There would be minimum legal battles and greater transparency in the commercial agreements signed between broadcasters, multi service operators (MSOs) and local cable operators (LCOs) if all parties shift from a negotiated subscriber base led commercial agreements to a monthly fixed amount-based agreement from 2011 onwards. Also, all such commercial agreements should follow in the fiscal year?April to March?as opposed to the calendar year or any 12 months in between.
A Trai proposal says the current norms of contracts between broadcasters and cable operators/MSOs on negotiated subscriber base results in complications and legal battles. However, leading broadcasters have opposed the move even before it can be discussed between all stakeholders. ?The proposal holds good if the cable business comes under the licensing regime. The proposal has several gaps which will lead to even more legal complications,? a senior executive of a leading broadcasting firm said. Some cable operators have welcomed the move.
?The interconnection agreement between a broadcaster and an MSO would be based on a per month agreed subscription amount for the area of operation of MSO. The subscription amount is to be decided between the parties on the basis of mutual negotiations, which in turn would depend on the expected collection of cable TV charges from the subscribers of the MSO operation area,? the proposal said.
All stakeholders, including the broadcasters and cable operators, MSOs have to respond by January 15. Under the new arrangement, the MSO would have to pay to the broadcaster the agreed subscription amount for each month within 15 days from the close of the relevant month. Similarly, the LCO will make a similar payment to the MSOs. However, the contentious issue in the new proposal pertains to the entry of any new MSO or LCO.