The Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Second Amendment) Regulations, 2020

TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART III, SECTION 4 TELECOM REGULATORY AUTHORITY OF INDIA NOTIFICATION

THE TELECOMMUNICATION (BROADCASTING AND CABLE) SERVICES INTERCONNECTION (ADDRESSABLE SYSTEMS) (SECOND AMENDMENT) REGULATIONS, 2020 (1 of 2020)

New Delhi, 01/01/2020

F. No. 21-5/2019-B&CS.— In exercise of the powers conferred by section 36, read with sub-clauses (ii), (iii) and (iv) of clause (b) of sub-section (1) of section 11, of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997), read with notification of the Central Government, in the Ministry of Communication and Information Technology (Department of Telecommunications), No. 39, —

(a) issued, in exercise of the powers conferred upon the Central Government under clause (d) of sub-section (1) of section 11 and proviso to clause (k) of sub-section (1) of section 2 of the said Act, and

(b) published under notification No. S.O.44 (E) and 45 (E) dated the 9th January, 2004 in the Gazette of India, Extraordinary, Part II, Section 3,—

the Telecom Regulatory Authority of India hereby makes the following regulations to further amend the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 (1 of 2017), namely: -

1. (1) These regulations may be called the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Second Amendment) Regulations, 2020 (1 of 2020).

(2) (a) Except as otherwise provided in clause (b), these regulations shall come into force from 1st March, 2020.

(b) Regulation 3 and regulation 5 shall come into force from 15th January, 2020.

2. In regulation 4 of the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 (hereinafter referred to as the principal regulations),

(a) after the proviso and before the Explanation to sub-regulation (3), the following proviso shall be inserted, namely:- “Provided further that for a multi-system operator or Internet Protocol Television Operator or Headend-in-the-Sky (HITS) operator the target market shall in no case be larger than a State or a Union Territory.”

(b) for sub-regulation (8), the following sub-regulation shall be substituted, namely: - “(8) It shall be permissible to the distributor of television channels to discontinue carrying of a television channel in case the monthly subscription percentage for that channel is less than the discontinuation threshold calculated as per Schedule VIII, in each of the immediately preceding six consecutive months:

Provided that the language of the television channel shall be the language as published on its website and declared to the Authority by the broadcaster, and after 1st July, 2020, it shall be the language specified in the downlinking permission of the television channel issued by the government.

Explanation: In case the downlinking permission issued by the government specifies multiple languages as the language of the television channel, then the language proportion of the television channel shall be calculated by adding the proportionate percentage of all such languages together for a target market.”

3. In regulation 7 of the principal regulations, (a) for proviso to sub-regulation (3), the following proviso shall be substituted, namely:- “Provided that the rate of distribution fee declared by the broadcaster shall be same for pay channel and bouquet of pay channels and shall be uniform across all the distribution platforms.”

(b) in sub-regulation (4), the words “or bouquet of pay channels” shall be omitted.

(c) in first proviso to sub-regulation (4), the words “or bouquet of pay channels, as the case may be” shall be omitted.

4. In regulation 8 of the principal regulations, (a) in first proviso to sub-regulation (2), after the words “twenty paisa”, the following words shall be inserted, namely:- “and the total carriage fee payable for such television channel per month, by a broadcaster to a distributor of television channels, shall, in no case, exceed rupees four lakh”

(b) in second proviso to sub-regulation (2), after the words “forty paisa”, the following words shall be inserted, namely:- “and the total carriage fee payable for such television channel per month, by a broadcaster to a distributor of television channels, shall, in no case, exceed rupees eight lakh”

5. In the Explanation to sub-regulation (12) of regulation 10 of the principal regulations, the words “or the bouquet of pay channels” shall be omitted.

6. In regulation 18 of the principal regulations, (a) for sub-regulation (2) and provisos thereto, the following sub-regulation shall be substituted, namely: - “(2) It shall be mandatory for the distributor to place all the television channels available on its platform in the electronic programme guide, in such a manner that all the television channels of a particular language in a genre are displayed together consecutively and one television channel shall appear at one place only.”

(b) in sub-regulation (4), for the words “for a period of at least one year from the date of such assignment”, the words “without prior approval of the Authority” shall be substituted.

(c) for second proviso to sub-regulation (4), the following proviso shall be substituted, namely:- “Provided further that if a broadcaster changes the genre or language of a channel then the channel number assigned to that particular television channel shall be changed in order to place such channel with the channels of the new genre or language in the electronic program guide.”

