TRAI releases draft Recommendations on Restructuring of Cable TV Sector

Tuesday, July 15th, 2008
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Today Telecom Regulatory Authority of India (TRAI) issued draft recommendations on “Restructuring of Cable TV Services”.

Indian Cable TV sector has grown rapidly in the past two decades largely due to entrepreneurial skills of the Cable TV operators. The Cable TV transmission in the country is predominantly analogue and limited to provisioning of TV Channels only. However, due to the absence of any licensing and regulatory frame work for the Cable TV sector the growth so far may not be sustainable and could slow down the future development and inclusion of advance services in the network. This may become more critical as there is a fierce competition to the existing conventional Cable TV operators from operators who use advance distribution technologies like DTH, HITS, IPTV etc.

The Cable TV homes in India have risen to 78 million at the end of year 2007. Although the physical spread of Cable TV sector has been significant, the sector in its present form is experiencing challenges of technological upgradation, appropriate addressability and resources. The regulatory framework need to address the issues of transparency, addressability, vertical restructuring, fragmented distribution chain, low digitalisation of TV Networks and technological up-gradation.

There is a scope for growth in the Cable TV sector in view of new technologies available today. The increasing convergence and likely introduction of NGN will require high speed broadband access to subscribers. Cable TV operators can contribute a lot in this direction as it will not only increase broadband penetration but will drastically improve Cable TV operators business model. This will require upgradation of present Cable TV Networks to two-way digital cable network. As the investment opportunities in the sector have also increased, a supportive regulatory environment will facilitate the future growth. The provisions for registration, information system for monitoring of Cable TV industry, customer grievance redressal and Quality of Service etc needs immediate attention.

In order to address the above issues the Authority had suo-motu initiated a consultation process by floating a detailed consultation paper on “Restructuring of Cable TV Services”. Based on the views of the stakeholders, International experience and in-depth internal study these draft recommendations have been evolved. The Authority has kept in view that most of the existing Cable TV operators are not having huge funds and have already invested considerably in their Cable TV Network. Therefore proposed regulatory framework has facilitated migration of existing Cable TV operators and all forms of entry barriers have been discouraged. Emphasis has been laid on long term stable, organized, and supportive licensing framework to encourage innovation and investments in the sector.

The salient features of the Draft Recommendations are:
“¢ Licensing framework in lieu of present registration system.
“¢ Separate licensing framework for Local Cable TV Operators (LCOs) and Multi System Operators (MSOs).
“¢ Rationalization of eligibility criterion.
“¢ Rationalization of choice for service area both for LCOs and MSOs.
“¢ Easy migration arrangement to proposed licensing regime for existing registered Cable TV operators.
“¢ Entry fee has been well defined for different area of operations.
“¢ License has been prescribed for five years with well defined renewal procedures.
“¢ Administrative cess has been introduced for effective data collection and monitoring.
“¢ Framework for Grievance redressal of license seekers.
“¢ Adequate penalty provisions including suspension and termination of license.
“¢ Framework for redressal of Consumers Grievances
“¢ Encouragement of advance transmission technology.
“¢ Provision to enable Right of Way (ROW) to LCOs and MSOs.
“¢ Emphasis on network digitization, addressability and encouragement for voluntary CAS.

It is hoped that these forward looking recommendations will boost orderly growth of the Cable TV services in the country and will also provide new business opportunities to Cable TV operators for reaping the benefits of technological advancements.

Detailed draft recommendations are available on TRAI’s website. Various stakeholders are requested to provide their comments on these draft recommendations to undersigned, on or before 21st July, 2008, preferably in electronic format.

More: Draft Recommendations on Restructuring of Cable TV Sector