TRAI provides Clarity in the Renewal Process of Multi System Operators

January 11, 2023
Telecom Regulatory Authority India

By Rupin Chopra and Vidhi Oberoi
Telecom Regulatory Authority of India (hereinafter, TRAI) on December 29, 2022 gave new recommendations for the renewal of Multi-System Operators (MSO’s) Registration. The Ministry of Information and Broadcasting (MIB) vide its letter no. N-45001/6/2000- DAS dated February 07, 2022 asked TRAI for their recommendation on the subject. Thereafter, TRAI issued a consultation paper on “Renewal of Multi System Operators Registration” for the suggestions and comments from different stakeholders. The current recommendations are based on the submissions and discussions with the numerous stakeholders.

History of TRAI and MSOs

India’s new economy policy in 90’s (LPG) gave opportunity to a large number of private broadcasters. The trend was already visible in the 1980’s but the new policies allowed a plethora of new broadcasters.

The system was run by Local Cable TV operators (LCOs) which allowed the range from 50-1000 users. The operations by these LCOs were highly unregulated and unsupervised. The decision of the Rajasthan High Court in Shiv Cable TV vs State of Rajasthan[1] paved path for THE CABLE TV ACT, 1995. The legislation laid down the rules and obligations for the broadcasters to protect the interest of subscribers and national interests.

As the number of cable operators and viewers increase, the government felt the inevitable need for independent regulation. Thus, the Parliament passed the Telecom Regulatory Authority of India which came on effect from February 20, 1997 and TRAI came into existence.

The Multi System Operator (MSO) receives signals from different TV broadcasters and they distributed it to LCOs. As per the data there are active 1100 MSO out of 1753 registered MSOs.

Issues related to renewal of MSOs registration:

Earlier, MSO registrations were provided only for specific city, town, state or PAN India. However, from 2017, MSOs were allowed to operate from any part of India. The registration process is done under the rules of THE CABLE TELEVISION NETWORKS (REGULATION) ACT, (hereinafter, CTN Act). 

The Ministry of Information and Broadcasting (MIB) requested TRAI’s recommendations under Section 11(1) (a) (ii) TRAI ACT, 1997 for the following issues in the renewal of MSOs registration:

  1. MIB wanted to know whether a provision relating to renewal of MSO registration and the period should be inserted in the CTN Rules.
  2. Additionally, they wanted to know whether processing fee of Rupees One Lakh should be changed for the renewal for the MSO registration under Rule 11 (a) of CTN Rules, 1994.

TRAI’s Recommendations

  1. TRAI suggested that a period of 10 years should be the standard for the renewal of MSOs. The period runs parallel with the period of security clearance given by Ministry of Home Affairs (1 of the MHA guidelines dated June 25, 2018).                                                                                                                                         Additionally, the renewal period of 10 years gives the networks a stability and allows for long term perspectives for the development of technology for the sector. The period will cover the cost of infrastructure and R&D.
  2. TRAI suggested that MSO incurs a lot of costs in the establishments of infrastructure. Thus, the fees for the renewal should not be too high and will violate the principles of the Government for the Ease of Doing Business. Alternatively, decreasing the fee will allow the entry of non-serious players which is not viable in the industry. Thus, TRAI recommended the fee of Rupees 1 Lakh.
  3. Additional recommendations by TRAI are as follows:
  • The Window period for the renewal should be 2 months before the expiry and 7 months after the expiry date.
  • The renewal of MSOs would expire if not renewed after 8 months from the date of implementation of these rules and guidelines for renewal.
  • The pending applications of MSOs and those MSOs who have not applied should be available in public domain.
  • Extant guidelines for up linking and downlinking of television channels to ensure expired MSOs to access signals.
  • The registration status of MSO shall be cancelled after the expiry date
  • The application process shall be fully digitalized.

Conclusion

TRAI was sympathetic and supportive to the MSOs. The new competition with OTT (Netflix and Hotstar etc.) and Free DTH services has restricted the growth of the industry. TRAI in their consultation paper on “Renewal of Multi System Operators Registration” focused on the problems faced by MSOs. The industry welcomes the changes and proves clarity. The time period and the fees will be a deterrent for irresponsible MSOs. The recommendations if implemented might pave for the revival of industry.

[1] AIR 1993 RAJ 197

Piyush Kumar Singh, Intern at S.S. Rana & Co. has assisted in the research of this article.

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