7. In the principal regulations, after Schedule VII, the following schedule shall be inserted, namely: -

“Schedule VIII (Refer sub-regulation (8) of regulation 4)

Calculating the discontinuation threshold for a television channel

1. The ‘discontinuation threshold’ for a channel shall be the number arrived at by multiplying the average active subscriber base of the concerned distributor in its declared target market with the ‘discontinuation multiplier’ for the language of that channel.

2. The ‘discontinuation multiplier’ for a language shall be five percent of the total percentage of the population speaking that language in the declared target market of the concerned distributor as per the latest Census data. (a) In case the declared target market of the concerned distributor is ‘All India’, the ‘discontinuation multiplier’ shall be calculated as per the following table (until more recent Census data is available):

Source: Census 2011 data: C-17 Population by bilingualism and trilingualism

(b) In case a distributor declares multiple states as target market under the provisions of the regulations, the discontinuation multiplier shall be calculated in proportion to the speaking strength of the language of that television channel in all the states constituting the target market.

(c) In case a distributor declares a State or a Union Territory as the target market under the provisions of the regulations, the discontinuation multiplier shall be calculated in proportion to the speaking strength of the language of the television channel in that state or Union Territory. (Refer Census Data of India, Statement 3: Distribution of 10,000 persons by language – India, States and Union Territories-2011; http://censusindia.gov.in/2011Census/Language-2011/Statement-3.pdf or latest census data)

3. The following illustrations explain the criteria for determining the continuance or otherwise of a television channel.

ILLUSTRATION-I

Target Market: All India: - Let us assume that the distributor has declared all India as its target market and its monthly average active subscriber base is 1,00,00,000 in each of the immediately preceding six consecutive months. Now, for a distributor, to check whether it has flexibility to continue or discontinue a television channel based on the ‘discontinuation threshold’ one has to look at the language(s) declared by the broadcaster and the number of subscribers in constituent of target market areas [state(s) and/or Union Territory(ies)] for a given television channel. Assuming in this case a broadcaster of a television channel that has declared Bengali as its language. One can note that as per the Census Data table (above), the speakers' strength of the Bengali language (in %) is 8.88.

The distributor will calculate 8.88% of its subscriber base (i.e. 8.88% of 1,00,00,000 = 8,88,000). If the monthly subscription of the above-mentioned television channel of Bengali language is less than 5% of 8,88,000 i.e. 44,400 in each of the immediately preceding six months in the target market specified by the distributor in the interconnection agreement (i.e. all India in this case), then it may discontinue carrying the channel on its platform.

Alternatively, distributor may calculate the threshold by multiplying ‘Discontinuation Multiplier (in %)’ with the monthly average active subscriber base of a distributor i.e., 0.444% of 1,00,00,000 = 44,400. If the monthly subscription of the above-mentioned television channel of Bengali language is less than 44,400 in each of the immediately preceding six months in the target market specified by the distributor in the interconnection agreement (i.e. all India in this case), then it may discontinue carrying the channel on its platform.

ILLUSTRATION-II

Target Market: Combination of State(s) & Union Territory(ies):- Let us assume that the distributor has declared Gujarat, Daman & Diu and Dadra & Nagar Haveli as its target market and its monthly average active subscriber base is 2,00,000 in the target market in each of the immediately preceding six consecutive months. The subscriber base is sub-divided as 1,50,000 in Gujarat, 40,000 in Daman & Diu and 10,000 in Dadra & Nagar Haveli. Now, for a distributor, to check whether it has flexibility to continue or discontinue a television channel based on the ‘discontinuation threshold’, one has to look at the language(s) declared by the broadcaster for a given television channel in respective target market [state(s) and/or Union Territories]. Assuming in this case a broadcaster of a television channel that has declared Gujarati as its language.

The distributor will calculate the speakers' strength of the Gujarati language in Gujarat, Daman & Diu and Dadra & Nagar Haveli (in %) using census 2011 data (Statement - 3 - Distribution of 10,000 persons by language - India, States and Union Territories – 2011) which is 85.97%, 50.83% and 21.48% respectively.

