Broadcasters take uniform position on Commercial Subscribers

New Delhi : Member channels of the Indian Broadcasting Foundation (IBF), the apex body of broadcasters in the country, presented a unanimous viewpoint during the open house discussion on “Tariff Issues related to Commercial Subscribers” conducted by the Telecom Regulatory Authority of India (TRAI) here on Tuesday.

At the outset, the Foundation welcomed the open house initiative held under the stewardship of new TRAI Chairman Mr. Ram Sewak Sharma so as to take forward the consultation process the regulator had begun on 14 July 2015.

The issues discussed included the differentiation between domestic and commercial subscribers for provision of TV signals, the criteria for drawing distinction between ordinary subscribers and commercial subscribers, tariff framework both at wholesale and ​ retail levels, transparency and accountability in value chain to effectively minimize disputes and conflicts among stakeholders and engagement of broadcasters in the determination of retail tariffs for commercial subscribers.

Commenting on the deliberations, IBF President Uday Shankar said:

“It is inconceivable that any sector regulator would actually equate five star hotels and commercial establishments with domestic consumers as far as tariffs are concerned. But that’s exactly what TRAI has done with rates for pay TV channels. I am not sure what exactly the regulator is trying to achieve with the present dispensation, i.e. five star hotels availing TV content at subsidized rates especially when they charge a leg and arm for a room, a meal or even a bottle of water? It appears to be a case of misguided regulatory zeal. I hope better sense prevails and the regulator does what is in the interest of its primary stakeholders, i.e. broadcasters and distribution platforms and not five star and four star hotels.”

Participating in the open house, IBF Secretary General Mr. Girish Srivastava said:

“In keeping with the priorities of the current government of improving ease of doing business in India, such fixation is not warranted and forbearance should be the way forward. We believe that the regulator will factor that putting a ceiling on tariff will not help in promoting and protecting the interests of the ordinary consumers but will serve as an aberration to the growth story of the sector. Broadcasters have been unvarying and undeviating on this front and the regulator will hopefully keep this in mind before deciding on a regulation.”

Mr. Ashok Nambissan, General Counsel, Multiscreen Media Limited, said:

“Commercial and residential subscribers are two completely different categories. The residential subscriber consumes television content for his or her own use whereas the commercial subscriber provides television content for his customers to propagate the business of his establishment. Tariff regulation in today’s age is an anomaly: in any event it should not exist for commercial subscribers as a category whether at the wholesale or retail level and should be left to the market.’

Mr. A. Mohan, President (Legal & Regulatory), Zee Entertainment, said:

“All along it has been TRAI’s consistent stand that there is a distinction between ordinary and commercial subscribers and the same has been recognized by various judicial forums such as the Hon’ble TDSAT and the Hon’ble Supreme Court of India.  This stand of TRAI is also reflected in various tariff orders of TRAI, except the last one, that the tariff applicable to commercial subscribers is under forbearance. Since the commercial establishments will use the television services for commercial exploitation, whether directly or indirectly, the tariff applicable for ordinary subscriber, which is frozen since the year 2004 (which is a subsidized tariff) cannot be applied to commercial subscribers.”

Mr. Deepak Jacob, President, Legal & Regulatory, STAR India, said:

“Supreme Court has time and again in sectors such as oil & gas and power, clearly upheld the principles of differential tariffs for commercial and domestic subscribers. The rationale of differentiation is based on an understanding of motive and purpose i.e. commercial establishments have a clear profit motive and that the end usage is for a valuable benefit that accrues to and is built in to the charges paid by the consumer. It is also important that the regulator respects the mandate of Parliament and acts in accordance with laws laid down by the legislature by ensuring that the TRAI regulations/tariff orders are not in derogation of or repugnant to the provisions of Copyright Act, which is the principle legislation that governs content owners including broadcasters. The Copyright Act unequivocally provides for a separate dispensation in so far as commercial establishments are concerned and hence we hope that the regulator keeps the same in mind while formulating the new tariff regime.”

Mr. Naveen Jhunjhunwala, COO, BBC India, said:

“We strongly advocate a distinction between ordinary and commercial subscribers as far as tariff is concerned since the place of viewing the TV signal and type of usage of TV signals is inherently different in both these categories. Having a global presence, we have seen that the regulators have left determination of tariffs to forbearance thereby ensuring dynamic competition.  With Government focus on making India an easier place to do business, leaving things to market forces will ensure growth and be in line with international scenario.” 

Representatives of the Indian Broadcasting Federation (IBF), DTH Association, MSO Alliances, All India Digital Cable Federation (AIDCF), Federation of Hotel and Restaurant Association of India (FHRAI), and individual broadcasters were present at the open house.

About IBF: ​The Indian Broadcasting Foundation (IBF), the apex body for the broadcasting sector in India, was set up in September 1999 to promote and represent the interests of the Indian broadcasting sector.  IBF members manage more than 350 channels and about 90% of television viewership.  With its phenomenal year on year growth, the sector plays an important role in India’s social, educational and economic growth.   IBF endeavours to work closely with the policy makers and regulators to make the Indian broadcasting sector a world class industry.  

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