TRAI’s New Tariff Order (NTO2) After Effect on Broadcasters, MSOs, Cable TV Operators, Subscribers / TV Viewers

TRAI’s New Tariff Order (NTO2) After Effect on Broadcasters, MSOs, Cable TV Operators, Subscribers / TV Viewers

Cable TV Billing will be more complicated now. Network Capacity Fee (NCF) does not involve any share to PAY TV Broadcaster.

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All three modes of delivery, i.e. CATV/DTH/HITS, of real time broadcasts in residential segment, constitute real time broadcast, under MIB and operating on the lines of Digital Addressable System as envisaged in Cable TV Networks Regulation Act 1995 Amendment 2011. All these are terminating into an interface known as STB(Set Top Box) with a wireline input and Audio Video or HDMI output to display on the Domestic TV receiver in customer premises. TELCOs,like JIO and Airtel, too, have wireline presence in residential segment over UTP cable, providing voice and data. Jio & Airtel both are providing Telco services via FTTH, where it is voice in real time but both Broadband & Video depend on server based access. Telco services fall  under DOT. They may  not have registration for operating a DAS headend  by MIB, so they may not be  running real time rebroadcast video over their FTTH network right now. But after getting required registratuion from MIB, the situation will be different. CATV services, as stranded now, are uni-directional and hence unable to provide voice, video and data simultaneously over coaxial cable.

All TRAI Regulations, in spirit, claim to be for benefit of consumers, i.e. viewers in this case. Video broadcast viewers receive their content over wireless satellite casting direct, i.e. without an intermediary like a cable operator(CO), whereas CATV and HITS both are delivered by the intermediary i.e. Cable Operator. Thus CATV and HITS, both, comprise of a DPO constituted by Headend Service Provider(HSP) and CO. The all video broadcast services in DTH/HITS/CATV are monthly subscription based for individual programs to be billed (a) for getting connrected i.e. Network Capacity Fee (NCF) with rates for number of programs selected by the viewer, (b) pay content sepaarately, though included in program count in NCF and (c) Taxes as applicable. COs constitute a sizeable number in the DPO chain. Therefore, they demand a share in subscription outflow from Subscriber on all counts, except taxes. COs feel that TRAI is apathetic to their role in providing services when it comes to recommending subscription appropriations. They blamed TRAI for NTO-1 for restricting and charging for number of programs to be viewed by subscriber (thru NCF) and enhancing payouts if subscriber wanted, as before, to continue viewing over 300 programs and axing discounts which were being given by COs on additional TV sets in the same home. Based on this grievance, TRAI brought out NTO-2 wherein additional TV sets were permitted 60% discount on NCF for first TV Set. Now the crib is why NOT similar discount on PAY content too. Hence COs are not happy over NTO-2. Their contention appears to be that if TRAI  is really interested in benefiting consumers, they should get Cable Act amended to make all content free to viewer, repeal requirement of encryption for content protection, retain only digitization to enhance network transportation capacity, make STBs only D2A converters and let COs decide monthly subscription to be charged and what percentage of such charge to be remitted to HSP. This means empowering LCO first and then subscriber.

Except Prasar Bharati’s Door Darshan all broadcast tv content is in business under Cable act which does not provide for bundling i.e. bouquet construction. All content, according to Cable Act, is expected to be a-la-carte. But bundling  has been legitimated by TRAI. While PAY Broadcasters are free to price their content MRP at will, without disclosing the basis for pricing, TRAI is authorized to regulate the bundles and their pricing. Provision of bundling, contrary to Cable Act is indeed a gift from the regulator. Imagine what will happen if Cable TV Act is enforced in letter and spirit and only a-la-carte rate is enforced.

Prior to NTO1, cable operators were giving discount at their level. They were not charging same monthly subscription for every TV set in the same house but without a bill and receipt. NTO envisaged billing for every TV set even if in same house. Then cable operators cribbed that subscriber was cursing TRAI for higher payout. Now TRAI has legalised discount on additional TV set in same house. Bill will have to show NCF for every STB and then deduct discount for additional TV amounting to net NCF payable for on Subscriber ID. Discount is only on NCF NOT on PAY content on additional TV. Billing will be more complicated now. NCF does not involve any share to PAY tv broadcaster.

CATV DPOs are considered a joint entity with HSP i.e. CATV DPO = (HSP + CO). Perhaps COs think differently.There is no change on NTO as far as itemized billing of pay content is concerned. In NCF, basic number of programs is increased to 200 +Mandatory 28 DD. Further with Rs 160/- restriction on program count in NCF is unlimited.

Some COs voiced suggestion to reduse GST from 18% to 5% to make Cable TV cheaper for viewers.TRAI has no jurisdiction in taxation policy. Nor have MIB or DoT. That is in domain of FM. TRAI regulations always state taxes extra as applicable.

Telecom works under aegis of Telegraph Act 1885 and is governed by DoT drawing personnel from ITES where from staff in TRAI too is drawn. This statement from IBF is unfair.

Telecom from inception has been a usage based pay service. Broadcast Engineering is not taught in India. CATV is not accorded status of broadcast by MIB. It has sizeable revenue volume but is not providing QoS accredited by proof of performance certification. Hence rules on ground get implemented as legislated. TRAI tends to regulate uni-directional video delivery over wireline medium with fixed monthly subscription drawing anomaly from TELCOs, far more organized with robust billing systems and practices. This vocation under MIB needs skills enrichment and qualitative requirement compliance.

Cable Networks are uni-directional delivering video signals only in subscriber homes under Cable Act governed by MIB and regulated by TRAI. To compete with TELCOs entering residential segment with 3Play over FTTH, COs shall have to provide  3play on Coaxial drops, broadband, through Cable Modems (DOCSIS) will have to be integrated at headend, with networks upgraded to handle 1024 QAM while present last mile can’t handle 256 QAM everywhere. Two options with LCOs, therefore, are first, continue video from MSO on coaxial cable with franchise from another ISP on CAT5 drop and bill subscriber separately for video and broadband; Second persuade MSO/HSP to integrate broadband on cable modem using DOCSIS on ISP licence from DoT. Another option is to join TELCO, divorcing MSO and dismantling coax network by joining TELCO for FTTH 3Play.

Views of  Lt. Col. VC Khare (Retd) sent through WhatsApp

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