Thursday, 1 October 2015

TRAI releases draft amendment to tariff order for ‘Pay Channel’ pricing

On 30th September 2015 The Telecom Regulatory Authority of India (TRAI) has released the draft Telecommunication (Broadcasting and Cable) services (Fourth) (Addressable systems) Tariff (Amendment) order, 2015. amending the ‘Twin Conditions’ prescribed at retail level pricing of TV channels, linking the a-la-carte rates with bouquet rates.
Some platform operators had raised concerns about the implementation of 'Twin Conditions' prescribed in the Tariff (second Amendment) Order dated 20th September 2O13 and had filed an appeal before the TDSAT. The tribunal had disposed off the appeal vide its order dated 13th July, 2015 stating that the Authority would consider the concerns of the appellants and take a final decision on the matter within four months from the date of order.
The draft has added definition of ‘RIO’ and ‘RIO Rates’ as given below:
RIO means a Reference Interconnect Offer published by a service provider specifying terms and conditions on which other service providers may seek interconnection from the service provider making the offer.
RIO Rate means the rate specified by the service provider in its Reference Interconnect Offer.”
Tariff order has also simplified the ‘Twin Conditions’ of relating a-la-carte price of TV channels to bouquet price at the retail level for all distribution platforms including Cable TV, DTH, HITS and IPTV. The new conditions are:
a. The a‐la‐carte rate of a pay channel forming part of a bouquet shall not exceed two times its RIO rate offered by the broadcaster for addressable systems; and
b. Sum of a‐la‐carte rates of all the channels in the bouquet shall not exceed three times the bouquet rate.
TRAI has further explained that the a-la-carte rates of all the channels offered by the service provider shall be same for all the bouquet of channels formed by the service provider and the rates of each such bouquet must satisfy the conditions specified under clause (a) and clause (b) given above.
The changes made in the tariff order amendment are:
a. Earlier an a-la-carte rate of a pay channel was not to exceed two times of its wholesale price where as now the reference price is as given in the ‘RIO Rate’.
b. Earlier the a-la-carte rate of a pay channel was not to exceed three times the ascribed value of the pay channel in the bouquet. Now it must not exceeds three times the bouquet rate.
The ascribed value of a channels depended on proportionate value of the pay channels in a particular bouquet.
TRAI has requested the stakeholders to send their comments by 14 October 2015 and counter comments by 21 October 2015, preferably in electronic form on the email- or
The tariff order will be effective from the date it is published in the Official Gazette.


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