Reg­u­la­tor favours cable net­works over broad­cast­ers. It could undo the real gains from digi­ti­sa­tion.

India Today - - BUSI­NESS -

to shell out much higher tar­iffs. Man­sukhani does not want to pass the bur­den onto con­sumers.

The TRAI or­der ac­cepts this rea­son­ing and makes it clear that it ex­pects car­riage fee to fi­nance the upgra­da­tion of tech­nol­ogy and en­hance­ment of ca­pac­i­ties in MSOS. TRAI Sec­re­tary Ra­jeev Agrawal says, “We have put no ad­di­tional fi­nan­cial bur­den on broad­cast­ers. Car­riage fees are al­ready a re­al­ity.” How­ever, TRAI in­sists it has made the sys­tem more trans­par­ent. Un­der the April 30 or­der, each MSO is sup­posed to pub­lish a Ref­er­ence In­ter­con­nect Of­fer in which it will have to state its car­riage fee which will have to be ap­plied in a “uni­form, non- dis­crim­i­na­tory and trans­par­ent” man­ner. Lulla dis­agrees with TRAI’S logic. “If you are in a par­tic­u­lar busi­ness, you have to in­vest in it. Why should the bur­den of that in­vest­ment be passed on to oth­ers?” he asks.

Agrawal be­lieves that while broad­cast­ers have ev­ery right to their opin­ion, there re­ally should be no con­tro­versy. He ar­gues that once ca­pac­i­ties of the MSOS in­crease, their bar­gain­ing power to charge car­riage fee will go down. “Right now, they can charge car­riage fee be­cause they have lim­ited ca­pac­ity. We have made it com­pul­sory in the or­der for them to in­crease their ca­pac­ity ( from an av­er­age of 200 to 500 chan­nels). Once they do that, they will have to go to chan­nels and ask for their sig­nals, rather than chan­nels go­ing to them and pay­ing a fee. The mar­ket power of MSOS will be­come very lim­ited.”

Rao is not con­vinced. “The guide­lines are not fine- tuned enough. They may still refuse to carry the chan­nel if car­riage fee is not paid.” Says Lulla, “I wouldn’t have had a prob­lem if TRAI said that car­riage fee can only be charged af­ter 500 chan­nels are in the bou­quet. But they haven’t said that.” Rao ar­gues that TRAI needs to is­sue clar­i­fi­ca­tions so that un­cer­tainty can be avoided. There are no guide­lines in the April 30 or­der on what the car- riage fee should be. Rao says, “TRAI says it will in­ter­vene if the car­riage fee is un­rea­son­able, but who is to de­fine what is un­rea­son­able?” Lulla points out an­other prob­lem: “The process of ap­peal­ing to TRAI if an MSO is be­ing un­rea­son­able will take time. It may take a month or more. What hap­pens in the in­terim? Will the chan­nel be taken off air? That will cost the con­sumer— who can’t view the chan­nel— and the broad­caster, which will see the viewer base shrink. Out of sight is out of mind,” he says.

TRAI is not will­ing to budge. Says Agrawal, “All our or­ders are well thought- out.” In­ter­est­ingly, TRAI’S or­der comes just two weeks be­fore its chair­man, J. S. Sarma, com­pletes his three- year ten­ure in of­fice. Gov­ern­ment rules bar him from a sec­ond term. The next chair­man of TRAI who takes over af­ter May 15 will, in all like­li­hood, have to han­dle the reper­cus­sions from his pre­de­ces­sor’s or­der. So far, the logic of good, sim­ple eco­nomics con­tin­ues to defy this Gov­ern­ment and its reg­u­la­tors. Con­sumers and busi­nesses suf­fer the con­se­quences. The new tele­com reg­u­la­tor will have an op­por­tu­nity to make amends.




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