TRAI Seeks Relook at Caps on Channel Discounts

The Telecom Regulatory Authority of India (TRAI) has issued a consultation paper to re-look at imposing restrictions on discounts offered by broadcasters on channel bouquets after the implementation of the new regulatory framework for cable and broadcasting services.

The regulator on Friday hit out at the broadcasters and said the lack of any caps on discounts offered on bouquets, compared to a-la-carte channel pricing, is being "misused to throttle market discovery of TV channel prices, by giving huge discounts on the bouquets."

"The tariff declared by the broadcasters under the new regulatory framework shows that bouquets are being offered at a discount of up to 70 percent of the sum of the a-la-carte rates of pay channels constituting those bouquets. It indicates that in absence of any restriction on the discount on the offering of bouquets, broadcasters are making prices of a-la-carte channels illusory thereby impacting the a-la-carte choice of channels by consumers," TRAI said in a statement.

TRAI's new regulations/orders for the television and broadcasting sector gave freedom to consumers to select television channels they want to watch. Analysis reveals that while the new regulatory framework has brought the transparency in TV channel pricing, harmonised business processes in the sector and reduced disputes among stakeholders. However, adequate choice to select TV channels has not been given to the consumers.

It further said that in all fairness, a lot was expected from the broadcasters and the Distribution Platform Operators ( DPO) to use flexibility given under the new regulatory framework to address the concerns and aspirations of the consumers. However, given flexibility was misused to throttle market discovery of TV channel prices by giving huge discounts on the bouquets.

Earlier this year, the Supreme Court had dismissed a petition by TRAI for reinstatement of a cap of 15 percent on discounting of channel bouquets. In its initial tariff order, the regulator has said that channel bouquets should not be priced lower than 85 percent of the sum of the Maximum Retail Price (MRP) of all the channels in the pack.

On Friday, the telecom and broadcast regulator also pointed to the challenge of having too many bouquets with the same kind of channel mix, being offered by both broadcasters and distributors. The regulator said this creates confusion among consumers, forcing them to opt for suggested packs instead of choosing channels according to their preference.

TRAI is seeking the views of stakeholders on various issues in the consultation paper, which includes the ceiling price of channels for inclusion in a bouquet, need for the formation of a bouquet by broadcasters and DPOs, variable Network Capacity Fee (NCF) and discount on long-term plan.