Telecom Regulatory Authority of India Notification

Transcription

1 Telecom Regulatory Authority of India Notification New Delhi January 15, 2004 / Pausa 25, 1925 No /2004-Eco In exercise of the powers conferred upon it under sub-section (2) of section 11 of the TRAI Act, 1997 as amended read with the Notification No.39 dated issued from file No.13-1/2004-Restg. by the Government of India under clause (d) of sub-section (1) of section 11 and proviso to clause (k) of section 2 of the Telecom Regulatory Authority of India Act, 1997 to notify, by an Order in the Official Gazette, tariffs at which Telecommunications (Broadcasting and Cable Operation) Services shall be provided, the Telecom Regulatory Authority of India hereby makes the following Order. THE TELECOMMUNICATION (BROADCASTING AND CABLE) SERVICES TARIFF ORDER 2004 [1 of 2004 ] Section I Title, Extent and Commencement 1. Short title, extent and commencement: i. This Order shall be called The Telecommunication (Broadcasting and Cable) Services Tariff Order ii. The Order shall cover tariffs for all Telecommunication (Broadcasting and Cable) Services throughout the territory of India as also those originating in India or outside India and terminating in India. iii. The Order shall come into force on the date of its notification in the Official Gazette. Section II Tariff 2. The charges payable by (a) Cable subscribers to cable operator; (b) Cable operators to Multi Service Operators/Broadcasters (including their authorised distribution agencies); and (c) Multi Service Operators to Broadcasters (including their authorised distribution agencies) Prevalent as on 26th December 2003 shall be the ceiling with respect to both free-to-air and pay channels, both for CAS and 493

2 non-cas areas until final determination by Telecom Regulatory Authority of India on the various issues concerning these charges. Section III 3. Explanatory Memorandum Annex A to this Order contains an Explanatory Memorandum for the issue of this Order. Section IV 4. Interpretation In case of dispute regarding interpretation of any of the provisions of this Order, the decision of the Authority shall be final and binding. BY ORDER Dr. Harsha Vardhana Singh Principal Advisor cum Secretary Telecom Regulatory Authority of India 494

3 ANNEX A EXPLANATORY MEMORANDUM able Television Networks (Regulation) Act, 1995 was amended in 2002 and Section 4A was inserted in the original Act which envisages Transmission of programmes through addressable system [popularly referred to as Conditional Access System (CAS)] with effect from such date as may be specified in the Notification. A Notification dated 14th January 2003 was issued by the Ministry of Information and Broadcasting, Government of India making it obligatory for every cable operator to transmit/re-transmit programmes of every pay channel through an addressable system in Chennai Metropolitan area, Municipal Council of Greater Mumbai area, Kolkata Metropolitan area and National Capital Territory of Delhi within six months from 15th day of January, Subsequently vide Notification dated 10th July, 2003 the date of implementation was deferred and fixed within six months from 1st March, 2003, and Chennai and the areas of NCT of Delhi, Kolkata, Mumbai to be covered by CAS were also specified. Thereafter vide Notification dated 29th August, 2003, the earlier Notification dated 10th July, 2003 was amended and areas in NCT of Delhi where CAS was to be implemented were deleted. 2. he Hon ble Delhi High Court, vide orders dated 4th December 2003, quashed the Notification dated 29th August 2003 issued by Ministry of Information & Broadcasting, Government of India. The cable operators of the notified areas partially withdrew pay channels from mid-night of 15th December elhi High Court in CW no /2003 in its order dated allowed the implementation of CAS in Delhi. The Delhi High Court further directed that after expiry of three months, appropriate direction shall be issued after taking into consideration the feed back of three months experience. 4. he Government of India issued a Notification No.39 dated 9 th January 2004 whereby, under the proviso to clause (k) of subsection (1) of section 2 of the TRAI Act, 1997 as amended, the scope of the expression telecommunication services was increased to include the broadcasting services and cable services also. Thus, the broadcasting and cable services also came within the purview of the Telecom Regulatory Authority of India. Through this Notification, in exercise of the powers under clause (d) of sub-section (1) of section 11, the Telecom Regulatory Authority of India was further authorised to, inter-alia, specify standard norms for and periodicity of revision of rates of pay channels including interim measures. 5. There is considerable uncertainty about different aspects of the Conditional Access System (CAS) regime and a detailed 495

4 examination is required of the various issues, including the rates for the broadcast and cable services in CAS and non-cas areas. Not only are there no standard rates or conditions at which services are provided by the cable operators to the subscribers, there are reports that there may be an increase in the rates charged to the subscribers. The Authority has begun its process of examination of the relevant issues, including those relating to CAS, through a consultation process. To bring some certainty in the rates prevailing for these services, it was considered necessary by the Telecom Regulatory Authority of India to intervene in the matter. The TRAI has, therefore, deemed it appropriate to specify as ceiling the rates at which the charges will be paid by the cable subscribers to cable operators, by the cable operators to multi service operators and by multi service operators to broadcasters, as those prevailing on 26th December 2003 with respect to both free-to-air channels and pay channels, and for both CAS and non-cas areas. This intervention will continue until a final determination by the Telecom Regulatory Authority of India on the various issues involved. The Hon ble Delhi High Court, in CW No /2003 dated 26 th December 2003, directed the continuance of implementation of CAS in Delhi on a trial basis, initially for a period of three months, after which appropriate directions would be issued after taking into account the feedback for the three months experience. The ceiling rates have therefore been specified as those prevailing on 26 th December,

