TRAI's New Tariff Rules Empower Consumers to Make Right Choice of their TV Channels

Dr. Sheetal Kapoor

In order to make the broadcasting market more competitive Telecom Regulatory Authority of India (TRAI), has issued new tariff plans for cable and DTH operators. The new rules try to empower the consumers to make their own choices regarding TV channels and no operator can force them to watch channels/bouquet of packages whose content they don't like. In this backdrop TRAI's new framework came into effect from 29th December 2018 but the deadline was again extended to 31st January 2019, in order to provide sufficient time to subscribers to make channel selection. Further in a Press Release dated 12th February the Authority extended the time limit for the subscribers who have not exercised their option up to 31st March 2019.It is believed that if consumer's exercise their option wisely and select their channels on the basis of quality of content they will get value for money and their existing bill on TV watching would also come down.

Chamberlin in his book on "The Theory of Monopolistic Competition" has also written about markets where there are large number of players selling differentiated products, consumer welfare is maximum. Although in the history of broadcasting it is the first time that the Indian consumer has been given the freedom to watch TV channels which they like and pay accordingly, it is believed that it would be a win-win situation for both sellers and consumers.

There are around 100 million cable service TV homes and 67 million DTH TV homes as reported on 12th February 2019, out of which around 65 per cent of the subscribers of the cable services and 35 per cent of the DTH subscribers have exercised their channel choices.Many subscribers approached TRAI that they were facing difficulties in selecting channels as the system of selecting channels has been introduced for the first time in the country.

TRAI in its statement reported that in some cases, local cable operators (LCOs) have not been able to reach out to subscribers to create awareness among them and collect the options. Many subscribers reported that they were not made aware about this switch over by their operators and they did not have IT facility or are not comfortable in using IT system to exercise their options. A few cases have been reported recently where pay channels of the subscribers who have not exercised the options have been deactivated. Such incidences are causing hardship to the subscribers.

Trai has requested all the DPOs to create a 'Best Fit Plan' for their subscribers who have not exercised their options yet and has extended the time upto Mar 31st 2019. The plan shall be designed based on consumers' usage pattern, language spoken and popularity of channels. While designing the plan, DPOs should ensure that payout per month generally does not exceed the payout per month of existing tariff plan of the subscriber.

TRAI in a press release on January 10 stated that customers have complete freedom to choose the 100 free channels (SD resolution), which would be offered in the base pack of Rs 130 (exclusive of taxes).The chosen channels could be in a-la-carte, Free to Air channels, or Pay channels or bouquet of pay channels or any combination thereof. Consumer is open to make choices amongst them. After the TRAI order, all broadcasters like Sony, Zee, Star, Discovery, Sun, Turner and Viacom have declared prices of their individual pay channels as well as those of bouquets. Thus, a major change now is that the customers have the right to choose between a-la carte and bouquet TV channels.TRAI has further clarified that the Network Capacity Fee for second television/additional television in same home or location is not mandatory. The operators are free to offer discount or waiver the entire fee but the same discount would be the same for a particular target area with regard to Network capacity Fee (NCW) on second/additional TV connections at home.

The new framework also allows the consumers to change their plans if they feel that a particular package/plan is not working. Customised packages and a-la-carte are some new things which would add to customer's experience.TRAI has even elucidated that there would be no 'lock-in period' for the subscribers till March 31, 2019 who have been migrated to 'Best Fit Plan' by the operators. Thus, the operators cannot force subscribers to continue with the Best Fit plan, if they choose their own customised plan.However, this is a beginning and the situation may evolve with prices charged by broadcasters and operators declining depending on market forces, viewership and competitive intensity and the consumers would be benefitted by getting fair price.

(The author teaches at Kamla Nehru College, University of Delhi, email: sheetal_kpr@ hotmail.com)

Views expressed are personal.