The distributor will calculate the threshold for his above-mentioned target market as follows:

= 5% of (85.97% of its subscriber base in Gujarat) + 5% of (50.83% of its subscriber base in Daman & Diu) + 5% of (21.48% of its subscriber base in Dadra & Nagar Haveli)

= 5% X (85.97% X 1,50,000) + 5% X (50.83% X 40,000) + 5% X (21.48% X 10,000)

= 6448 + 1017 + 107

= 7572

If the monthly subscription of television channel of Gujarati Language is less than 7,572 in each of the immediately preceding six months in the target market specified by the distributor in the interconnection agreement, i.e. Gujarat, Daman & Diu and Dadra & Nagar Haveli in this case, then it may discontinue carrying the given channel on its platform.

ILLUSTRATION-III

Target Market: All India- Multiple: Languages: - Let us assume that the distributor has declared ‘all India’ as its target market and the monthly average active subscriber base of the distributor is 1,00,00,000 in the target market in each of the immediately preceding six consecutive months. Now, for a distributor, to check whether it has flexibility to continue or discontinue a television channel based on the ‘discontinuation threshold’ one has to look at the language(s) declared by the broadcaster for a given television channel. Assuming in this case a broadcaster of a television channel that has declared English and Hindi as its languages.

The distributor will calculate the speakers' strength of the Hindi & English language (in %) using census 2011 data (Statement - 3 - Distribution of 10,000 persons by language - India, States and Union Territories – 2011) which is 57.11% and 10.62% respectively.

The distributor will calculate the threshold for his above-mentioned target market as follows:

= 5% of (57.11% of its subscriber base) + 5% of (10.62% of its subscriber base)

= 5% X [ (57.11+10.62) % of 1,00,00,000]

= 3,38,650

If the monthly subscription of television channel, of English and Hindi language, is less than 3,38,650 in each of the immediately preceding six months in the target market specified by the distributor in the interconnection agreement, i.e. all India in this case, then it may discontinue carrying the given channel on its platform.”

(Sunil Kumar Gupta) Secretary, TRAI

Note 1----- The principal regulations were published in the Gazette of India, extraordinary, Part III, Section 4 vide notification No. 21-4/2016-B&CS dated the 3rd March, 2017.

Note 2: The principal regulations were amended vide notification No. 21-6/2019-B&CS dated 30th October, 2019 (7 of 2019).

Note 3----- The Explanatory Memorandum explains the objects and reasons of the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Second Amendment) Regulations, 2020.

Explanatory Memorandum

1. Keeping in view the implementation of Digital Addressable Systems (DAS) and to enable the sector to realize its benefits, the Telecom Regulatory Authority of India (TRAI), after due consultation process, published a ‘new regulatory framework’ for digital addressable systems on 3rd March 2017. This framework comprises of the Telecommunication (Broadcasting and Cable ) Services Interconnection (Addressable Systems) Regulations, 2017, the Telecommunication (Broadcasting and Cable) Services Standards of Quality of Service and Consumer Protection (Addressable Systems) Regulations, 2017 and the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017 for providing broadcasting services relating to television through the digital addressable systems. The new regulatory framework was notified in March 2017. However, pursuant to legal challenges to the said regulations, the regulations were notified on 3rd July 2018 and came into effect from 29th December 2018 after satisfying legal pronouncements.

2. During the past few months, the Authority received several representations from many regional/ FTA broadcasters on issues related to exorbitant carriage fee due to large area declared as the target market and undue threat of removal as the subscription of regional channels continue to remain lower than the minimum prescribed subscription threshold.

3. Accordingly, the Authority issued a consultation paper on ‘Issues related to Interconnection Regulation, 2017’ on 25th September 2019. The main objective of this consultation process was to consult all the stakeholders on issues related to charging of exorbitant carriage fee by the distributors of television channels (DPOs) and removal of channels with subscription lower than the minimum prescribed threshold and to review the provisions of the existing Interconnection Regulation 2017, if so required.

4. The comments of the stakeholders were invited by 23rd October 2019 and counter comments by 6th November 2019. On the request of stakeholders, the deadline to submit the comments was extended till 4th November 2019 and counter comments by 13th November 2019. Thirty comments and one counter comment were received from stakeholders. Subsequently, an Open House Discussion (OHD) was held on 28th November, 2019 in Delhi, which was attended by large number of stakeholders. A few additional comments were also received after OHD.

5. After taking into consideration the comments received from the stakeholders and in-house analysis, the Authority has finalized the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Second Amendment) Regulations, 2020 [hereinafter referred to as the ‘Second Amendment Regulations’]. The subsequent paragraphs explain the objects and reasons of the Second Amendment Regulations.

