Broadcasters cry foul over TRAI order

New Delhi: Broadcasters on Thursday said that TRAI's order of a Rs 5 ceiling on pay channels an "unjustified intervention".

They also indicated that they were "exploring legal option" to stall its implementation.

"This is an arbitrary action by TRAI and we are open to all kinds of options to challenge the move, including legal," ESPN-Star Sports India Managing Director R C Venkateish said.

He accused the regulator of "discriminating against the broadcasters" and said the move could result in quality of content on TV channels going down.

"How can you expect the broadcasters to put in money for procuring high-quality programming when the rates realised from the market will go down so much. It will have a dramatic effect on content quality," he said.

Speaking in favour of consumers, TRAI announced a Rs 5 ceiling on monthly prices of individual pay channels in CAS areas, rejecting demands by broadcasters for higher rates and saying price regulation is justified when markets fail to produce competitive prices.

The Indian Broadcasting Foundation, a grouping of major broadcasters operating in the country, will debate the issue later this week.

"It is a serious issue and the IBF will discuss it in order to thrash out the future course of action," a senior official with a major broadcaster said, on condition of anonymity.

Justifying fixing of an MRP on channel pricing, TRAI said it was being done as the prices quoted by the broadcasters were "too high".

"On an analysis of the prices of these pay channels, the Authority has arrived at the conclusion that there is a need to fix a ceiling on maximum retail price for the pay channels," it said.

TRAI said the "temporary intervention" by it would maximise the subscribers' interest. "If fixation of prices of individual channels was left to market forces, then there is a possibility that CAS implementation may not be beneficial to subscribers," it added.

It said price regulation was justified when markets failed to produce competitive prices.

However, if taken in entirety, TRAI's latest order is not going to make a major dent on earnings of broadcasters as almost 70 per cent of their revenues come from ads.

Even in the 30 per cent revenues that come subscriptions, more than 90 per cent come from non-CAS areas where the rates are different.