NEW DELHI: The Telecom Disputes Settlement and Appellate Tribunal (Tdsat) has set aside Telecom Regulatory Authority of India‘s (Trai) ban on placement fee and invalidated with Trai requirement that multi-system operators (MSOs) report the basis of carriage fee charged by them to broadcasters.

The basic premise of Tdsat chairman S B Sinha and member P K Rastogi was that the Trai provision on placement fees was‘bad in law as the same restriction is not applicable for the DTH operator‘.

The Tribunal said placement charges, if any, will depend upon the mutual agreement between individual broadcasters and individual MSOs.

Similarly, the tribunal said the regulation on carriage fee is set aside as the said provision is not there for the DTH operators and MSOs in areas outside the four metros where delivery of television channels shifts compulsorily to digital mode from 1 November.

This tribunal order dents broadcasters‘ efforts to substantially cut down on their distribution costs. In fact, news broadcasters have decided to pay just 50-100 paise for every subscriber with a set-top box (STB) per channel per year, which works out to less than 5 per cent of what they pay as carriage fees now.

Tdsat has also set aside the requirement prescribed by Trai that MSOs must create capacity to carry 500 channels after digitisation. It said, "If the market forces play an important and significant role in the matter of carrying capacity of the MSO, the same may not be required to be regulated."

But it added in its 77-page judgment: "However, if the regulator deems it fit, it may consider making provision for MSOs to have capacity to carry number of channels based on different categories of area i.e. city/town/rural area etc. in which MSO will be operating."

The common judgment came on appeals by MSOs and local cable operators (LCOs) challenging the Trai Tariff Order relating to digital addressable systems (DAS), which refers to digital delivery of channels.

The LCOs failed to get any relief on their plea against the revenue sharing pattern of 55:45 on the basic service tier (free to air television channels) of Rs 100 and 65:35 on the upper tier of Rs 150 (combination of FTA and pay channels). Their appeals on revenue sharing were dismissed.

The Tribunal said an appeal relating to revenue sharing and under-declaration was already pending with the Supreme Court, which had ordered‘status quo‘. (The appeal was against an order of TDSAT of 15 January 2009 on a petition against TRAI by the MSO Alliance).

The Tribunal held as valid Clauses (1a), (1b), and (1c) of Section 6 of the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order.

The first clause relates to the‘must carry‘ clause relating to Prasar Bharati and Parliament channels, the second relates to a minimum 100 FTA channels in the BST (basic service tier), and the third says each genre must include at least five channels. The genres are news, infotainment, sports, kids, music, lifestyle, movies, and general entertainment in Hindi, English and the regional language of the concerned area. This section also gives freedom to the MSO to carry channels of other genres in case five channels of any genre are not available in the FTA bouquet.

On the 500-channel head-ends, Tdsat said: "What is more appropriate is that it is one thing to say that a particular system is capable of carrying maximum number of channels, but it is another thing to say that a headend with such capacity is necessary for the entire country. It is now a well settled principle of law that unequals cannot be treated equally. In that view of the matter, in the metropolitan towns like Delhi or in any town having more than ten million population, the choice of a customer may be a wide ranged one, but the said requirement may not serve any purpose in rural and semi-urban areas."

Referring to an issue raised by LCOs, the Tribunal said: "It is difficult for us to go into the factual aspects of the matter as to how the delivery and maintenance expenses can be recovered only from the cost of BST itself and, thus, the share of LCOs would make it possible for them to undertake proper services to the consumers. In the digital regime, the ultimate choice as regards the nature and number of channels subject, of-course, to availability thereof would be on the consumers. We do not find any illegality in the impugned tariff order so far as that aspect of the matter is concerned."

The appeals had been filed by United Cable Operators Welfare Association, LCO Udaya Shankar Roy Chowdhury, MSOs Digicable Networks, Indusind Media Communication Ltd, and Delhi Distribution Company, while broadcasters NDTV, Times Global and India TV, TV Today, Total TV, News Broadcaster‘s Association (NBA), and Indian Broadcasting Foundation (IBF) had filed applications to intervene.

Arguments on the petitions had commenced on 11 September and concluded on 21 September.

NEW DELHI: News broadcasters have agreed to pay reasonable carriage fees after the roll out of digitisation on 1 November, the News Broadcasters Association (NBA) said on Thursday. It said news broadcasters are willing to pay MSOs 50 paise to Re 1 per set top box subscriber, per channel per year as carriage fee.

The NBA statement follows a meeting chaired by Telecom Regulatory Authority of India (Trai) chairperson Rahul Khullar on 11 October with representatives of the MSO Alliance, the Indian Broadcasting Foundation, and the NBA to discuss the progress of digitisation and the issue of payment of carriage fees by broadcasters (inclusive of marketing fees, tiering fees, packaging fees or fees or charges under any other nomenclature) under the digitised regime.