Carriage fee and Target Market

6. Quite a few broadcasters of regional or niche channels have submitted representations regarding the declaration of bigger target market by DPOs. The regulations provide freedom to the DPOs to declare their target market for the purpose of ascertaining the carriage fee. Some of the distribution platform operators (particularly DTH operators) have declared PAN India as their target market. In case these regional broadcasters desire that their channel(s) is carried on such distribution platforms, they are required to pay carriage fee on national subscription figures of such distributors. Whereas, such regional channels have a clear strategy to create content suited to certain regional markets or specific audience genre. Due to this mismatch of the channel’s focus (on a regional or niche market) and carriage fee payment on the basis of the national market, such channels are constrained to pay a much higher carriage fee and find it difficult to survive.

7. This has created an economic barrier for regional channels thereby limiting their presence on smaller distribution platforms. The proposition to pay carriage fee for national market makes it unviable for such channels.

8. According to regulation 4 of the Interconnection Regulation, 2017

“(3) Every distributor of television channels shall declare coverage area of each distribution network as a target market:

Provided that it shall be permissible for a distributor to declare, in non-discriminatory manner, any area within the coverage area of distribution network as a target market.

Explanation: For the purpose of this regulation, each Head-end or Earth Station, as the case may be, and its associated network used for distribution of signals of television channels shall constitute one distribution network.”

“(4) Every distributor of television channels shall, within thirty days from the commencement of these regulations or within thirty days from the commencement of its operations, as the case may be, on its website, publish—

(a) target markets as declared under sub-regulation (3) of this regulation;…..”

9. As per regulation 8 of the Interconnection Regulation, 2017

“(2) The reference interconnection offer, referred to in sub-regulation (1), shall contain the technical and commercial terms and conditions relating to, including but not limited to, target market, rate of carriage fee per month, average active subscriber base of standard definition set top boxes and high definition set top boxes at the time of publication of the reference interconnection offer, discounts, if any, offered on the rate of carriage fee, manner of calculation of carriage fee payable to the distributor and other necessary conditions:

Provided that the rate of carriage fee per standard definition channel per subscriber per month to be declared by a distributor of television channels shall not exceed twenty paisa:

Provided further that the rate of carriage fee per high definition channel per subscriber per month to be declared by a distributor of television channels shall not exceed forty paisa:

Provided also that a distributor of television channels shall calculate the carriage fee amount for television channels as per the provisions specified in the Schedule I, which shall change with the changes in monthly subscription percentage of such television channels…..”

10. As per Schedule I of Interconnection Regulation 2017, the carriage fee amount, for each month or part thereof, during the term of the interconnection agreement shall be calculated as given below:

a. If monthly subscription for a channel in the target market is less than five percent of the average active subscriber base of the distributor in that month in the target market, then the carriage fee amount shall be equal to the rate of carriage fee per channel per subscriber per month, as agreed under the interconnection agreement, multiplied by the average active subscriber base of the distributor in that month in the target market

b. If monthly subscription for a channel in the target market is greater than or equal to five percent but less than ten percent of the average active subscriber base of the distributor in that month in the target market, then the carriage fee amount shall be equal to the rate of carriage fee per channel per subscriber per month, as agreed under the interconnection agreement, multiplied by 0.75 times of the average active subscriber base of the distributor in that month in the target market.

c. If monthly subscription for a channel in the target market is greater than or equal to ten percent but less than fifteen percent of the average active subscriber base of the distributor in that month in the target market, then the carriage fee amount shall be equal to the rate of carriage fee per channel per subscriber per month, as agreed under the interconnection agreement, multiplied by 0.5 times of the average active subscriber base of the distributor in that month in the target market.

d. If monthly subscription for a channel in the target market is greater than or equal to fifteen percent but less than twenty percent of the average active subscriber base of the distributor in that month in the target market, then the carriage fee amount shall be equal to the rate of carriage fee per channel per subscriber per month, as agreed under the interconnection agreement, multiplied by 0.25 times of the average active subscriber base of the distributor in that month in the target market.

e. If the monthly subscription for a channel in the target market is greater than or equal to twenty percent of the average active subscriber base of the distributor in that month in the target market, then the carriage fee amount shall be equal to 'Nil'.

11. In the existing regime, the broadcasters are required to pay monthly carriage fee depending upon the average active subscriber base of the DPO in the target market declared by the DPO.

