Broadcasters to get bigger role in DPO audits as TRAI pushes for trust building
TRAI’s analysis reveals that the earlier deterrent has not been effective, as “many distributors are still not getting their system audited in a time-bound manner,” despite repeated nudges from the Authority and the Ministry of Information and Broadcasting (MIB).
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The Telecom Regulatory Authority of India (TRAI) has rolled out draft of the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Seventh Amendment) Regulations, 2025 strengthening audit framework for distributors of television channels (DPOs), stressing that many operators are still failing to get their systems audited in a time-bound manner despite clear regulatory mandates and the threat of financial disincentives.
To enforce compliance, TRAI has tightened penalties on distributors who fail to conduct audits within the prescribed timeline. Under the proposed regime, defaulters will face financial disincentives of ₹1,000 per day for delays of up to 30 days, and ₹2,000 per day for longer delays, capped at ₹2 lakh per year. Broadcasters will also be empowered to disconnect signals of distributors if audit findings reveal serious non-compliance with the regulatory requirements.
TRAI’s analysis reveals that the earlier deterrent has not been effective, as “many distributors are still not getting their system audited in a time-bound manner,” despite repeated nudges from the Authority and the Ministry of Information and Broadcasting (MIB).
According to TRAI, system audits are essential to verify accurate subscription reports, which are the foundation for revenue settlement between broadcasters and distributors. Inaccurate or unverifiable data risks disputes over underreporting, erodes trust, and undermines contractual settlements.
“Audit of systems is a tool to verify the correctness of data and system specifications as per regulatory requirements. Moreover, it acts as a confidence-building measure across the value chain,” the regulator noted.
By mandating a single annual audit by a DPO, TRAI also aims to prevent multiple audits by different broadcasters at different times, which have historically burdened both operators and broadcasters.
Recognizing the financial and manpower limitations of small operators, TRAI has proposed that DPOs with fewer than 30,000 active subscribers may be exempted from mandatory annual audits. These operators will, however, be encouraged to conduct voluntary audits.
TRAI highlighted that smaller players have repeatedly flagged audit fees as disproportionate to their revenues. Several Multi System Operators (MSOs) had even requested exemptions from the MIB on these grounds. The new exemption, the regulator said, “is in line with promoting ease of doing business and reducing regulatory burden.”
The 30,000-subscriber threshold will be reviewed periodically.
Another significant change is the alignment of audits with India’s financial year cycle (April–March), replacing the current calendar year mandate. Stakeholders argued that aligning audits with financial reporting would eliminate mismatches in contracts and taxation practices.
Accepting the demand, TRAI has mandated that audit reports for a given financial year must be shared with all broadcasters by 30th September of the following financial year. This shift, TRAI said, ensures consistency with agreements, taxation, and statutory financial audits.
Going forward, DPOs must notify broadcasters at least 30 days in advance about the audit schedule and the selected auditor. Broadcasters will be allowed to depute one representative during the audit to share inputs and verify findings.
To guarantee independence, auditors must furnish a certificate affirming their impartiality and compliance with regulations.
Dispute Resolution Framework
Where discrepancies are found in subscriber numbers or system compliance:
Broadcasters may flag issues within 30 days of receiving the audit report, supported with evidence.
The original auditor must review and issue an updated report within 30 days.
If concerns remain unresolved, broadcasters may escalate the matter to TRAI, which may permit a special audit at the broadcaster’s cost through empanelled auditors.
Discrepancies in subscriber numbers will be settled through contractual provisions, while violations of addressability standards may empower broadcasters to disconnect signals after due notice.
Piracy and Watermarking
On piracy control, TRAI reaffirmed that all pay channels must carry watermarking network logos at the encoder end. However, in cases where encoders are shared by multiple DPOs, multiple logos could clutter the TV screen. To safeguard viewer experience, TRAI has limited on-screen logos to a maximum of two: one from the broadcaster and one from the last-mile distributor.
TRAI also addressed infrastructure sharing concerns, directing that systems like SMS (Subscriber Management System), CAS (Conditional Access System), and DRM (Digital Rights Management) must maintain independent instances for each distributor. Logs must be retained for at least two years, ensuring clean segregation and entity-wise reconciliation.
The updated audit provisions, watermarking rules, and infrastructure-sharing requirements have been incorporated into the amended regulations. TRAI said it will continue to monitor market developments and consider further interventions as needed.
“The integrity of subscription reporting is fundamental for transparent revenue sharing between broadcasters and distributors. Ensuring time-bound, verifiable audits is critical to maintaining trust in the broadcasting ecosystem,” TRAI emphasized.
The draft has been placed for public consultation, and TRAI has invited written comments from stakeholders by October 6, 2025. The regulations are scheduled to come into effect from April 1, 2026.