5 CLARIFICATIONS ON TELECOMMUNICATION (BROADCASTING AND CABLE) SERVICES TARIFF ORDER After announcement of the Telecommunication (Broadcasting and Cable) Services Tariff Order 2004, a number of questions have been raised in regard to the underlying import of the provisions of the aforesaid Order. These are answered below: Q 1 What is the coverage of The Telecommunication (Broadcasting and Cable) Service Tariff Order 2004 dated ? Ans: The said or shall cover, throughout the territory of India, both for CAS and non-cas areas, charges payable by (a) cable subscribers to cable operator; (b) cable operators to multi service operators/broadcasters (including their authorised distribution agencies); and (c) multi service operators to broadcasters (including their authorized distribution agencies). Q 2 What is meant by word charges mentioned in the Tariff Order? Ans: Charges mean and include the charges/tariff rates payable by one party to the other by virtue of the formal/informal agreement prevalent on 26 December The principle applicable in the formal/informal agreement prevalent on 26 December 2003, should be applied for determining the scope of the term charges, for instance, * if under the agreement applicable as on 26 December, 2003 specified the total amount as rate or charge per subscriber, multiplied by the subscriber base, the ceiling applies to the per subscriber charge and not to the subscriber base. * if earlier the amount paid varied on certain limited occasions linked to the likely change in the subscribers base for a specified short period, such a practice could still continue. However, the charge per subscriber in such cases should not be more than those applicable on 26 December Press Release No. 13/2004, dated 19 February

6 Q 3 What about the charges if the cable service provider gives lesser number of channels compared to those shown on 26th December 2003? Ans: The ceiling charges are specified in terms of the products that they pertained to, namely the channels that were shown on 26 December Normally, there should not be a reduction in the number of channels shown on 26 December If, however, due to certain unavoidable reasons, the number of channels is reduced, the charges should also be reduced on a pro-rata basis. Q 4 What about the situation where the channel or cable service was not available on 26 December, and the channel or cable service is being provided after this date? Ans: In such cases, the Tariff Order does not provide any specific ceiling, and the formal/informal agreements regarding such charges could be entered into by the relevant parties. However, in specifying the relevant charges, the charges that the broadcaster/multi system operator/cable operator might have in place in the contiguous areas/ similar channels as on 26 December 2003 should be kept in mind. Q 5 Will the TRAI intervene, in case the subject matter of dispute between two service providers relates to the number of subscribers? Ans: The remedy in this case would lie in * a Civil Court; * Telecom Disputes Settlement and Appellate Tribunal (TDSAT), under section 14 of the TRAI Act.. Q 6 Whether individual subscribers can file complaints with the TRAI? Ans: Under the TRAI Act, the TRAI does not deal with complaints from individual subscribers/consumers for whom redressal mechanism is available before a Consumer Disputes Redressal Forum or a Consumer Disputes Redressal Commission or the National Consumer Redressal Commission established under section 9 of the Consumer Protection Act, 1986 (68 of 1986). Q 7 What is the remedy available for contravention of The Telecommunication (Broadcasting and Cable) Service Tariff Order 2004? 498

7 Ans: In case of any violation of TRAI s Order/Directive/Regulation, if a complaint is filed with TRAI with properly documented evidence, TRAI would, after examining the matter give a direction that the Order be followed. If the Order is still not followed, the TRAI has the option of filing a complaint before the appropriate courts under section 29 and 30 read with section 34 of the TRAI Act. Q 8 What is the remedy available to the stakeholders in case of a dispute between two or more service providers or between a service provider and a group of consumers? Ans: In case of a dispute between two or more service providers or between a service provider and a group of consumers, the dispute may be referred to Telecom Disputes Settlement and Appellate Tribunal (TDSAT) under section 14 of the TRAI Act. For more information, please see sections 11, 13 and 14 of the TRAI Act on the TRAI website 499

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9 Telecom Regulatory Authority of India Notification New Delhi March 10th, 2004 No /2004-Eco In exercise of the powers conferred upon it under sub-section (2) of section 11 of the Telecom Regulatory Authority of India, 1997 as amended read with the Notification No.39 dated issued from file No.13-1/2004-Restg. by the Government of India under clause (d) of sub-section (1) of section 11 and proviso to clause (k) of section 2 of the Telecom Regulatory Authority of India Act, 1997 to notify, by an Order in the Official Gazette, tariffs at which Telecommunications (Broadcasting and Cable Operation) Services shall be provided, the Telecom Regulatory Authority of India hereby makes the following Order. The Telecommunication ( Broadcasting and Cable) Services Tariff (First Amendment) Order, 2004 (3 of 2004) Section I Title, Extent and Commencement 1. Short title, extent and commencement: i. This Order shall be called The Telecommunication (Broadcasting and Cable) Services Tariff ( First Amendment) Order ii. Except Chennai Metropolitan Area where interim stay has been granted by Madras High Court in writ petition numbers 4863, 4890, 4936 and 4919 of 2004, the Order shall cover tariffs for all Telecommunication (Broadcasting and Cable) Services throughout the territory of India as also those originating in India or outside India and terminating in India. iii. The Order shall come into force on the date of its notification in the Official Gazette. Section II Tariff 2. Clause 2 of Section II of The Telecommunication (Broadcasting and Cable) Services Tariff Order, 2004, shall be substituted by the following: 2. The charges payable by 501