12. The regulations provides flexibility to the DPOs to declare their target market for the purpose of ascertaining the carriage fee. The only guiding factor for target market is on the basis of the Head-end of a DPO. The target market should be confined to an area covered by a single head-end or a sub-set of such area covered by a single head-end. This in-turn means that based on coverage of satellite foot-print of their signals, DTH and HITS operators can declare whole of India as their target market.

13. Many regional broadcasters have represented to TRAI that several distributors have declared either ‘the whole country’ or ‘combination of some states together’ as their target market. As a result they are required to pay exorbitant carriage fee since the active subscriber base of the DPO in entire India is taken into account for the purpose of determining carriage fee. In such cases, the Reference Interconnect Offer based carriage fee agreements become unviable for regional channels. Accordingly the regional channels are constrained to enter into negotiations for signing alternate agreements, terming these as placement or marketing arrangements. Such alternative agreements render the carriage fee regulations expendable.

14. Hon’ble Telecom Disputes Settlement and Appellate Tribunal (TDSAT) also recommended the Authority to examine the issue. TDSAT vide its order dated 29.07.2019 in broadcasting petition no. 165/2019 adjudicated, “the main challenge appears to be to the wisdom of the Regulator in giving liberty to DTH operators to declare their target areas”.

15. The Authority held several meetings with each group of stakeholders in the industry including News Broadcasters, Broadcasters, DTH operators, MSOs and regional broadcasters to discuss the issues arising out of flexibility provided to distributors on declaring the target market. In these meeting the viewpoints and suggestions of each group/ type of the stakeholders were heard. On the basis of the representation, the stakeholders’ meetings and the analysis, it became apparent that the regulatory provisions related to the target market area and the carriage fee entail a comprehensive review.

16. Accordingly, consultation paper on ‘Issues related to Interconnection Regulation, 2017’ was issued on 25th September 2019. Vide this paper, the Authority sought specific comments on the aspect regarding the flexibility available to the DPO in defining the target market. Stakeholders were enjoined to provide detailed comments on the distortions (if any) arising out of the available freedom with the DPO. The authority also solicited the requisite facts from stakeholders duly supported with the documents/ data. The scheme, of the questions in the consultation paper, makes it incumbent upon stakeholders to suggest possible solutions.

Discontinuation of a channel

38. Many regional broadcasters of regional/ niche channels have represented to TRAI that several distributors have declared either ‘the whole country’ or ‘combination of some states together’ as their target market. As a result, number of subscribers in notified target market is very high and hence the percentage of subscribers viewing their channel in the target market is likely to be far less than five (5) percent. As such, subscription of their channels on national level or in combination of states continues to be lower than the minimum threshold of 5% despite very high subscription in their respective regional market. This gives an opportunity to DPOs to misuse the existing provisions in the regulation to drop their channels from DPOs platform. These broadcasters have represented that they are left to the mercy of the distributors as the distributor is not mandated to carry such channels which have a subscription of less than five percent (5%) of monthly average active subscriber base, in each of the immediately preceding six consecutive months. Pertaining to this issue broadcasters have represented to the authority to review this unbridled right granted to the DPOs.

39. According to regulation 4 of the Interconnection Regulation, 2017

“(8) It shall be permissible to the distributor of television channels to discontinue carrying of a television channel in case the monthly subscription percentage for that channel is less than five percent of the monthly average active subscriber base of that distributor in the target market specified in the interconnection agreement, in each of the immediately preceding six consecutive months:”

“(9) A distributor of television channels shall not be under obligation to carry a channel which has been discontinued as per sub-regulation (8), for a period of one year from the date of such discontinuation.”

40. The Authority had noted that such provision existed in the Interconnections, 2012 which was applicable for DAS. The Authority was of the view that such provision would ensure that non-popular channels do not occupy the space on a distribution network. Therefore, the provision was retained in the Interconnection Regulation 2017 with slight modification.

41. Accordingly, in the consultation paper on ‘Issues related to Interconnection Regulation, 2017’ dated 25 September 2019, the Authority had sought comments of the stakeholders on the issue as to whether in their opinion the right granted to the DPO to decline to carry a channel having a subscriber base less than 5% in the immediately preceding six months is likely to be misused? If yes, what can be done to prevent such misuse?

