News broadcasters are rallying against what they call official legitimisation of expensive carriage fees paid to cable operators in India, following the publication of the regulator's notification on tariffs and interconnection for digital addressable cable TV systems on Monday (30 April).
"The notification has legitimized the very practice the NBA [News Broadcasters Association] had hoped would be ended, i.e. the payment of steep 'carriage fees' by broadcasters. The NBA urges the government and TRAI to look into this malaise and correct it urgently," said Annie Joseph, secretary general, NBA.
The Telecommunications Regulatory Authority of India (TRAI), however, says the carriage fees are necessary given the large investment required by cable operators to upgrade their networks to support India's mandatory shift to digital television. The first phase of the cable digitisation programme will see analogue signals switched off in Delhi, Mumbai, Chennai and Kolkata on 1 July 2012.
"Keeping in view the fact that substantial investment for implementation of digital addressable cable television systems is made by multi-system operators and the cost involved in carriage of channels, the authority has decided that every MSO may fix the carriage fee," said TRAI.
"However, it should be published in the reference interconnect offer and applied in a uniform, non-discriminatory and transparent manner. The carriage fee cannot be revised upward for a minimum of two years," the regulator added.
There is also provision in the new guidelines for TRAI to intervene where cable operators are charging broadcasters too high a price for distributing their channels.
"News channels will approach the information and broadcasting ministry and TRAI to present their view on how this notification on 'carriage fee' is damaging to the news industry," Sunil Lulla, chief executive officer and managing director, Times Global Broadcasting is quoted as saying in Live Mint.
"The highest cost for news channels is the carriage fees paid to multi system operators (MSOs), this is the reason why news channels are not financially sound," he added.
Some industry experts however, agree with TRAI that carriage fees are necessary in order to sustain the ambitious programme to digitise India's vast and fragmented cable TV network by the end of 2014. Otherwise, they say, the cost would be passed down to consumers and damage digital adoption – ultimately hurting the entire broadcasting industry in India.
Deepak Jacob, general counsel and head of regulatory affairs, Star India, told Business Standard: "Carriage fees came into being because of artificial constraints in bandwidth. With TRAI mandating MSOs to carry 500 channels from January, market forces will come into play and carriage fees will come down. Cable operators will not be able to deny access to broadcasters. Additionally, the regulatory body has noted that carriage fees should be determined and charged by MSOs in a uniform, non-discriminatory and transparent manner, which will particularly benefit smaller broadcasters who till now did not have much bargaining power."