Earlier, news broadcasters were concerned about unreasonable carriage fees continuing even after the switch to digitisation. While placement fee has been specifically prohibited by Trai, broadcasters were concerned about the lack of clarity with regard to carriage fees. Broadcasters were unsure whether they were required to pay carriage fee at all after digitisation, and if required, what would be the rates.

Khullar mentioned that his predecessor had indicated what reasonable carriage fees should be in a digitised regime and stated that boundaries had been laid down and he would expect carriage deals with news broadcasters to be within these bounds. He also exhorted broadcasters and MSOs to enter into agreements on carriage fees within the "next few days" so that all is set by the time digitisation rolls out in the four metros from the 1 November.

In view of this, the NBA said despite the earlier objection of news broadcasters to the payment of any carriage fees whatsoever, they are now agreeable to enter into agreements with MSOs for an initial period of one year, for the payment of carriage fees (inclusive of marketing fees, tiering fees, packaging fees or fees or charges under any other nomenclature) in the digitised areas, at a rate of 50 paise to one rupee per set top box subscriber, per channel per year, which is the reasonable rate and boundary set by the former TRAI chairperson and mentioned as such by the current chairperson at the meeting on 11 October 2012.

NBA said, "News broadcasters are grateful to the TRAI chairperson for taking proactive action in resolving the vexatious issue of carriage in a statesmanlike manner."

Also read:

News channels, MSOs wrangle over carriage fee

New Delhi: The Telecom Regulatory Authority of India (Trai) has extended till 24 September the date for comments by stakeholders on its draft amended regulations with regard to advertisements on television channels.

Trai has reiterated in the draft amendments that the advertisement duration ceiling of twelve minutes per hour announced by it on 14 May this year was as mandated by the central government.

TRAI said in a statement on Tuesday that the decision to extend the period for comments was taken at the request of stakeholders. The amended regulations were issued on 27 August and responses were sought by 11 September.

In the amended regulations, while TRAI suggested that the restriction on maximum duration of advertisements carried in the programmes of a TV channel shall be regulated on a clock hour basis, it brought live telecast of sports into the ambit of the regulations.

The draft regulation "Standards of Quality of Service (Duration of Advertisements in Television Channels) (Amendment) Regulations, 2012" said the provisions in the Cable TV Networks Rules 1994 with regard to the maximum duration of advertisements that can be carried per hour cannot be applied differently for different hours of the day, thereby discriminating the consumers? viewing experience depending upon the hour of the day.

Noting that the duration and the format of advertisements on TV channels were generally not in accordance with the provisions laid down in the advertising code under the Rules, TRAI had on 16 March this year issued a consultation paper, "Issues related to Advertisements in the TV channels", with the primary objective of striking a balance between giving a consumer a good TV viewing experience and protecting the commercial interests of broadcasters.

Based on the views/comments of the stakeholders, including consumers and consumer organisations, analysis of various aspects, facts and available studies, TRAI had notified the "Standards of Quality of Service (Duration Of Advertisements in Television Channels) Regulations" on 14 May 2012.

This had been challenged by several broadcasters in Tdsat and so the regulator decided to review the Standards of Quality of Service (Duration of Advertisements in Television Channels) Regulations, dated 14 May 2012.

NEW DELHI: The government hopes to earn over Rs 15 billion from the auction of 839 FM radio channels in 294 cities.

Information and Broadcasting Ministry sources told indiantelevison.com that it will hold ascending e-auction as recommended by the Group of Ministers and followed in the case of 3G and BWA by the Telecom Department.

The Telecom Regulatory Authority of India (TRAI) has recommended reduction in the minimum channel spacing from 800 KHz to 400 KHz within a licence service area in FM radio sector in India. The recommendation is under ?active consideration? of the Ministry, the sources said.

Under the Phase III Policy, the permission for the channels would be granted on the basis of non-refundable one-time entry fee, that is, the successful bid amount to be arrived at through an ascending e-auction process mutatis mutandis as recommended by the GoM. The cost would be determined through price discovery during the e-auction process.

The e-auction, expected to begin early next year, may take another two or three years in view of the large number of stations.

The sources said apart from the problems that may arise because of the first-time e-auction for which cabinet permission will be sought in advance to avoid delays, issues such as charging of migration fee from existing permission holders, and specific departures in the Requests for Proposals (RFP) had not been taken into account when the Cabinet had approved the Phase III proposals on 7 July last year.

The Information and Broadcasting Ministry has prepared a note which has been circulated to the concerned ministries/departments for their views, before it is put up before the Union Cabinet in the next few weeks.

Meanwhile, the Ministry is expected to call for tenders for e-auction later this month. The pre-qualification for the bidders is expected to be completed in another two months, following which the qualified companies will be allowed to participate in the e-auction for FM Phase III.

FM Phase-III Policy will extend FM radio services to about 227 new cities, in addition to the present 86 cities. Among the four metros, only Kolkata is not getting any new FM channel. While Mumbai will get two, Delhi and Chennai will get one each.

Under Phase-II currently in existence, 245 FM channels are operational covering 86 cities, each with a population of over 300,000 or more.