The newspapers are flooded with stories about the DTH players (Airtel & Tata) complaining to TRAI about the plans of “JIO Fiber Backup” to offer live TV channels at prices that contravene the TRAI’s Tariff Order which regulates broadcast services. The readers should note that earlier both TRAI and the broadcast industry were at loggerheads over the pricing of broadcast channels. TRAI was driving these rules with the intent of empowering the consumer with the freedom to choose channels at will and by need — than being imposed by the industry through the process of forced bundling. The Broadcasters challenged the TRAI in court but with limited success and therefore were left with no options but to comply (Latest — MRP, & Bouquet of Pay channels offered by Broadcasters).
Now, to me, the current situation (tussle between Airtel vs RJIO) is NOT a surprise, as I saw this coming long back and had written extensively about it in the past. On this note, I plan to explain this complex situation as simply as possible and conclude by laying down some recommendations.
Nothing New, But...
This issue raised by Airtel and Tata is nothing new. Cable operators had raised this in the past before the TRAI. For refreshing the background, I recommend that you read my note dated 16th May 2022, titled — “Broadcasting Sector — Challenges & Opportunities”. To make it easy for the readers, I have extracted a part from this note which will help understand the origin of the dispute (see below).
This clearly shows that the allegations that the broadcasters driving linear TV channels through their own OTT apps are not a new phenomenon, and Airtel (in their complaint to the TRAI) also agrees with this fact. But, the key difference (between now and then) is that earlier it was a battle between the cable operators and the OTT players, and now it is between the two service providers. And this fact is important and will become clear as you read through this note.
TRAI’s Effort
The TRAI did notice this anomaly. They wanted to use clause 5.6 of the MIB’s downlinking guidelines as the regulatory anchor to reign the OTT apps from broadcasting linear TV channels without following its tariff regulations. These downlinking guidelines empowered the broadcasters to provide their content to only — a) MSO/Cable operators; b) DTH operators; c) IPTV operators; or d) HITS Operators. Note that there is no mention of OTT players in the guidelines. Therefore, with an intent to plug this loophole, the TRAI issued a letter to broadcasters (Star, Sony, and others) with a para embedded as under.
“In this regard, you are also requested to provide a detailed architecture indicating which media (satellite, fiber, or any other media) is being used to deliver the content of linear channels to your OTT platform or third-party OTT platform.”
The Broadcasters immediately took the matter to TDSAT, who on 20th Sept 22, decided the matter in favor of the TRAI. But soon after (within a week), the Broadcasters went to the Delhi HC and got a stay in this matter. To date, the matter is still under litigation in the courts. Therefore, TRAI’s attempt to contain the OTT apps from driving linear TV hasn’t been successful yet by traversing through this path.
The Real Issue
An attentive reader might ask the following question. A) Why RJIO is not providing its linear TV services under the IPTV licenses, and instead has chosen OTT as a framework to provide these services (UASL allowed IPTV services)? The answer is simple — a) The IPTV license will require it to follow the TRAI’s NTO, and by using the OTT path, they can easily circumvent those tariff constraints set by the regulator. b) IPTV is a network-managed service, and OTT is a best-effort-based service. Hence the QoS (Quality of Service) for IPTV is governed by Clause 43 of Annexure I of the UL, (reproduced below for easy reference).
“IPTV (Internet Protocol Television) service (or technology) is a convergence service (or technology) of the telecommunications and broadcasting through QoS controlled Broadband Convergence IP Network including wire and wireless for the managed, controlled and secured delivery of a considerable number of multimedia contents such as Video, Audio, data, and applications processed by the platform to a customer via Television, PDA, Cellular, and Mobile TV terminal with STB module or similar device.”
Hence, by choosing the OTT path, RJIO is not obligatory to ensure a network-managed linear TV service following a certain QoS framework. However, even if (RJIO) had chosen to offer these linear TV services under the IPTV license it will still need an explicit QoS framework to be defined by the TRAI, and currently, there are NONE.
To summarize — Under the existing practice the OTT path allows RJIO to circumvent the TRAI’s tariff order and in the absence of any QoS framework on IPTV, RJIO is fully empowered to run its services which (QOS framework) otherwise could have been used as a metric to compare RJIO’s linear TV services with those being offered by their DTH counterparts.
QOS for IPTV
Now let's understand what we mean by QoS for IPTV. Managed IPTV services will need the service provider to prioritize them over normal internet traffic. Else, the packets will get dropped (due to it competing with other internet services). But the key question here is whether the “Net Neutrality” Rules allow a service provider to differentiate IPTV services from normal internet services. Will it not violate the “Net Neutrality Rules” defined by the TRAI?
Fortunately, on 28th Nov 2017, the TRAI came out with a recommendation where it called out certain services as specialized services which are excluded from the principle of “non-discrimination”. Page 20, clause 3.20 of the recommendation is captured below for your ready reference.
Now, since the IPTV services are enabled by the UAS License, isn’t it the responsibility of the TRAI to spell out the QoS parameters for the IPTV services clearly so that these are at par with those offered by their DTH/Cable counterparts? And more so, by doing so, it will also ensure that the OTT player's linear TV services are below this standard so that the level playing field between them and the DTH players is not disturbed.
TRAI’s Options
Based on the above discussion the TRAI has only three options. A) Clearly spell out the QoS guidelines for IPTV services. B) Ensure the QoS of OTT-based linear TV services are not at par with those offered by their counterparts to ensure a level playing framework between the OTT and DTH players. OR C) Unwind the NTO and allow the operators/OTT players to price their linear TV channels with full flexibility with any constraints (best option).
Options A & B will ensure that the linear TV services offered under the OTT platform do not cannibalize the services offered by their DTH counterparts. Hence, the DTH/Cable operators will not be disadvantaged, as both are offering different services. As an example, linear TV on OTT (not VoD as these do not compete with DTH) can be limited to 720p (or any suitable number) and DTH can be empowered with higher reference on quality.
Conclusion
On looking at this issue holistically, one will find that this matter is not as complex and difficult to manage. Ideally, TRAI should not have fiddled with the rates of the TV channels offered by the broadcaster unless there was a visible symptom of market failure. Actually, there were none, as the data point to the fact the consumer bills (outflows) have actually increased after the TRAI’s NTO. Now having traversed so far, it might be difficult for the TRAI to unwind its tariff order. Hence, then the only solution left is to ensure the OTT-based linear TV services (NoT VOD) are below in quality (by setting the QoS framework for IPTV service) those offered by the DTH players. Else (doing nothing) will disturb the “level playing” condition and will set a very bad precedence. And this will not be in India and its consumers.
Also, this incident should be learning to all (the regulator and the licensor), that overly intrusive regulations which are aimed at micromanaging the industry in the name of consumer benefit are shortlived, as soon (due to the evolution of technology) we end up discovering that the rules that are set (even with positive intent) will become redundant and totally unnecessary.
(Views expressed are my own and do not reflect that of my employer)
PS: Find the list of other relevant articles in the embedded link.
