News broadcasters accuse Trai of legitimizing carriage fees
News broadcasters accuse Trai of legitimizing carriage fees
First Published: Tue, May 01 2012. 10 37 PM IST
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Updated: Tue, May 01 2012. 10 37 PM IST
Mumbai: Broadcasters have accused the Telecom Regulatory Authority of India (Trai) of legitimizing so-called carriage fees through its notification on tariffs and interconnection for digital addressable cable television systems, issued late on Monday.
These are fees that carriers of signals, such as cable TV operators, charge from broadcasters.
The channels will lobby the government and the regulator against the move.
“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,” said Sunil Lulla, chief executive officer and managing director, Times Global Broadcasting Co. Ltd, which runs the Times Now and ET Now channels. “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.”
Trai justified the carriage fee on the grounds that cable operators need to make investments in moving to a digitized network.
“Keeping in view the fact that substantial investment for implementation of digital addressable cable television systems is made by multi-system operators (large cable operators) and the cost involved in carriage of channels, the authority has decided that every MSO may fix the carriage fee,” Trai said. “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.”
Trai, however, added that it would intervene in case it is felt that carriage fees were unreasonably high.
The Trai notification is part of the government-mandated move to shift the country’s analogue cable system to digital as part of an effort to improve quality and addressability, or ensuring that all subscribers can be accounted for. It followed the information and broadcasting ministry issuing new rules to further amend the Cable Television Networks Rules, 1994, in view of the 30 June deadline for the digitization of cable TV networks in Delhi, Mumbai, Kolkata and Chennai.
The industry estimates channels are paying almost Rs4,000 crore as carriage fees every year. They say that since MSOs charge carriage fees because of capacity constraints, digitization should lead to the practice being ended.
“With digitization, the number of channels that can be broadcast increases. Consequently carriage fees would be eliminated. Trai’s order comes as a shock,” said an executive at a leading Hindi general entertainment channel who didn’t want to be identified given the sensitivity of the matter.
NBA said the move endangers the industry.
“The NBA is distressed and disappointed that Trai’s new notification has actually legalized the practice of ‘carriage fees’ and given distributors the freedom to unilaterally set the amount of ‘carriage fees’ broadcasters must pay,” it said. “This unfairly penalizes broadcasters and threatens the very survival of the broadcasting industry.”
Ashish Pherwani, associate director, Ernst and Young, said, however, that the charges are legitimate. “MSOs will have to incur costs to upgrade their systems to carry 500 channels,” he said. “Now, since the cost cannot be passed on to consumers (as Trai’s notification caps the amount consumers pay) it will have to be borne by broadcasters to a certain extent through carriage fees. The carriage fee is justified. However, the quantum of the carriage fees will be determined by market forces.”
Ashok Mansukhani, president of the MSO Alliance, also justified the charges.
“As far as carriage fees are concerned, they have been blown out of context and in any case is always a voluntary private contract and should have been left to market forces to help MSOs to recover enormous cost of infrastructure to digitalize 100 million homes,” he said. “As it is, the finance ministry has denied all fiscal/tax/infrastructure benefits to the cable industry. Either the broadcasters need to share the economic burden or the cost will get passed on to consumers, which is not desirable, considering that pay channels become costlier in digital addressable system (DAS).”
aminah.sheikh@livemint.com
First Published: Tue, May 01 2012. 10 37 PM IST
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