Breaking the rule or switching subscribers: what’s behind TRAI broadcasters’ fight for OTT?

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The Telecom Regulatory Authority of India (TRAI) and TV broadcasters are once again on a collision course. This time the issue is the broadcast of linear channels over the top (OTT) and whether the broadcasters breached clause 5.6 of the government’s downlink guidelines. The two sides are already embroiled in a long-running legal fight over the New Tariff Order (NTO) 2.0, which imposed new restrictions on channel bundling.

The first salvo on the OTT issue was launched by TRAI in April 2021 when it asked broadcasters like Star India, Zee Entertainment, Sony Pictures Networks India, Viacom18 and Sun TV Network to be clear on the issue of supply from linear channels to their in-house and third-party OTT platforms. Without disclosing the identity of the complainants, TRAI had said it had received complaints that this act by the broadcasters violates clause 5.6 of the downlink guidelines.

In their response, the broadcasters argued that they have the right to monetize content across multiple platforms under Section 37 of the Copyright Act, also known as the broadcast reproduction right. . They further argued that OTT platforms are not subject to any licensing terms under the law. OTT platforms, it was argued, fall outside the scope of the TRAI Law, the Interconnection Regulation and the Downlink Guidelines.

Abhishek Malhotra, managing partner of TMT Law Practice, which represents Sun and Sony in the case, said TRAI exceeded its jurisdiction. “In our appeal, we made it very clear that they don’t have jurisdiction. They said so. It’s beyond their jurisdiction. OTT is a different mechanism for delivering content,” he noted. However, a TRAI official requested anonymity and said broadcasters should have no fear if they are not breaking any laws. “We just asked broadcasters to provide the architecture and if it violates any law. What’s the harm in sharing that information if they don’t violate any laws?” asks the official.

On the issue of jurisdiction, the official said TRAI believes it has the power to regulate OTT, but does not exercise that power “at this time”. “We believe we have the power to review OTT. However, we have consciously decided not to regulate it at this time,” the official said.

It is pertinent to note that the regulator recently told the Association of Digital Cable TV Operators of Tamil Nadu that the tariff orders issued by it do not apply to OTT platforms since the MIB does not grant no permission/license to OTT platforms. The association had issued a legal notice to the regulator to instruct pay-TV broadcasters against price inflation for TV channels.

Experts believe that the genesis of the problem lies in the migration of subscribers from linear services to OTT services. Distribution Platform Operators (DPOs) have asked TRAI to provide parity between OTT and traditional distribution services like cable TV, direct-to-home (DTH) and head-end in the sky (HITS ).

“TRAI must look at the issue of OTT regulation dispassionately and not just based on complaints from DPOs. If TRAI looks at complaints on the merits, it will expose the vested interests of DPOs. the convenience of viewing and the differentiated content they offer. Instead of seeking regulation for OTT, DPOs need to review their business models and fight for light regulation of their verticals,” said an observer from industry.

He further stated that OTT is in a growth phase, therefore, TRAI should not regulate it for regulatory reasons. “Instead, the regulator should free linear broadcasting from price caps and regulatory burdens. This is the only way for linear broadcasters to compete with OTT platforms. It will also give consumers the freedom and choice to opt for what they want – linear delivery or OTT or DPOs like Tata Sky have started bundling OTT services, why aren’t other DPOs taking advantage of the technology and the new business models that result,” said he added.

The industry watcher also alleged that the regulator had two different criteria for telecommunications and broadcasting. “TRAI believes in net neutrality but not network neutrality. In 2017, TRAI stated that voice OTT platforms should not be regulated because they are delivered via IP-based networks. So the same logic should not be applied to OTT video services? Doesn’t TRAI’s search for information from broadcasters raise suspicions that TRAI is once again finding tricks to trip up an industry emerging that has created a meaningful platform for the creative industry and to deliver differentiated content to subscribers at an affordable price,” he said.

A seasoned executive, who has extensive experience in the cable industry, said DPOs feel they are over-regulated while OTT is virtually unregulated. “TRAI said they will not regulate OTT so how can they regulate what is offered on these platforms. DPOs are over-regulated while OTT prices are unregulated so this fight will continue “When DTH was launched, cable companies had a problem with DTH operators. It’s a very complicated business and every segment of broadcasting has its challenges,” he claimed.

The confrontation over the issue began in April 2021 when TRAI questioned broadcasters about the provision of linear channels to their internal and third-party OTT platforms, saying it had received complaints that this act by the broadcasters violated clause 5.6 downlink directives.

Clause 5.6 of the downlink guidelines states that the applicant company (broadcasters) shall supply satellite TV channel signal reception decoders only to licensed platforms such as Multi-System Operators (MSO), direct-to-home (DTH) broadcast, internet protocol television (IPTV) or in-the-sky (HITS) head-end service providers.

In their response, the broadcasters indicated that they have the right to monetize content through multiple platforms under Section 37 of the Copyright Act and that OTT platforms are not subject to any licensing conditions. under the law. They also claimed that TRAI has no jurisdiction over OTT platforms.

Subsequently, TRAI issued another letter in July 2021 in which it asked broadcasters to provide a detailed architecture indicating which medium (satellite, fiber or any other medium) is used to deliver linear channel content to OTT platforms. The broadcasters rejected TRAI’s claim saying OTT is regulated by the Ministry of Information and Broadcasting (MIB) for content and the Ministry of Electronics and Information Technology (MeitY) for the technical aspect.

Matters came to a head when the TRAI issued an order dated November 25, 2021 requiring broadcasters to provide information about the streaming of linear channels on OTT platforms or face prosecution under the provisions of the TRAI Act. This prompted a section of broadcasters like Star, Sony and Sun to challenge TRAI’s order in the Telecommunications Dispute Settlement and Appeals Tribunal (TDSAT).

TDSAT while admitting the motions granted TRAI three weeks to file an answer/short answer on the jurisdictional issue raised by the broadcasters based on the content of the new tariff order and TRAI’s recommendations of 14.9.2020 on the framework regulation of OTT communication services.

Although the case is still pending, the court found merit in the argument that OTT services go beyond current laws and regulations. “Based on TRAI’s position in the two documents noted above, it appears at this point that there is some merit in the assertion that OTT services go beyond applicable laws and regulations. currently, which are the words used by TRAI itself in the recommendations of 14.9.2014. Therefore, until the next date, no enforcement action will be taken against the appellant on the basis of the disputed letter from TRAI dated of 25.11.2021,” the TDSAT order reads.

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