also offered in the form of bouquets, a DPO is required to comply with twin conditions? which define a set of relationship between the la carte rate of channels, forming part of the bouquet, and the bouquet rate.

Defining commercial subscriber
Since a commercial subscriber would be the one who utilises the subscribed TV services at its commercial establishment, the same needs to be first defined appropriately. Commercial establishment has been defined in various Shops and Establishments Acts, enacted in different states.

Trai has already come out with a second tariff amendment order that categorised commercial subscribers into the following two groups - specified category of commercial subscribers and those not falling in thw specified category. The specified category comprises hotels with rating of 3 Stars and above; heritage hotels (as defined by the department of tourism, government of India); any hotel, motel, inn or commercial establishment providing board and lodging and having 50 or more rooms; and all other commercial subscribers (not falling under the specified category of commercial subscribers).

The tariff for cable TV services for the specified category of commercial subscribers was put under forbearance, to be mutually determined by the parties.

The tariff for commercial subscribers not falling in the specified categories and thereby coming under the second category was subject to the same charges as ordinary cable subscribers and thus the ceiling of rates prevailing as on 26 December 2003 was made applicable to them.

The tariff amendment order also provided that whenever a commercial cable TV subscriber belonging to either of the two categories uses the programme of a broadcaster for public viewing by fifty or more persons on the occasion of special events at a place registered under the Entertainment Tax Act, the tariff will have to be mutually decided between the parties concerned.

The order further provided that a commercial subscriber who falls in the 1st  category and has the facility of getting broadcasting services directly from the broadcaster, should be able to receive channels on la carte basis from the broadcaster. To prevent perverse pricing of channels vis--vis bouquets, the following pricing conditions were specified:

  • Maximum retail price of any individual channel shall not exceed three times the average channel price of the bouquet of which it is a part; and
  • The sum of the individual maximum retail prices of the channels included in a bouquet shall not be more than 150 per cent of the maximum price of the bouquet.

The big hotels providing variety of services have the capacity to protect their interests and cannot be treated at the same level as that of an ordinary cable consumer or even as that of large variety of commercial establishments which may require protection as that of the ordinary cable consumer.

They would ordinarily be in a position to deal with the broadcasters on an even keel in the negotiations.

The authority also noted that vis--vis the hotels which get a grading on the basis of the services provided, there is no such clear demarcation to identify or demarcate other institutions like hospitals, etc.

A similar dispensation was made in respect of commercial subscribers in CAS areas by an amendment to the Telecommunication (Broadcasting and Cable) Services (Third) (CAS Areas) Tariff Order, 2006.