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Telecom Regulatory Authority Of India - Section

Section 34 in Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017

34. As far as the market failure is concerned, it is a well established fact that the main purpose for which addressability introduced was to ensure transparency across the value chain and to ensure adequate choice and better quality services to subscribers at affordable rates. While the broadcasting industry has witnessed tremendous growth in the last decade in terms of increase in number of channels, exponential increase in revenues of broadcasters and distributors of television channels but still the effective choice is not made available to the subscribers. Number of disputes among stakeholders has also grown. This indicates that all is not well within the industry. Even today, a-la-carte choice of TV channels for subscriber is illusionary either because a-la-carte rates of TV channels are disproportionately high in comparison to bouquets which forces subscribers to opt for bouquets or they are simply denied the a-la-carte choice by distributors of television channels. The main reason for this cited by the distributors of television channels is the economic un-viability as they usually do not get a-la-carte channels from broadcasters simply because the wholesale a-la-carte rates of channels are too high and the bouquets are heavily discounted even to the extent of 90% of the sum of a-la-carte rates of channels. Even cursory reading of data submitted to TRAI under Register of Interconnection Agreement Regulations and RIOs by broadcasters reveals that there is a huge difference between the rates declared in RIO and the rates at which actual deals are taking place in the market. This is even acknowledged by Hon'ble TDSAT in NSTPL judgment that actual deals are happening at much lower prices than that of RIO prices, rendering the RIO as a meaningless exercise. Even after the NSTPL judgement, the RIOs submitted by broadcasters continues to have unrealistically high a-la-carte rates and heavily subsidized bouquet rates. This is forcing distributors of television channels to opt for bouquets for their economic survival and thus they are not offering a-la-carte choice of channels to the subscribers. Therefore it is evident that fruits of addressability have not been passed on to the subscribers and subscribers are not able of exercise their choice in subscribing to channels. This clearly indicates to market failure. Therefore, it was incumbent on TRAI to issue a tariff order which protects the interests of subscribers and service providers and at the same time ensures orderly growth of the sector. It is worth noting here that there is no legal bar that TRAI cannot make regulation or issue a tariff order without the evidence of market failure. Even in absence of market failure, TRAI can issue tariff orders and regulations for orderly growth of the sector and to ensure customer/ subscriber protection.