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