Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[op-ed snap] Trai’s attempt to review tariffs raises concerns

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : TRAI NTO on channel subscriptions

CONTEXT

Discovery Communications filed a writ petition in the Delhi High Court against TRAI’s new consultation paper on tariffs regarding broadcasting and cable services. 

Background

  • It seeks a stay on the consultation paper saying that it lacks objectivity, transparency and fairness of approach. 
  • Discovery argues the consultation paper is based on the assumption that television broadcasters are responsible for manipulating and distorting pricing of channels, thereby affecting consumer choice.
  • TRAI is attempting to review the six-month-old new tariff order (NTO), which allowed consumers to choose their channel on an à la carte basis with broadcasters having to declare the maximum price of each channel separately. 
  • Several research studies found that instead of lowering the monthly cable and DTH bills for the consumers as was intended, the new framework led to an increase in monthly charges.
  • Several broadcasters raised concerns about the new consultation paper. They say that the Trai’s move favours the distribution platform operators (DPOs) such as cable and DTH services. 
  • They feel that under the new tariff order the distribution platforms have gained the most as they get a fixed network capacity fee (NCF) of ₹130 for 100 standard definition (SD) channels and ₹20 for the next slab of 25 SD channels. 
  • The new consultation seeks to review broadcasters’ bouquets to check misuse of flexibility in pricing. 
  • By regulating the channel pricing, it is not allowing broadcasters to monetize their IPR
  • Trai assumes that à la carte is the preferred choice among consumers, although it offers no research by way of evidence.

Broadcasting and NTO

  • Broadcasting in India has always been a standoff between broadcasters and DPOs, and the DPOs have always been winning. 
  • Trai, as well as the ministry of information and broadcasting, have always seen their role as controlling broadcasters, never the DPOs.
  • DPOs have other advantages, too. If you have to be part of the first 100 free-to-air (FTA) channel bouquet of a DPO, you have to pay a carriage fee.
  • Also, they are pushing their own bouquets onto the consumers. 
  • At present no distributor platform has the capability to offer complete à la carte channel choice involving various permutations and combinations for each and every consumer. 
  • The new tariff order robs a consumer of his chance to discover new content as he was getting many channels for a very low monthly fee.
  • The new tariff order and the new consultation paper may kill the smaller channels. There is nothing wrong if weaker channels piggyback on stronger ones. 

CONCLUSION

Consumer should get actual choice and be able to pay only for what he watches. The revised tariff order seeks to make amends, but Trai has not acknowledged the mess it created.

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