TRAI wants to pull the plug on ESPN

The Telecom Regulatory Authority of India is recommending the cancellation of sports broadcaster ESPN STAR Sports' downlinking licence for non-compliance with the DTH platform's pricing formula.

TRAI's proposed action follows its direction and a show cause notice to ESPN Software India in the last two months asking it to fall in line with its DTH pricing formula.

According to TRAI's norms, all pay-channel broadcasters have to price their channels (or bouquets) at half the price they charge to cable operators, which have a wider user base.

TRAI's formula stems from a TDSAT order of July 2006.

This means that ESPN's bouquet of three channels (ESPN, Star Sports and Star Cricket) have to be priced at Rs 22 or less on the DTH platforms as it charges cable operators Rs 44.17 for the same bouquet. According to TRAI, except ESPN, all other broadcasters have reduced their bouquet rates on the DTH platform in line with its guildelines. 

"We are preparing the chargesheet for prosecution against ESPN Software India. Also, we are writing to the Ministry of Information and Broadcasting recommending them to cancel their downlinking licence over non-conformation to the DTH pricing," a senior TRAI official said. A final decision, however, in such an issue is taken by the ministry.

When contacted, R C Venkateish, managing director, ESPN India, said, "I cannot offer any comments in the matter till I actually hear from TRAI."

In the show cause notice sent to ESPN on July 22, TRAI asked the sports broadcaster to modify its DTH reference interconnect offer according to TRAI guidelines, offer the same bouquet of channels to DTH operators as it gives to cable operators and reduce the rates for its bouquet (or individual channels) to half the cable rates.

According to sources, ESPN submitted its reply to the show cause notice on July 30. In its reply, ESPN made a case for the high cost of content of its channels and that it would conform to the regulator's guidelines if DTH operators gave its channels the maximum coverage.

"However, any pre-condition in following the pricing formula on DTH platform by the sports broadcaster is unacceptable to TRAI. Therefore, it is supposed to have initiated the neccessary action against the sports channel," an industry source said.

According to an industry expert, TRAI on its own can impose a fine of Rs 2 lakh per day on ESPN for violation of its DTH pricing formula and it will be up to the I&B ministry to take the action of suspending or cancelling the company's downlinking licence.