Indian Regulatory Focus
In the second half of 2007, the Telecom Regulatory Authority of India (TRAI) has issued a batch of consultations and regulations that affect the burgeoning satellite broadcasting industry in India.
A big burst of activity took place in August and September, as the regulator described comments it received on regulating the headend in the sky concept, issued a position paper to initiate a consultation on Internet Protocol TV (IPTV) and another on mobile TV, and adopted a regulation on direct-to-home (DTH) quality of service.
About 270 television channels are available on cable and satellite television networks in India, and regulation typically is strongly protectionist for broadcasting and the satellite sector in general — subject to strict foreign investment limits and marked by heavy regulation. There are two DTH operators serving an estimated 3.2 million subscribers in India, and several other licensees recently have been authorized to operate, but these market is small when compared to the nearly 70 million cable subscribers.
Specific rules on satellite DTH service come into effect in December. The regulations establish a web of requirements with exquisite detail and come at a time that the Indian government is also discussing a new broadcasting bill that could offer the potential for government intrusion into many elements of editorial freedom.
The new rules require DTH operators to offer subscribers three options for set-top boxes — outright purchase, hire-for-purchase or rental. A time limit of five days is set for disconnecting or reconnecting subscribers. Subscription price packages offered to a subscriber cannot be changed for six months.
Mandatory DTH call centers must respond in specific times (80 percent of calls to be answered within 20 seconds electronically or within 60 seconds by a live operator). In addition to the call center, DTH operators must designate an individual, dubbed a nodal officer, in each Indian state in which service is provided to handle subscriber grievances. Nodal officers have precisely 10 days to resolve or redress all complaints.
And of course there is a substantial requirement for record keeping, inspection and audit connected with this raft of rules. The DTH rules in some respects are said to be light by comparison to Indian cable rules.
For cable conditional access services necessary to offer pay channels, TRAI has specified tariff packages and pricing, as well as what TRAI calls “stringent conditions” for activating connections. By contrast, TRAI says the DTH rules are a “mix of self-regulation and light-touch regulation.”
The larger issue that will affect DTH and all other providers of broadcast signals is a Broadcasting Services Regulation bill that may be reviewed by the Indian parliament toward the end of this year. The bill would set out a comprehensive policy on broadcasting to be carried out through a new Broadcasting Regulatory Authority of India. A new independent content code also would be set up.
Broadcasters in India have complained that the new rules could allow excessive intrusion by the government into content decisions — already the government applies current rules to regulate content it does not like. The code has been called an “agenda to control free speech,” and the proposal has remained controversial since release of the draft bill.
Similar bills have been considered in the last year and not formally brought forward. It is uncertain whether this bill will go forward either due to controversial aspects that have worried commenting parties.
It is too early to know what approach TRAI might take with the headend in the sky concept, which is unique to satellite services. It also will be interesting to see how the regulator adopts current regulations to new concepts such as mobile TV.
In its IPTV position paper, TRAI noted it seeks “to ensure that unregulated content are not shown by IPTV operators.” But the quality of service rules that TRAI applied to DTH confirm a focus on regulatory minutia and government control.
This emerging regulatory picture is not what we would call “light touch,” but the DTH subscriber base nevertheless is one of the fastest growing in the world. With an expanding middle class in a population of over a billion, India offers a growth market to satellite broadcasting no matter what the regulators do.