10 (a) (b) (c) Cable subscribers to cable operator; Cable operators to Multi Service Operators/Broadcasters (including their authorised distribution agencies); and Multi Service Operators to Broadcasters (including their authorized distribution agencies) prevalent as on 26th December 2003 shall be the ceiling until final determination by Telecom Regulatory Authority of India on the various issues concerning these charges. Section III 3. Explanatory Memorandum Annex A to this Order contains an Explanatory Memorandum for the issue of this Order. BY ORDER Dr. Harsha Vardhana Singh Principal Advisor cum Secretary Telecom Regulatory Authority of India 502

11 Explanatory Memorandum The TRAI provided its interim Recommendations on 23rd February, 2004, to the Government and based on a number of factors that were mentioned therein, Recommended that the Government Notification No. SO 792 (E) dated 10th July, 2003, which notified the areas for implementing CAS, be kept in abeyance for at least three months. The Recommendation was accepted by the Government. Vide Notification No. S.O.271(E), dated 27th February, 2004, the Government suspended the mandatory operation of CAS until such date as may be notified by the Government. Due to this Notification there are no separate CAS or non- CAS areas and such distinction has been withdrawn in this amendment. This would lead to a situation that in non-cas areas, the 26th December, 2003 ceiling would continue as such. For such erstwhile notified mandatory CAS areas, where CAS was not actually implemented, the ceiling of 26th December, 2003, will continue. For erstwhile notified mandatory CAS areas where CAS was implemented, the Authority recognises that CAS may continue on a voluntary basis and in such a case the ceiling would again be the rates prevailing on 26th December, 2003, which the Authority recognises may have been lower than the rates in non-cas areas. The Notification is not applicable for Chennai Metropolitan Area on account of stay granted by Madras High Court in writ petition numbers 4863, 4890, 4936 and 4919 of

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13 TELECOM REGULATORY AUTHORITY OF INDIA August 13, 2004 NOTIFICATION New Delhi No.1-29/2004-B&CS In exercise of the powers conferred upon it under sub-section (2) of section 11 of the Telecom Regulatory Authority of India, 1997 as amended read with the Notification No.39 dated issued from file No.13-1/2004-Restg. by the Government of India under clause (d) of sub-section (1) of section 11 and proviso to clause (k) of section 2 of the Telecom Regulatory Authority of India Act, 1997 to notify, by an Order in the Official Gazette, tariffs at which Telecommunications (Broadcasting and Cable Operation) Services shall be provided, the Telecom Regulatory Authority of India hereby makes the following Order. The Telecommunication ( Broadcasting and Cable) Services Tariff (Second Amendment) Order, 2004 (5 of 2004) Section I Title, Extent and Commencement 1. Short title, extent and commencement: i. This Order shall be called "The Telecommunication (Broadcasting and Cable) Services Tariff ( Second Amendment) Order 2004". ii. The Order shall be applicable throughout the territory of India. iii. The Order shall come into force on the date of its notification in the Official Gazette. Section II Tariff 2. In clause 2 of Section II of The Telecommunication (Broadcasting and Cable) Services Tariff Order as amended by The Telecommunication (Broadcasting and Cable) Services Tariff (First Amendment) Order 2004 after the words charges, the words excluding taxes shall be inserted. 505

14 3. Explanatory Memorandum Section III The Government of India in the Finance Bill, 2004 as introduced in the Lok Sabha has proposed to increase the service tax and levy an educational cess on cablel services. As the Authority has put a ceiling on the Cable TV service rates, a clarification has been sought that in view of the increase in the taxes, whether the cable TV service rates could be increased or not. Regulated prices are generally exclusive of taxes and in this case also the intention of the Authority was to place a ceiling on the charges exclusive of taxes. To clarify the issue, the Authority has decided to amend the tariff order. (Rakesh Kacker) Advisor (B&CS) 506

