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Apex court orders new tariff formula for DTH operators - Sathish - 04-29-2011

In a move that will ensure that the cost of cable channels will continue to remain affordable for consumers even after shifting from analogue to digital services, the Supreme Court last week ordered a new tariff formula for all digital addressable platforms.

The apex court has fixed 42 per cent of non-CAS tariffs as the new benchmark for all future commercial agreements between broadcasters, direct-to-home (DTH) firms and MSOs offering digital cable services. This formula will now replace the earlier tariff orders (35 per cent by Trai in July 2010 and 50 per cent by TDSAT in July 2006).

Simply put, this means that DTH, digital cable, and IPTV operators will only pay the broadcasters up to 42 per cent of the tariff fixed in the analogue cable market (non-addressable and un-regulated). This is important because the government has recently oulined December 31, 2014 as the cut-off date for shifting to digital and addressable cable services.

Experts said the new order will not have much impact on the DTH operators as most of them have signed long-term commercial deals with the broadcasters. However, this will help the MSOs get into agreements with broadcasters under a well-defined commercial formula.

The apex court gave the interim-order while hearing a plea of the Telecom Regulatory Authority of India (Trai). The broadcast regulator had gone to SC challenging a TDSAT judgement of December 2010 which had set aside its 35 per cent tariff order for DTH platform. The Trai’s 35 per cent tariff formula was opposed by most broadcasters.

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