Trai sets new rules on à la carte channel prices, network capacity fee

Trai sets new rules on à la carte channel prices, network capacity fee

The telecom regulator, which also regulates broadcasters, has set a ₹160 price ceiling for all channels available on a distributor’s platform as it moved to reduce rising costs for subscribers, a fallout of its 2019 tariff order.

In a statement on 1 January, the Telecom Regulatory Authority of India (Trai) said that it had decided to modify certain provisions of the new tariff order (NTO), implemented in February 2019, to address the issue of huge discounts offered by broadcasters when channels are sold as a bouquet vis-à-vis sum of the cost of à la carte channels.

“One, the sum of the à la carte rates of the pay channels (MRP) forming part of a bouquet shall in no case exceed one-and-a-half times the rate of the bouquet of which such pay channels are a part; and two, the a la carte rates of each pay channel (MRP), forming part of a bouquet, shall in no case exceed three times the average rate of a pay channel of the bouquet of which such pay channel is a part,” Trai said in a statement on Wednesday.

In August, Trai issued a consultation paper to re-look at imposing restrictions on discounts offered by broadcasters on channel bouquets after the implementation of the new regulatory framework for cable and broadcasting services.

The lack of any caps on discounts offered on bouquets, compared to a la carte channel pricing, is being “misused to throttle market discovery of TV channel prices, by giving huge discounts on the bouquets,” the regulator had said.

According to NTO 2019, consumers could choose the TV channels they want to watch and pay only for them at maximum retail prices (MRPs) set by broadcasters, instead of the pre-set bouquets offered earlier. The new tariff order was expected to make channels cheaper for the consumer and offer more choice. However, on ground, the opposite happened as the cost of like-to-like channel options went up.

In view of the criticism of NTO, Trai sought views from the broadcasting industry stakeholders on another consultation paper on the subject, a move Trai chairman R.S. Sharma said was more of a fine-tuning rather than a change in the basic framework.

Additionally, the statement issued on Wednesday said Trai has decided that only those channels with MRP of ₹12 or less will be permitted to be part of the bouquet offered by broadcasters.

Further, Trai has mandated the provision of 200 channels in maximum NCF (network capacity fee) of ₹130 excluding taxes per month. It has also been decided that channels declared mandatory by ministry of information and broadcasting will not be counted in number of channels in the NCF. DPOs (distribution platform operators) have also been mandated that they will not charge more than ₹160 per month for giving all channels available on their platform.

Trai has also decided that in case of multi-TV homes where more than one TV connection is working in the name of a person, DPOs can charge a maximum 40% of declared NCF for second and additional TV connections.

In the statement, Trai said that broadcasters are required to publish revised MRP of a-la-carte channels and bouquets on their website by 15 January 2020 and DPOs are required to publish revised DRP of a-la-carte channels and bouquets on their website by 30 January 2020.

“Consumers will be able to benefit as per the amended provisions with effect from 1 March 2020. The Authority is of the view that the amendments will usher in better consumer offerings, more flexible tariff schemes and more choices for consumers,” the statement said.

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