THE GIST of Editorial for UPSC Exams : 05 September 2019 (Trai’s attempt to review tariffs raises concerns (Mint))

Trai’s attempt to review tariffs raises concerns (Mint)

Mains Paper 3: Economy
Prelims level: TRAI
Mains level: TRAI NTO on channel subscription

Context

  • Discovery Communications filed a writ petition in the Delhi High Court against TRAI’s new consultation paper on tariffs regarding broadcasting and cable services.

Background

  • It seeks a stay on the consultation paper saying that it lacks objectivity, transparency and fairness of approach.
  • Discovery argues the consultation paper is based on the assumption that television broadcasters are responsible for manipulating and distorting pricing of channels, thereby affecting consumer choice.
  • TRAI is attempting to review the six-month-old new tariff order (NTO), which allowed consumers to choose their channel on an à la carte basis with broadcasters having to declare the maximum price of each channel separately.
  • Several research studies found that instead of lowering the monthly cable and DTH bills for the consumers as was intended, the new framework led to an increase in monthly charges.
  • Several broadcasters raised concerns about the new consultation paper. They say that the Trai’s move favours the distribution platform operators (DPOs) such as cable and DTH services.
  • They feel that under the new tariff order the distribution platforms have gained the most as they get a fixed network capacity fee (NCF) of ₹130 for 100 standard definition (SD) channels and ₹20 for the next slab of 25 SD channels.
  • The new consultation seeks to review broadcasters’ bouquets to check misuse of flexibility in pricing.
  • By regulating the channel pricing, it is not allowing broadcasters to monetize their IPR
  • Trai assumes that à la carte is the preferred choice among consumers, although it offers no research by way of evidence.

Broadcasting in India

  • Broadcasting in India has always been a standoff between broadcasters and DPOs, and the DPOs have always been winning.
  • Trai, as well as the ministry of information and broadcasting, have always seen their role as controlling broadcasters, never the DPOs.
  • DPOs have other advantages, too. If you have to be part of the first 100 free-to-air (FTA) channel bouquet of a DPO, you have to pay a carriage fee.
  • Also, they are pushing their own bouquets onto the consumers.
  • At present no distributor platform has the capability to offer complete à la carte channel choice involving various permutations and combinations for each and every consumer.
  • The new tariff order robs a consumer of his chance to discover new content as he was getting many channels for a very low monthly fee
  • The new tariff order and the new consultation paper may kill the smaller channels. There is nothing wrong if weaker channels piggyback on stronger ones.

Conclusion

Prelims Questions:

Q.1) World’s first-ever thermal battery plant was inaugurated in?
a) Bihar
b) Madhya Pradesh
c) Gujarat
d) Andhra Pradesh

Answer: D
Mains Questions:
Q.1) What extent the new tariff order may kill the linear TV industry, especially the small channels?

UPSC 2019
Civil Services EXAM
Civil Services Preliminary
Civil Services Mains
IAS PRE GS
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