15 TELECOM REGULATORY AUTHORITY OF INDIA A-2/14, Safdarjung Enclave, New Delhi NOTIFICATION No.1-29/2004-B&CS Dated: October 1, 2004 In exercise of the powers conferred upon it under sub-section (2) and para (ii), (iii) and (iv) of clause (b) of sub-section (1) of section 11 of the Telecom Regulatory Authority of India, 1997 read with the Notification No.39 (S.O No. 44 (E) and 45 (E))dated issued from file No.13-1/2004-Restg. by the Central Government under clause (d) of subsection (1) of section 11 and proviso to clause (k) of section 2 of the Telecom Regulatory Authority of India Act, 1997, the Telecom Regulatory Authority of India hereby makes the following Order. 1. Short title, extent and commencement: i. This Order shall be called "The Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004".(6 of 2004) ii. The Order shall be applicable throughout the territory of India. iii. The Order shall come into force on the date of its notification in the Official Gazette. 2. Definitions: (a) (b) (c) broadcaster means any person including an individual, group of persons, public or body corporate, firm or any organization or body who/which is providing broadcasting service and includes his authorized distribution agencies; broadcasting services means the dissemination of any form of communication like signs, signals, writing, pictures, images and sounds of all kinds by transmission of electro magnetic waves through space or through cables intended to be received by the general public either directly or indirectly and all its grammatical variations and cognate expressions shall be construed accordingly; cable operator means any person who provides cable service through a cable television network or otherwise controls or is responsible for the management and operation of a cable television network; 507

16 (d) (e) (f) (g) (h) cable service means the transmission by cables of programmes including re-transmission by cables of any broadcast television signals; cable television network means any system consisting of a set of closed transmission paths and associated signal generation, control and distribution equipment designed to provide cable service for reception by multiple subscribers; charges means and includes the rates (excluding taxes) payable by one party to the other by virtue of the written/oral agreement prevalent on 26th December The principle applicable in the written/oral agreement prevalent on 26th December, 2003, should be applied for determining the scope of the term "rates" free to air channel means a channel for which no fees is to be paid to the broadcaster for its retransmission through electromagnetic waves through cable or through space intended to be received by the general public either directly or indirectly ; multi system operator means any person who receives a broadcasting service from broadcaster and/or their authorized agencies and re-transmits the same to consumers and/or retransmits the same to one or more cable operators; (i) pay channel, means a channel for which fees is to be paid to the broadcaster for its retransmission through electromagnetic waves through cable or through space intended to be received by the general public either directly or indirectly.; 3. Tariff: The charges, excluding taxes, payable by (a) Cable subscribers to cable operator; (b) Cable operators to multi system operators/broadcasters (including their authorised distribution agencies); and (c) Multi system operators to broadcasters (including their authorised distribution agencies) prevalent as on 26th December 2003 shall be the ceiling with respect to both free-to-air and pay channels. Provided that if any new pay channel(s) that is/are introduced after or any channel(s) that was/were free to air channel on is/are converted to pay channel(s) subsequently, then the ceiling referred to as above can be exceeded, but only if the new channel(s) are provided on a stand alone basis, either individually or as part of new, separate bouquet(s) and the new channel(s) is/are not included in the bouquet being provided on by a particular broadcaster. The extent to which the ceilings referred to above can be exceeded would be limited to the rates for 508

17 the new channels. For the new pay channel(s) as well as the channel(s) that were free to air as on and have subsequently converted to pay channel(s) the rates must be similar to the rates of similar channels as on : Provided further that in case a multi system operator or a cable operator reduces the number of pay channels that were being shown on , the ceiling charge shall be reduced taking into account the rates of similar channels as on as on Reporting Requirement The broadcasters of such new pay channel(s) that have been introduced after or of any channel(s) that was a free to air channel on is/are converted to a pay channel subsequently, shall furnish to the Authority information in respect of charges for these channels in Schedule I of this Order. This information shall be furnished within seven days of coming into force of this order or the launch of new pay channel(s)/conversion of free to air channel (s) to pay channels, whichever is applicable. 5. Repeal The Telecommunication (Broadcasting and Cable) Services Tariff Order 2004 dated 15th January 2004 along with its amendments is hereby repealed. 6. Explanatory Memorandum Annex A to this order contains an Explanatory Memorandum for the issue of this Order (Dr. Harsha Vardhana Singh) Secretary Cum Principal Advisor 509

18 Annex A EXPLANATORY MEMORANDUM 1. The TRAI vide TTO dated had specified as ceiling the rates at which the charges will be paid by the cable subscribers to cable operators, by the cable operators to multi system operators and the multi system operators to broadcasters, as those prevailing on 26 th December, A number of representations have been received seeking clarification on the manner in which new pay channels can be priced and the impact on retail prices. Similarly, clarifications have been sought on the impact of conversion to pay channels of channels that were free-to-air on 26 th December, This issue has been carefully considered by the Authority. Since new channels will be coming into the market a mechanism has to be provided for pricing of these new channels. At the same time, there is a need to conserve the protection provided to the consumers by the Tariff Order dated To maintain the sanctity of the ceiling, it has been decided that pay channels launched after should not be allowed to become part of bouquet of channels being provided on A similar rule would apply for those channels that were free-to-air on and later convert to pay. It is expected that this would give choice to the operators and through them to the consumers. 4. These new pay channels may be offered individually or as a bouquet of channels which are not covered by the ceiling specified by the tariff order dated Thus for those consumers who do not get the new pay channels the ceilings already prescribed would continue. Where the consumers get the new pay channels, the extent to which the ceilings referred to above can be exceeded would be limited to the rates for the new channels. 5. The Authority has considered the question of fixing a ceiling price for new pay channels that have been introduced after or for any channels that was a free to air channel on is subsequently converted to a pay channel. Fixation of prices charged for new pay channels to consumers is difficult because of large variations of these prices and of the difficulty in linking these to costs. Further this is a localized issue which is not easily amenable to centralized regulation. Prices in different parts of the country are based on different systems using different methodologies for fixing the subscriber base. Many of these problems will get resolved if addressability is introduced, giving consumers choice and making 510

