TV broadcast carriage fees set for a burial (Source: Indian Express Finance and )

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In a move which promises to have a major impact on the cable and broadcast industry, the Telecom Regulatory Authority of India (Trai) is looking to ban carriage fees. While broadcasters-particularly the 240-plus news channels-have supported such a ban for long, the cable industry has always contested Trai's intervention. Trai regulates both telecom and broadcasting sectors in India. If implemented, the move will cut revenues of major cable distributors and DTH operators. However, it will help the TV channels which are currently forced to pay carriage fees to get visibility in the crowded analog cable distribution platforms. Broadcasters say carriage fees account for 60-70% of their annual marketing budgets in the first year of the channel's existence. According to industry estimates, broadcasters pay cable companies around Rs 1,200-1,400 crore annually in lieu of a prominent space on their distribution platforms. Over 90% of carriage fees go to multi-system operators (MSOs) while the rest is charged between the half-dozen DTH operators. Trai has conveyed its intention to ban carriage fees, sources said. "All possibilities are being evaluated to help the cable industry grow as part of the tariff exercise," a Trai official told FE. Large cable operators say the ban is supported only by a section of broadcasters. "A proposal to ban carriage fees was brought up by broadcasters in discussions with Trai. However, Trai is looking at 2013 as a sunset date for a complete shift from analog cable to digital cable. Once that happens, carriage fees will go," said a top executive of a leading cable company. Large operators are opposed to any such ban. Trai, which was asked to outline a new tariff regime for the cable and broadcasting industry by June 30, has sought of 21 days more from a court, sources said. "We are opposed to this. How can it be banned if Trai itself does not know who pays how much in carriage fees? Carriage fees never reach local operators. Trai should look at channeling carriage fees to local operators," said Roop Sharma, president, cable operators federation of India. MSOs have sought a structured debate before Trai takes any step. "When Trai asked broadcasters to disclose details of carriage fees, no one did. Now, they support a ban on carriage fees. This is not acceptable," a senior MSO executive said.