Even as it contemplates restrictions on cross-media ownership to ensure ‘plurality of viewpoints’, the Telecom Regulatory Authority of India (TRAI) has initiated a process to tackle what it sees as unhealthy market dominance in distribution platforms of the broadcasting universe.
Last December, the Ministry of Information and Broadcasting (I&B) asked TRAI whether ‘in order to ensure fair competition, improved quality of service, and equity’, restrictions ought to be imposed on Multi-System Operators and Local Cable Operators to prevent monopolies. There are currently no restrictions on MSOs and LCOs either in the area of operation or their accumulation of market share.
Market dominance
According to data at the end of 2012, cable TV subscribers comprise 9.4 crore out of a total 15.5 crore of Indian television households, while the rest are Direct-to-Home (DTH) households. There are approximately 6,000 MSOs and 60,000 cable operators. With digitisation, MSOs have become the key link in the distribution of both free-to-air and pay channels.
This week, TRAI issued a consultation paper, which points to the dominance of a single MSO in certain markets like Tamil Nadu, Punjab, Orissa, Kerala, Uttar Pradesh and Punjab. In some cities, an MSO controls as much as 80 percent of the digital television market.
Blocking content
TRAI found that MSOs have ‘misused their market power’ to create barriers of entry for newer players. Large MSOs can secure content at lower prices and charge higher carriage and placement fee from broadcasters. They can then offer better revenue share to the local cable operators, which incentivises them to move away from the smaller MSOs. They have also sought to expand their influence and size by buying out smaller MSOs and cable operators.
The paper suggests that once an MSO has such dominance, they can make it difficult for broadcasters to have access to distribution networks for carrying content to consumers. “Blocking content selectively can also become an obstacle to promoting plurality of viewpoints.” In 2011, the Competition Commission of India (CCI) had imposed a penalty on an MSO in Punjab, which was found to be abusing its market dominance to deny market access to a broadcaster.
TRAI has invited suggestions on possible methods to measure market dominance; whether restrictions to reduce concentration ought to be based on geography or market share; whether it should be applied retrospectively and the time-frame that should be given to existing distributors to abide by the restrictions; and the monitoring and disclosure arrangement.
Industry analysts see TRAI’s latest effort in conjunction with its efforts to restrict cross-media ownership. While some feel this is a way to exercise greater ‘state control’ and will stifle sectoral growth, others have emphasised this is necessary and timely to check monopolistic practices and ‘vested political and corporate interests’ driving the industry.