19 the interconnection agreements more transparent. TRAI has separately sent recommendations to the government which, interalia, provide for a framework for transition to addressability in different situations. However, in the interim period prices will have to be regulated. This revised tariff order provides the framework for such regulation. 6. Thus the Authority has not lifted the ceiling for the pay channels that existed as on For the new pay channels introduced and the free to air channels converted to pay thereafter, the Authority expects that the rates for these channels would be similar to the rates prevalent on for similar channels. The Authority has therefore decided that broadcasters would furnish to the Authority information in respect of charges for these channels in the Schedule I of this Order. This information shall be furnished within seven days of coming into force of this order or the launch of new pay channels /converted Free to Air Channels to pay channels, whichever is applicable. After reviewing the information, the Authority would intervene in the matter, if necessary. 7. The Authority has also considered the issue regarding ceiling charges in case a multi system operator or a cable operator gives lesser number of pay channels compared to those shown on 26 th December, The Authority has decided that in this case the ceiling charge shall be reduced taking into account the rates of similar channels as on In case of any complaint, the Authority would intervene in the matter, if necessary. 8. For ease of reference a self contained order has been issued repealing the earlier order dated and all its amendments. Consequently the order now issued would supersede all previous orders, amendments and clarifications. 511

20 Schedule I Format for Reporting Rates by Broadcasters to TRAI for New Pay Channels Launched or Converted Free To Air Channel to Pay Channels after (Refer Section 4 of The Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order a)name of the Channel b) Genre of Channel (eg. Entertainment, Sports, Movies etc.) 2. a) Language of Channel b) Target Audience (National or Regional, if Regional, specify state(s) ) 3. Whether channel is a pay channel in the whole of the country or only in part of the country. (Specify states if pay in part of the country) 4. a) Is it being offered as individual channel or bouquet of channel b) If bouquet, name other channels c) Name of owners of channels in the bouquet. 5 a) Rate of channel, if offered as individual channel b) Rate of channel in Chennai 6 a) Rate of bouquet if offered as part of the bouquet b) Revenue share arrangement between owners of channels in the bouquet 7 a) Expected Advertisement Revenue b) If channel is existing FTA channel, revenue for last three years 8 Likely Impact on Consumer Tariff 512

21 TELECOM REGULATORY AUTHORITY OF INDIA A-2/14, Safdarjung Enclave, New Delhi NOTIFICATION No.1-29/2004-B&CS Dated: October 26, 2004 In exercise of the powers conferred upon it under sub-section (2) and para (ii), (iii) and (iv) of clause (b) of sub-section (1) of section 11 of the Telecom Regulatory Authority of India Act, 1997 read with the Notification No.39 (S.O No. 44 (E) and 45 (E)) dated issued from file No.13-1/2004-Restg. by the Central Government under clause (d) of sub-section (1) of section 11 and proviso to clause (k) of section 2 of the Telecom Regulatory Authority of India Act, 1997, the Telecom Regulatory Authority of India hereby makes the following Order. 1. Short title, extent and commencement: i. This Order shall be called "The Telecommunication (Broadcasting and Cable Services (Second) Tariff (First amendment) Order (7 of 2004) ii. The Order shall be applicable throughout the territory of India. iii. iii. The Order shall come into force on the date of its notification in the Official Gazette. 2. In the second proviso of clause 3 the Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004 after the words Provided further that in case, the words a broadcaster or shall be inserted. 3. Explanatory Memorandum This Order contains an Explanatory Memorandum for the issue of this Order. (Rakesh Kacker) Advisor(B&CS) 513

22 EXPLANATORY MEMORANDUM In the Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004, reduction in rates was specified in the second proviso of clause 3 for multi system operators and cable operators. It is considered that the same principle should also apply in case a broadcaster reduces the number of pay channels being supplied or when a pay channel converts into a free to air channel. In view of this, the amendment is being issued. 514

23 TELECOM REGULATORY AUTHORITY OF INDIA A-2/14, Safdurjung Enclave, NEW DELHI NOTIFICATION No.1-29/2004-B&CS Dated : In exercise of the powers conferred upon it under sub-section(2) and para (ii),(iii) and (iv) of clause (b) of sub-section (1) of section 11 of the Telecom Regulatory Authority of India Act, 1997 read with the Notification No.39 (S.O. No.44(E) and 45(E) dated issued from file No.13-1/2004-Restg by the Central Government under clause (d) of sub-section (1) of section 11 and proviso to clause (k) of section 2 of the Telecom Regulatory Authority of India Act, 1997) the Telecom Regulatory Authority of India hereby makes the following Order. 1. Short title, extent and commencement: i) This Order shall be called The Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Second amendment) Order (8 of 2004) ii) This Order shall apply throughout the territory of India. iii) The Order shall come into force with effect from The phrase prevalent as on 26 th December 2003 shall be the ceiling appearing in the second last line of para 3 under the heading titled Tariff and before the first proviso under the same para of The Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order (6 of 2004) shall be replaced by prevalent as on plus 7% shall be the ceiling. 3. Explanatory Memorandum This Order contains an Explanatory Memorandum for the issue of this Order. Dr. Harsha Vardhana Singh Secretary cum Principal Advisor 515

