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News broadcasters plan to challenge TDSAT ruling

NBA plans to move SC against a ruling that removed restrictions on fees charged by large networks
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First Published: Sat, Dec 22 2012. 12 06 AM IST
Trai had abolished the placement fee as it wasn’t applicable in a digitized environment. Photo: Satish Kaushik/Mint
Trai had abolished the placement fee as it wasn’t applicable in a digitized environment. Photo: Satish Kaushik/Mint
Updated: Sat, Dec 22 2012. 12 42 PM IST
New Delhi: The battle between India’s news channels and its big cable operators looks set to intensify over the next few weeks and months. The News Broadcasters Association (NBA), the lobby group for the main national news channels, plans to move the Supreme Court against a tribunal ruling that removed restrictions on fees charged by multi-system operators (MSOs), or large cable networks.
The Telecom Regulatory Authority of India (Trai) had in two orders earlier this year said the MSOs could not charge a so-called placement fee from broadcasters while they could levy carriage fees that were reasonable. The latter fee is what channels pay the MSO for being carried on the network. The placement fee refers to the channel’s positioning in a preferred band or package.
Trai had abolished the placement fee as it wasn’t applicable in a digitized environment, towards which India is shifting over the next few years. However, the Telecom Disputes Settlement and Appellate Tribunal struck down these orders in a 19 October judgement.
News broadcasters say the carriage fee, put at a cumulative Rs.1,000 crore per year, has hit their balance sheets hard.
“Some news channels are known to have paid Rs.50 crore a year, that is 50% of the total cost of operations annually. Obviously, news channels have not been able to make money,” said a news channel executive.
Two NBA members said the grouping will approach the court over the issue.
“The TDSAT judgement was adverse. It went against all that Trai has proposed in its interconnect orders of April and May 2012. While Trai said that a cable operator could not demand a placement fee, TDSAT said that not only could he demand a placement fee but also ask for carriage fee,” said a top executive of a news television broadcaster. None of the news channel executives spoken to for this report agreed to be identified owing to the sensitivity of the matter.
The cable networks plan to be aggressive in protecting their interests.
“Let them go to court,” said Jagjit Singh Kohli, managing director and chief executive officer of DigiCable, a large MSO. “Our appeal is also pending in the Supreme Court as we got only partial relief from TDSAT,” he said, referring to the tribunal’s 19 October ruling.
According to the promoter of another news channel, the outgoing chairman of Trai had even suggested between 50 paise and Rs.1 per set-top box as carriage fee to be charged by a cable platform owner in case a channel really wanted to be part of a particular network. “However, it was a suggestion and was not officially included. Later, anyway several clauses in Trai orders were struck down,” the person said.
Although switching to digital cable from analogue—the shift was made mandatory in December last year—was supposed to lower the carriage fee for broadcasters and get rid of the placement fee, the transformation did not benefit news channel broadcasters who are still trying to beat down the prices quoted by MSOs.
“When the government decided to convert analogue to digital cable throughout India, the understanding was that the money would come from the consumers. Since digitization would herald transparency, under-declaration of subscriber numbers would not be possible,” said the promoter of the broadcasting company cited earlier.
Interestingly, TDSAT’s decision brought the policy in line with that applicable to direct-to-home (DTH) satellite broadcasts, where there is no limit on such fees. While this tussle goes on between several news channels and large cable networks over carriage and placement fees, on Friday Trai released a consultation paper seeking comments from stakeholders on resolving the issue. The comments have to be submitted in writing by 11 January. The NBA members cited above said the industry grouping will be sending in its comments.
Kohli of DigiCable said Trai was seeking to revive an issue that had been settled by the tribunal’s order.
“We are very disappointed with the consultation paper floated by Trai today. NBA seems to be driving the Trai agenda. TDSAT had already decided the issue of carriage and placement fees. Trai is questioning it again.”
In a related development, the market share and television ratings data released by TAM Media Research has been further deferred till 9 January. Although NBA members confirmed the development, a TAM Media executive refused to do so. “Negotiations are still on,” he said.
News channels are seeking to delay the release of data on their performance after digitization— the process began on 1 November—as it is likely to show a dip, Mint reported on 20 December.
The TAM ratings issue is linked to carriage fees as lower viewership numbers could give the cable platforms more power to negotiate. The head of a cable distribution company, which aggregates channels for distribution, said that “poor numbers would push news channels to improve visibility and that would cost more. They would need better visibility to show their advertisers as well.”
The challenge for most news channels is that their subscription deals are made through third-party distribution companies such as Media Pro Enterprise India Pvt. Ltd but they conclude the carriage fee deals on their own. They need to aggregate the business to get better deals, said this person, whose company distributes a large bouquet of channels.
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First Published: Sat, Dec 22 2012. 12 06 AM IST
More Topics: TDSAT | NBA | TAM | carriage fee |