‘Smaller DPOs misrepresent their subscriber base’, says Harit Nagpal, MD and CEO, Tata Play to TRAI

The Telecom Regulatory Authority of India (TRAI) has received 55 responses to its consultation paper on audit-related provisions of the Interconnection Regulations, 2017, and the Digital Addressable Systems Audit Manual. In its response to TRAI, Tata Play expressed concerns about the financial strain DTH (Direct-to-Home) platforms face due to high license fees, with no relief granted despite multiple valid appeals to the government.

In its response to TRAI, Harit Nagpal, Managing Director and CEO of Tata Play, highlighted that Distribution Platform Operators (DPOs) are already struggling because of a regulatory environment that favors OTT platforms and broadcasters. Tata Play supports maintaining clause 15.1 of the Interconnection Regulations, 2017, which requires television channel distributors to have their systems audited annually.

Storyboard18 had first reported about the clash of broadcasters and DPOs as TRAI received mixed feedback on its consultation paper released on August 9. Divided industry voices further are likely to create challenges for TRAI to frame a robust regulatory framework for the broadcasting sector.

In response to TRAI’s question about whether smaller DPOs should be exempt from the audit, Nagpal emphasized the need for uniform compliance, stating, , “The small DPOs should be liable for compliance in the same manner as other DPOs since the TRAI regulations cannot be made selectively applicable. The larger operators have transparent Conditional Access Systems (CAS) and (Subscriber Management System), it is the smaller DPOs that misrepresent their subscriber base.”

Tata Play argued that the tariff structure and other regulations apply to all entities, regardless of size, and there should be no differentiation in audit requirements. "All operators, big or small, must undergo audits in the same manner," the company stated.

Tata Play has also requested the removal of financial penalties provided under Regulation 15 (1A), which allows for fines of up to rupees two lakhs noted, Nagpal said, “Despite providing the same service of delivering content to end consumers, DTH platforms are the only entity that is burdened with License Fee. Other measures apart from financial disincentives should be brought out so that the DPOs can survive in the industry where they are already facing heavy pecuniary losses.”

Interestingly, Tata Play has also asked TRAI to remove Clause 15 (2) of the Interconnection Regulations, 2017, which allows for broadcaster-initiated audits of DPOs. Nagpal argued that TRAI is the regulatory authority for DPOs, and thus, only TRAI-mandated audits should be conducted.

He added, “Through the year the broadcasters do not object to the reports submitted to them, however, towards the end of the year, when there is no concurrence on commercial terms, they bring up the need to audit, with obtuse questions to victimise the DPOs with their threat. This unbound power given to the broadcasters need to be removed to bring a balance in the eco-system.”

Nagpal stressed that dual audits are unnecessary and that TRAI-mandated audits should be final. Broadcasters should not have the right to audit DPOs, as this duplication only increases costs and burdens DPOs further.