24 EXPLANATORY MEMORANDUM 1. TRAI has specified vide the TTO (6 of 2004) that the charges, excluding taxes, payable by (a) Cable Subscribers to Cable Operator; (b) Cable Operators to Multi System Operators /broadcasters (including their authorised distribution agencies); and (c) Multi System Operators to Broadcasters (including their authorised distribution agencies) prevalent as on 26th December 2003 shall be the ceiling with respect to both free to air and pay Channels. It was also provided in the said Tariff Order that this ceiling could be exceeded, in case if any new pay channel was introduced after or an existing FTA channel as on was converted to Pay Channel provided that they are offered on a standalone basis and the extent of increase over the ceiling would be limited to the rates for the new channels and the rates on new pay channels or converted FTA channels must be similar to the rates of similar channels as on The Tariff Order also provided for reduction in the ceiling on the same principle if the Broadcaster/ MSO/ cable Operator were to reduce the number of pay channels that were being shown as on While indicating the regulatory framework for Tariff as stated above it was also indicated in the Recommendations on Issues relating to Broadcasting and Distribution of TV Channels, (sent to the Government on October 1, 2004) that the ceiling shall be reviewed periodically to make adjustments for inflation and that the next review would be undertaken in November 2004 so that the new rates are implemented from Accordingly an exercise was undertaken to determine the adjustment rate. For this purpose the Wholesale Price Index (WPI) has been used. The figures for this index are available upto The Consumer Price Index figures have not been used, as they do not have the latest information. Also these relate to certain specific consumption baskets. Therefore for the present purpose the WPI would be more appropriate. In deciding the rate of increase to be allowed the Authority has used the figures as on on which date the inflation rate was 7.06 %. Although subsequently the rate has increased to 7.64% it is not clear whether this trend would continue in the current month or not the latest figure as on is 7.34%. For purposes of convenience and simplicity the increase has therefore been pegged at 7%. 516

25 4. Therefore, it has been decided to issue this amendment Order to allow for inflation, which has been analyzed to be at 7%. This amendment Order will come into effect from Thus the new rates will apply for the payments to be made by consumers, cable operators, multi system operators for the month of January The 7% increase will apply to the charges, excluding taxes, payable as on Thus if the payment was Rs 220/- p.m as on of which Rs. 20/- was on account of taxes, the 7% increase will be applied on Rs 200/- and an increase of Rs.14/- p.m would be the maximum permissible increase in the basic charges excluding taxes. 517

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27 TELECOM REGULATORY AUTHORITY OF INDIA NOTIFICATION New Delhi, 29 th November 2005 No. 1-13/2005 B & CS In exercise of the powers conferred upon it under sub-section (2) and Para (ii), (iii) and (iv) of clause (b) of subsection (1) of section 11 of the Telecom Regulatory Authority of India Act, 1997 read with the Notification No.39 (S.O. No. 44(E) and 45 (E) dated 09/01/2004) issued from file No. 13-1/2004-Restg by the Central Government under clause (d) of sub-section (1) of section 11 and proviso to clause (k) of Section 2 of the Telecom Regulatory Authority of India Act, 1997, the Telecom Regulatory Authority of India, hereby makes the following Order: 1. Short title, extent and commencement: i) This Order shall be called The Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Third amendment) Order 2005, (8 of 2005) ii) This Order shall apply throughout the territory of India. iii) The Order shall come into force with effect from The words and figures prevalent as on plus 7% shall be the ceiling with respect to both free-to-air and pay channels appearing immediately after the existing words Multi system operators/broadcasters (including their distribution agencies in clause (c) of Para 3 of The Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004 (6 of 2004) read with The Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Second Amendment) Order 2004 (8 of 2004) may be substituted by the following words and figures: prevalent as on as enhanced by 7% permitted w.e.f plus 4% on such enhanced charges w.e.f shall be the ceiling with respect to both free-to-air and pay channels 3. Explanatory Memorandum his Order contains as Explanatory Memorandum attached as Annexure A. By Order RAKESH KACKER) (ACTING SECRETARY- CUM- ADVISOR (B & CS)) 519