42. During the consultation process some stakeholders were of the opinion that the provision that allows removal of a TV channel, if it does not attain the minimum subscription, is being misused by the DPOs. As a result Regional channels are facing undue uncertainty. Some of the stakeholders suggested that the viewing subscribers should have the flexibility and opportunity to watch the channel of their choice. A new channel launched takes time to pick up and be viewed/used by the subscribers/consumers at large therefore, a channel should be carried irrespective of the percentage of subscribers viewing it. Some stakeholders opined that no broadcaster’s channel should be dropped from the DPO’s platform on the basis of low penetration. In the consumer interest, as long as it makes business and commercial sense for a particular broadcaster to broadcast a particular channel, they should be allowed to do so without any intervention on the part of DPOs even if the viewership goes below 5%. Another group of stakeholders suggested that the time period of six consecutive months as prescribed is sufficient to ascertain whether or not a channel is being well-received and/ or demanded by the subscribers. Moreover, for channels that fail to garner less than 5% viewers on a platform, then carrying it for a longer time period results in blocking the entry of new channels. The criteria of a minimum subscription threshold is clearly on the basis of the consumer choice, which is the cornerstone of the current regulatory framework.

43. The Authority undertook the analysis on the basis of current channel-wise subscription of leading platforms that have declared large areas (including all India in some cases) as the target market. It is observed that a very large number of channels, amounting to more than 15 % channels (more than 90 channels), do not meet the minimum subscription threshold. This reflects that the concerns of broadcasters is correct as continuance of a large number of channels is dependent on the distribution platform operators. As per the basic principles, the regulation should strive to balance the interests and powers of various stakeholders in a regulated environment. Any provision that put one set of stakeholders in a commanding position may result in undue distortion of the market.

Placement of channels in Electronic Program Guide (EPG)

51. The sequencing of channels in the electronic program guide (EPG) has been a topic of discussion. The current framework provides to put all television channels of one genre together with further classification within the genre on the basis of respective language of television channels. This classification methodology has been termed as genre language based listing. Furthermore, the distributor of the televisions channels may place a channel under sub-genre within the genre declared for the channel by the broadcaster. In the first multi-stakeholders meeting held after the implementation of the new regime during February 2019, DPOs raised certain issues in adhering to the prescribed structure of EPG. The Authority constituted a stakeholders’ committee in April 2019 to discuss issue and suggest possible alternatives. Pursuant to the recommendations of the said stakeholders’ committee, further interactions were held with different DPOs.

52. According to regulation 18 of the Interconnection Regulation, 2017

“18. Listing of channels in electronic programme guide.— (1) Every broadcaster shall declare the genre of its channels and such genre shall be either ‘Devotional’ or ‘General Entertainment’ or ‘Infotainment’ or ‘Kids’ or‘Movies’ or ‘Music’ or ‘News and Current Affairs’ or ‘Sports’ or ‘Miscellaneous’.

(2) It shall be mandatory for the distributor to place channels in the electronic programme guide, in such a way that the television channels of same genre, as declared by the broadcasters, are placed together consecutively and one channel shall appear at one place only:

Provided that all television channels of same language within the same genre shall appear together consecutively in the electronic programme guide:

Provided further that it shall be permissible to the distributor to place a channel under sub-genre within the genre declared for the channel by the broadcaster.

(3) Every distributor of television channels shall assign a unique channel number for each television channel available on the distribution network.

(4) The channel number once assigned to a particular television channel shall not be altered by the distributor for a period of at least one year from the date of such assignment:

Provided that this sub-regulation shall not apply in case the channel becomes unavailable on the distribution network:

Provided further that if a broadcaster changes the genre of a channel then the channel number assigned to that particular television channel shall be changed to place such channel together with the channels of new genre in the electronic program guide.”

53. Vide the consultation paper on Tariff Related Issues, stakeholders were asked to suggest suitable methodology for listing of the television channels in the EPG. In response stakeholders have been divided in their opinion. Some stakeholders suggested that DPOs should get the flexibility to list the television channels either language-genre wise or genre-language wise. However, all the channels of a particular language and genre should be placed together. They also suggested that DPOs should not include platforms services, VAS, non-relevant services such as local channels, shopping channels within the regular genre listing of satellite TV channels.

54. Some stakeholders suggested that channels should be listed in the EPG first language wise and then within each language, genre wise, categorized as language-genre type listing. They mentioned that in such arrangement, consumers who understands specific language are not required to move all across the languages to watch his own language channel if he intends to watch GEC, News, Movies, etc. According to them this requires amendment to the present regulations.

55. Few stakeholders are of the view that channels should be listed genre wise like News, Entertainment, Movies, Infotainment, Kids etc. followed by classification in sub-genres like Hindi GEC, Regional GEC and Hindi news, English News etc.

