TRAI's new paper on cable TV monopoly gets divided response

When Rahul Khullar, chairman, Telecom Regulatory Authority of India (Trai), presented the Authority’s new consultation paper on monopoly and market dominance in cable TV services at the BSNL’s head office here on Tuesday, he found himself faced with a divided audience.

While many consumers in the audience felt a need for regulation, the many multi-system operators and cable operators argued against regulation and expressed the opinion that there is no monopoly in cable TV services.

Trai’s paper was floated for public opinion on June 3, after the Authority had worked out details on how to regulate the digitised cable TV market based on a reference (dated December 12, 2012) from the Ministry of Information and Broadcasting. The ministry had observed that there is fear of a monopoly in some states, which could affect customers.

Multi-system operator

According to the paper, there is a single multi-system operator who enjoys an 80 per cent market share in states like Tamil Nadu, Andhra Pradesh, Punjab and Chandigarh — which is being felt as inappropriate given the perceived effects on the consumer. The paper, which took the case of Tamil Nadu, recommended that the Central and state governments (and all ministries) not be allowed to enter the business of broadcasting or/and distribution of TV channels. But, by and large, however, the discussion revolved around ways to measure monopoly.

Formula

According to Khullar, Trai is trying to formulate an appropriate scale of measurement to help it determine if a company has a monopoly, and also to help ensure that a multi-system operator does not achieve a majority of the market share in his area.
“If there are more than four multi-system operators in a region, for example, there is healthy competition and we do not care to bring in regulations,” Khuller explained but quickly added that this is not the scenario in some states. “There is also the issue of mergers and acquisitions between multi-system operators and how this could contribute to the creation of a monopoly,” he said.

Representatives from the Consumer Care Forum, various multi-system operators, and the Cable Operating Association, participated in the event. Anil Malhotra, a representative from ACT (a multi-system operator), argued that the fear of monopoly arises only when there was “political intervention.” A representative from Asianet, a channel, meantime argued that there was no possibility of a monopoly.

Another stakeholder argued that the introduction of regulations will hinder investments, and eventually affect services as cable TV is a high-investment sector.