28 ANNEXURE - A EXPLANATORY MEMORANDUM 1. TRAI, vide its Tariff Order of , as amended, had frozen the cable charges excluding taxes, payable by Cable Subscribers to Cable Operator, Cable Operators to Multi System Operators/ broadcasters (including their authorised distribution agencies), Multi System Operators to Broadcasters (including their authorised distribution gencies) at the level prevailing as on 26 th December 2003 in respect of both free to air and pay channels. The Tariff Order, as amended, also permitted increase/decrease in ceiling on account of new pay channel(s) launched after or on FTA channel (s) existing on that date converting to Pay channel (s) later or on reduction in the number of pay channel(s) as shown on under certain conditions. 2. In the detailed Recommendations on Issues relating to Broadcasting and Distribution of TV Channels of , TRAI had indicated that the price regulation is intended to be temporary till such time as there is no effective competition and that the price regulation will be withdrawn as soon as there is evidence of effective competition. In this connection it may be noted that over the next 6-9 months it is expected that there are likely to be more DTH players in the market which could provide effective competition to the cable industry. The recommendations, while realizing the need to give protection for inflation in costs over a period of time, also provided that the ceiling shall be reviewed periodically to make adjustments for inflation. 3. The first periodical review for inflation adjustment was done during November 2004 and a notification was issued on further amending the Tariff Order of to provide for an increase of 7% over the ceiling cable charges (excluding taxes) prevailing as on This increase was made effective from As almost a year has passed, another review has become due for the period beginning from 1 st January An exercise was undertaken to determine the inflation adjustment rate. For this purpose, the Wholesale Price Index (WPI) has been used, as was done during the last review. 5. In deciding the rate of increase the Authority has used the annual rate of inflation calculated on a point to point to basis. The figures for these indices were available for the period up to the week ending For the week ending on the annual rate of inflation was reported as 4.62%. For the subsequent weeks ending with the week of , the inflation rate has varied, moving up 520

29 and down, between 4.75% (for the week ending with ) to 4.14% (for the week ending with ). It is not clear, if the trend of increase would continue as the inflation rate has fallen to 4.14% for the week ended from the level of 4.62% after increasing during the intervening weeks. For the purposes of convenience the rate increase to be effective from has been pegged to 4%. 6. This third amendment order has been issued to give effect to the inflation adjustment and will come into effect from The new rates will be applicable for the payments to be made by consumers, cable operators, multi-system operators for the month of January This 4% increase, would be applicable on the cable charges (exclusive of taxes) as enhanced by 7% increase permitted w.e.f vide earlier notification of The total increase on account of inflation (taking into account both the 7% increase permitted w.e.f and the proposed increase of 4% w.e.f ) would work out to 11.28% (7%+4%+4% on 7%) when calculated with reference to ceiling cable charges (exclusive of taxes) prevailing as on For example, if the cable charges (exclusive of taxes) prevailing as on was Rs. 200/- per month the increase on account of inflation adjustment in absolute terms at the permitted rates of 7% w.e.f and 4% w.e.f would work out to Rs /- [(7/100 *200)+ (4/100 *200) + (4/100 *14)]. The total cable bill for January 2006 as per this example would work out to Rs ( ). The actual extent of increase on account of inflation in absolute terms with reference to ceiling cable charges as on would vary from case to case depending upon the actual cable charges that prevailed as on in respect of a consumer/cable operator/multi system operator. 9. The Authority has separately issued a consultation paper on certain issues relating to tariffs such as provision of channels as separate channels and not as a bouquet, pricing of channels launched after and pricing of channels which migrate from one distributor to another. Decisions on these issues will be taken separately after the consultation process is over. 521

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31 TELECOM REGULATORY AUTHORITY OF INDIA NOTIFICATION New Delhi, 7th March 2006 No.1-2/2006 B & CS In exercise of the powers conferred upon it under sub-section (2) and Paragraphs (ii), (iii) and (iv) of clause (b) of subsection (1) of section 11 of the Telecom Regulatory Authority of India Act, 1997 read with the Notification No.39 (S.O. No. 44(E) and 45 (E) dated 09/01/2004) issued from file No. 13-1/2004-Restg by the Central Government under clause (d) of sub-section (1) of section 11 and proviso to clause (k) of sub section (1) of Section 2 of the Telecom Regulatory Authority of India Act, 1997, the Telecom Regulatory Authority of India, hereby makes the following Order: 1. Short title, extent and commencement: i) This Order shall be called The Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Fourth Amendment) Order 2006, (2 of 2006) ii) This Order shall apply throughout the territory of India. iii) This Order shall come into force on the date of its publication in the Official Gazette 2. (i) In the Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order, 2004 (6 of 2004), under clause 2 after the existing sub-clause (d) and the entry relating thereto, the following sub clauses and the entry relating thereto shall be inserted as subclauses dd) and (ddd), respectively, namely:- (dd) Ordinary cable subscriber means any person who receives broadcasting service from a cable operator and uses the same for his/her domestic purposes. ddd) Commercial cable subscriber means any person, other than a multi system operator or a cable operator, who receives broadcasting service at a place indicated by him to a broadcaster, multi system operator or cable operator, as the case may be, and uses such signals for the benefit of his clients, customers, members or any other class or group of persons having access to such place. Explanatory Note The distinction between an ordinary cable subscriber and a commercial cable subscriber is in terms of the difference in the use to which such signals are put. The former would use it for his/her own use or the use of his/her family, guests etc. while the latter would 523

