Cable operators gear up for legal wrangle over tariff

Written by Ashish Sinha | New Delhi | Updated: Jun 29 2010, 05:12am hrs
Fearing stringent tariff regime for television content, broadcasters, cable operators and DTH service providers are likely to take the legal route to fight back. The move comes after the lengthy tariff-fixing exercise undertaken by Telecom Regulatory Authority of India (Trai) ended without much headway last week.

Various stakeholders including broadcasters are against Trai's proposal of capping monthly cable television charges at Rs 250 per month (Rs 100 for free-to-air channels and Rs 150 for pay channels). Several broadcasters said capping cable charges at Rs 250 means fixing the cable rates and then deciding the split (between free channels and pay channels). This is not the best approach and the matter required in-depth consultations with all. The matter will go to the court if Trai goes ahead with it, said a top executive of a leading media company.

Also, Trai's proposal of 2013 deadline for turning the current analogue cable distribution platform into digital has not been agreed by several cable operators. Cut-off date for going digital simply means bringing the controversial conditional access system (CAS) regime. Clearly the government is not for CAS so far and Trai does not have the power to enforce CAS then there is no meaning of 2013 as a cut-off date, said a top cable company executive.

On DTH tariff, the existing content pricing formula (50% of the current non-CAS rates) will continue. Trais move to reduce it at the behest of certain DTH operators was not agreed by all, sources said who attended the meet last week.

With sharp differences persisting between broadcasters, cable operators and DTH service providers over pricing of television content, sources said several stakeholders are gearing up to go to court if Trai imposes a tariff-structure that has not been agreed by all.

"We feel the entire exercise by Trai has been a waste of time. The Trai survey on cable pricing put Rs 165 as average monthly cable pricing across India but it proposes Rs 250 as an option without any scientific backing."

"Again it wants DTH operators to offer a-la-carte channels to subscribers when nearly 70% of agreements between broadcasters and DTH operators have been signed on mutual consent. The entire exercise has been futile in my opinion," a senior executive in a leading media firm told FE.

In order to prepare the cable pricing survey Trai is said to have shelled out over Rs 50 lakh to a private consultant. According to this survey, paying more for cable was not a guarantee for improved services. Also, consumers are not prepared to pay more for cable instead they would prefer DTH, the survey findings noted.

However, industry insiders fear that Trai in its report to the Supreme Court may just suggest something drastic on the new tariff structure. "We have our doubts. We are looking at legal options. In my view, someone may just take Trai to court if it proposal are no in sync with what was discussed," the legal head of a television firm said.