Ministry seeks Trai view on avoiding cable monopoly2 min read . Updated: 13 Dec 2012, 10:18 PM IST
Current rules do not impose any restrictions on cable operations in a particular city, district or state
The ministry of information and broadcasting has asked the Telecom Regulatory Authority of India (Trai) to suggest ways of avoiding a distribution monopoly being established by multi-system operators (MSOs) or large cable networks as well as local cable operators (LCOs) in different markets.
Television distribution has been monopolized by a single entity in some states, the ministry said in a media release. Besides, the current rules do not impose any restrictions on cable operations in a particular city, district or state by individual MSOs or LCOs.
The cable networks are free to operate in any area(s) of their choice after obtaining registration from the ministry.
To be sure, the recent changes in cable laws under the Cable Television Networks (Regulation) Amendment Rules 2012 have made it mandatory for the MSOs to get a licence from the ministry to operate in digitized cable markets or Digital Addressable Systems (DAS) as they are known. Earlier, MSOs and LCOs were only required to register with the local post office to be able to operate in the permitted areas of registration.
The statement said that such “monopolies may not be in the interest of consumers and may have serious implications in terms of competition, pricing and healthy growth of cable TV sector in that market."
The ministry wants Trai to provide its recommendations under Section 11 (1) (a) on the following:
“In order to ensure fair competition, improved quality of service, and equity, should any restriction be imposed on MSOs/LCOs to prevent monopolies/accumulation of interest? If yes, what restrictions should be imposed and what should be the form, nature and scope of such restrictions? Accordingly, amendments required in the Cable Television Networks (Regulation) 1995 Act and Rules framed thereunder may also be suggested.’’
An executive at a cable company said the ministry’s move was unfair as there is no monopoly in the cable industry.
“There are 60,000 cable operators, 6,000 large cable networks or MSOs and at least five national-level MSOs in the country today. Where is the question of monopoly or cartelization? Cable is already an over-regulated industry," he said.
Other cable executives said that their business also faces competition from direct-to-home (DTH) operators in various markets. “In Mumbai alone, 35% of the market has been captured by DTH. We hope that Trai will follow the required process, float a consultation paper and give the cable industry an opportunity to present its views," added the person mentioned above. He declined to be identified given the sensitivity of the matter.
On 16 May, the ministry asked Trai to examine and recommend measures to address safeguards related to cross-media restrictions. With this reference, the issue of monopolies in the broadcasting sector will also get addressed, the release stated.