56. Some stakeholders mentioned that structure of the EPG need not to be regulated by TRAI, except to ensure that any channel cannot be placed twice or more in the same EPG. They further suggested that the structure of the EPG and genres should be decided solely by the broadcasters and the DPO with an aim to provide the best customer experience.

57. Some stakeholders are of the view that the manner in which channels are presently listed on the EPG seems to be adequate and any change in EPG at this point may cause inconvenience to subscribers in locating channels in EPG as they have accepted / familiarized themselves with the present placement of channels on the EPG. Some of these stakeholders mentioned that the channel listing in EPG by the DPOs is being done on the basis of their understanding of the consumer requirements and area of operation. Given that all the major DPOs have been in operation since more than ten to fifteen years, their customer base has become acquainted with the manner of listing of channels on the EPG. Compliance to the regulations entails widespread changes that may cause inconvenience to consumers. Further, the regulations prescribe that channels of the same genre have to be placed together. This requirement is being followed by the DTH operators. According to them there are adequate measures already prescribed in the Interconnection Regulations, 2017 and hence there is no requirement for regulatory intervention at this stage as the customers do not have any concerns regarding the same.

58. The Authority has noted that DPOs have adopted different approaches for placement of channels in EPG. Some DPOs have arranged channels first language wise and then genre wise under each language. Whereas some DPOs have arranged channels first genre wise and then language wise under each genre. Furthermore, some DPOs have adopted a mixed approach where some combination of language-genre wise and genre-language wise has been used. To ensure ease of viewing channel listing for consumers while maintaining a balance between interests of broadcasters and DPOs a standard arrangement for listing the channels on the EPG is essential.

Placement and other agreements between broadcasters and Distributors

66. In the Interconnection Regulation 2017, the provision related to listing of the channels in the Electronic Program Guide (EPG) were made so that visibility of a channel in given genre can be ensured. This was done primarily to protect the interest of the broadcaster. However, as per details herein-above there were certain issues with the allocation of LCN to various channels while following the regulatory provisions. Therefore, quite-a-few stakeholders did not fully implement the EPG regulations.

67. Quite a few complaints were received from various broadcasters whereby it was alleged that some DPOs are pushing for signing of marketing/placement/promotion agreement. Such instances were also the result of very high carriage fee arising out of much larger target market, so declared by the DPOs.

68. Accordingly, in the consultation paper on ‘Interconnection Issues’ the authority had sought opinion of the stakeholders in regard to placement/ marketing agreement. Stakeholders were asked whether there should be a well-defined framework for Interconnection Agreements for placement, should placement fee be regulated and if yes, what should be the parameters for regulating such fee. In addition, the authority also asked the stakeholders on ways and means to restrain the possible misuse of flexibility presently available with DPOs as regards the placement and marketing agreements.

69. In response, a group of stakeholders submitted that there should be a framework for Interconnection Agreements for placement and the placement fee should be regulated as news channels are being forced to sign placement / marketing agreements. Further that in some instances exorbitant fees are being charged under these heads by the DPOs. The arbitrary demands of the DPOs by whatever label leads to the blackmailing of the news channel. News channels are expected to pay the fees as demanded or face removal from the platforms. One of the stakeholders commented that it is necessary to cover placement/marketing/any other arrangements under the Regulations to ensure a level-playing field amongst stakeholders and to ensure transparent and non-discriminatory arrangements between broadcasters and DPOs. The objective should be that, all business arrangements between a DPO and a broadcaster should be transparent and non-discriminatory. To ensure a fair and transparent distribution margin, the Authority should ensure that the total pay-out from broadcaster to DPO (under any head including distribution fee, incentives, placement, marketing or any other arrangements) should not exceed 35% of the MRP. Otherwise, the MRP to consumers will be illusory. However, one stakeholder has opined that there is no need for the Authority to define a framework for agreements for placement. Another group of stakeholders referred to the order of Hon’ble TDSAT dated May 29, 2019 regarding the issues related to the landing page. The said order held that the subject matter of placement of a channel of broadcaster, by the distributor on the landing page of a subscriber is not “interconnection” and hence outside the power and jurisdiction of the Authority. Since the appeal on said order is pending the matter remains sub-judice, the Authority should not proceed with the consultation process on these issues/agreements or define a framework for agreements for placement. One broadcaster suggested that in the new regulatory framework, the carriage and placement have been clearly distinguished. The carriage fee has been regulated and the must carry provisions are made to ensure access to the distribution networks in a transparent and non-discriminatory manner. Detailed provisions relating to placement are already provided, however, if a broadcaster still wishes to place its channel at a particular position or on a specific number, subject to the provisions of new regulations, the broadcaster may offer discount within the prescribed framework or pay the mutually agreed fee, after signing the interconnection agreement, to a distributor for placing the channel. The regulations already disallow placement as a precondition to provide signals. In view of the above, the stakeholder is of the opinion that the present provisions relating to placements are adequate and the Authority should not consider any further regulation in this aspect.