32 over commercial and other establishments like hotels, restaurants, clubs, guest houses etc. which use the signals for the benefit of their customers, clients, members or other permitted visitors to the establishment. a) In the Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order, 2004 (6 of 2004), under clause 2 the following shall be substituted for the existing clause (f) (f) Charges means (i) for all others except commercial cable subscribers, the rates (excluding taxes) payable by one party to the other by virtue of the written/oral agreement prevalent on 26th December The principle applicable in the written/oral agreement prevalent on 26th December 2003, should be applied for determining the scope of the term rates (ii) for commercial cable subscribers, the rates ( excluding taxes) payable by one party to the other by virtue of the written/oral agreement prevalent on 1st March The principle applicable in the written/oral agreement prevalent on1st March 2006, should be applied for determining the scope of the term rates 3. In clause 3 of the Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004, (6 of 2004), the existing subclause (a) and the entries relating thereto shall be substituted with the following: - (a) Ordinary cable subscribers to cable operator. 4. In the Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004, (6 of 2004), after the existing clause 3 and the entries relating thereto, the following clause and the entries relating thereto shall be inserted as clause 3A: 3A: the charges, excluding taxes, payable by commercial cable subscribers to cable operators, Multi system Operators or Broadcasters as the case may be, prevalent as on 1st March 2006 shall be the ceiling with respect to both free to air and pay channels. Provided that if any new pay channel(s) that is/are introduced after or any channel(s) that was/were free to air channel on is/are converted to pay channel(s) subsequently, then the ceiling referred to as above can be exceeded, but only if the new channel(s) are provided on a stand alone basis, either individually or as part of new, separate bouquet(s) and the new channel(s) is/are not included in the bouquet being provided on by a particular broadcaster. The extent to which the ceilings referred to above can be exceeded would be limited to the rates for the new 524

33 channels. For the new pay channel(s) as well as the channel(s) that were free to air as on and have subsequently converted to pay channel(s) the rates must be similar to the rates of similar channels as on Provided further that in case a broadcaster or multi system operator or a cable operator reduces the number of pay channels that were being shown on , the ceiling charge shall be reduced taking into account the rates of similar channels as on as on Explanatory Memorandum: This Order contains as Explanatory Memorandum attached as Annex A. By Order Rakesh Kacker ACTING SECRETARY-CUM ADVISOR(B&CS) 525

34 Annex A EXPLANATORY MEMORANDUM A batch of petitions was filed by a couple of Associations of Hotels and Restaurants against leading broadcasters in Telecom Disputes Settlement and Appellate Tribunal. The dispute basically pertained to the fact whether the hotels and restaurants can be equated with domestic consumers for the provision of cable TV service and there were also other connected and consequential issues under adjudication. The Hon ble TDSAT while adjudicating on the issues of dispute in its judgment dated 17th January, 2006 in Petition No. 32(C) of 2005 (M.A.No.84 of 2005) and Petition No.80(C) of 2005 (M.A.No.239 of 2005) in the light of the provisions of Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order, 2004 (6 of 2004) had observed interalia as under: 36..We have already concluded that the members of the petitioner associations cannot be regarded as subscribers or consumers. As such we are of the view that the above tariff notification of the TRAI would not be applicable. It seems that TRAI has found it necessary to fix the tariff for domestic purpose. We think the Regulator should also consider whether it is necessary or not to fix the tariff for commercial purposes in order to bring about greater degree of clarity and to avoid any conflicts and disputes arising in this regard. 37. In view of the above, we are of the opinion that the respondents are well within their rights to demand members of the petitioner associations to enter into agreements with them or their representatives for receipt of signals for actual use of their guests or clients on reasonable terms and conditions and in accordance with the regulations framed in this regard by TRAI 2. TRAI had also received a representation from the Federation of Hotel and Restaurant Associations of India (FHRAI) in which they had interalia requested: i) TRAI to fix Tariffs for hotels as per normal procedure (i.e) after giving appropriate opportunity to the affected persons including hotels and restaurants to represent against the proposed Tariffs. ii) TRAI to issue a restraining order on the broadcasters stating that they (broadcasters) may not charge arbitrary rates fixed for hotels and restaurants till the regulations are framed by TRAI. 3. The Authority considered the observations made by the Hon ble TDSAT and the representation of FHRAI in the context of the judgment of the Hon ble Tribunal. The issue of need or otherwise to fix tariff for commercial purpose and the method and manner of 526

35 fixing specific commercial tariff are connected issues and needs a detailed consultation and examination. The Authority is considering the course of action on this separately. 4. In the meanwhile keeping in view the observations of Hon ble TDSAT and the representation of FHRAI, the Authority has considered appropriate, in the interim, to extend the protection of ceiling to the commercial consumers as well. This protection in respect of Commercial Cable Subscriber will however be available at the level of the rates prevailing on 1st March 2006 unlike in the case of noncommercial consumer. To give effect to this, the words Ordinary Cable Subscriber, Commercial Cable Subscriber has been defined and the definition of charges has been amended and new clause to give effect to the relevant date for determining the ceiling in respect of commercial cable subscriber has been introduced. 5. The proposed amendment is intended to be a short-term measure and would be reviewed on the basis of detailed examination as indicated in para