No retreat likely on DTH regulations

In a major blow to the future revenue collections of pay-channel broadcasters like Star, Zee, Sony and ESPN from the Direct-to-Home (DTH) companies, broadcast regulator Trai has indicated that it may not go back or modify its recently released paper on the interconnection agreement for the DTH companies.

Under the new provisions, the Telecom Regulatory Authority of India (Trai) has made it mandatory for the broadcasters to offer their channels on a-la-carte basis (individual channels) and bouquets.

Also, broadcasters can not compel the DTH operators to buy their entire bouquet of channels and will be free to package whatever channel they want to offer to their subscribers.

But the pay-channel broadcasters want Trai to allow the market forces to dictate the commercial terms decided between them and the DTH operators. They see the new regulations as a possible threat to their future revenue collections.

"These provisions stipulate broadcasters to reveal their commercial arrangements with the DTH companies and does not allow them to push channel bouquets. If implemented, pay-channel broadcasters' revenue collections will decline as most of them have only a couple of extremely popular channels in their bouquets which will be picked, while the remaining will be left by the DTH companies," an industry source said.

The Indian Broadcasting Foundation (IBF), an association of broadcasters, today met Trai officials to request them to dilute the new provisions of the Telecommunication (Broadcasting and Cable Services) Interconnection (Fourth Amendment) Regulation, 2007 for the DTH that will come into effect from December 1.

According to sources, certain members of IBF, including Star TV and Sony TV, want Trai to allow broadcasters to sell bouquets or at least a minimum number of channels in a bouquet as opposed to selling only individual channels.

"Broadcasters fear that once rules on the DTH are enforced, cable operators will also start demanding the same arrangement in cable industry," an industry source pointed.

But Trai is unlikely to incorporate these changes. "Trai has made the new regulations looking at the launch of at least four new DTH service and the past experiences of DTH players and broadcasters. It may not make much changes in the DTH interconnection regulations," a source close to the development said.

According to the current arrangement, broadcasters sell the entire bouquet of their channels to the DTH service providers on mutually decided commercial terms. This helps the broadcasters to push several of the less-popular channels to the DTH companies at mutually agreed fees.

Under the new provisions, broadcasters will also have to declare details of their commercial agreements with the DTH companies in addition to publishing the stand-alone rates of pay channels in their bouquet of channels.

Also, broadcasters and the DTH companies have to enter into an interconnect agreement within 45 days of DTH companies seeking for the television channels.

"We want Trai to note our concerns on various regulatory issues including the new regulations for DTH. Trai has noted our concerns and we hope it will address them soon," R C Venkateish, managing director, ESPN Software India told Business Standard.

The IBF is an association of broadcasters and has members including Star India, Zee TV, Sony TV, ESPN, NDTV, ETV, among others.