Penetration incentive on bouquets

73. One of the main objectives of the new regulatory framework is to ensure that consumer becomes the real decision maker and has complete freedom to choose what he/she wishes to watch and pay only for that. After a thorough analysis of the market it is believed that offer of penetration-based incentives on the bouquets, by the broadcasters to the DPOs, may lead to pushing of bouquets by DPOs to consumers, in order to avail penetration-based incentives. This defeats one of the main objectives of the new regulatory framework of promoting the consumer choice.

74. As per sub-regulation 12 of Regulation 10 of Interconnection Regulation 2017

“(12) A broadcaster shall not incorporate any provision, directly or indirectly in its interconnection agreement with a distributor of television channels which requires such distributor of television channels to give a guarantee for a minimum subscriber base or a minimum subscription percentage for the channels offered by the broadcaster and any agreement to contrary shall be void.

Explanation: For removal of doubt, it is clarified that any discount, offered as an incentive by a broadcaster on the maximum retail price of the pay channel or the bouquet of pay channels, based on actual number of subscribers or actual subscription percentage, recorded in a month shall not amount to guarantee for a minimum subscriber base or a minimum subscription percentage for its channel.”

75. The Consultation Paper on Tariff Related issues for Broadcasting and Cable services published on 16 August 2019 deals with issues related to pricing of Bouquets vis-à-vis a-la-carte channels, bundling of channels in a bouquet and the discounting structure. Pursuant to comprehensive analysis of stakeholders’ submission under that paper, it is explicit that the discount offered to the distributors (as part of distribution incentive in addition to the distribution fee) on the bouquets by the pay channel broadcasters is intertwined with the pricing structure and manner of offering of the bouquets. In-fact offering a discount of fifteen percent (15%) as an incentive on subscription of certain minimum subscription of bouquets of pay channels to DPOs may align their commercial interests with the broadcasters. Prima-facie it is violative of the consumers’ right to choose.

76. It is imperative to restrain practices that compromise the effective choice of customers. While reviewing the provisions related to the offering of bouquets and it is necessary to review the explanation to Sub-Regulation 12 of Regulation 10. Many of the concerns were shared with the stakeholders by the Authority in the consultation paper on Tariff Related Issues. In response the Broadcasters and their Associations have submitted well-articulated views, mostly countering concerns expressed by Consumers and their Groups. The Authority has carefully considered their submissions and with positive conviction. However, consumers’ right to exercise choice is the cornerstone of the regulatory framework and cannot be compromised. The Authority is enjoined by the Statute to protect the interests of service providers and consumers while ensuring orderly growth.

77. The regulatory framework endeavors to ensure that consumer becomes the real decision maker and has complete freedom to choose what he/she wishes to watch and pay only for that. The discount offerings on bouquets are in addition to already reduced prices vis-à-vis the sum of a-la-carte channels. Further such discounts remain with the DPOs and do not pass-on to the consumers or shared with the local cable operators in most of the cases. The issue has been dealt in details in the matters regarding the ‘Tariff related issues’ and the authority has duly considered to provide higher discounting cap vis-à-vis the sum of a-la-carte price of the constituent channels while forming the bouquets so that such benefit can be passed on to subscribers. The primary objective for doing so is that the advantages of such discount (on bouquets) passes on to the consumers directly. Therefore, any discount to the DPOs defeats one of the prime objectives of the regulatory framework. It also distorts the market offerings further, thereby rendering a-la-carte prices inconsequential in most cases. To discourage this anti-consumer practice and to ensure that DPO do not have monetary incentives to push bouquets, the Authority is of the view that the broadcasters may be permitted to offer penetration-based incentives only for the a-la-carte channels. The authority expects that the revised provision will engender to promote the interest of the consumers and extend real choice(s). Appropriate modifications have been carried out in the relevant provision(s).

---

¹ As per analysis provided by Broadcast Audience Research Council on the basis of BARC India survey of TV Homes 2018 and viewership data.