The salient features of the recommendations
are:
(i)
State to be the relevant market for assessing monopoly/ market dominance
of Multi
System Operators
(MSOs) in the TV channel distribution market;
(ii)
Market dominance to be determined on the basis of market share in terms
of the number of active subscribers of MSOs in the relevant market;
(iii)
Herfindahl– Hirschman Index (HHI) to be used for measuring the level of
competition or market concentration in a relevant market;
(iv)
A new definition of control is prescribed covering both de jure and de
facto control;
(v)
Prior approval of the regulator to be taken for any Merger &
Acquisition (M&A) among MSO(s) or between an MSO and Local Cable
Operator (LCO) in a relevant market
and for any arrangement that results in ‘control’ of MSO(s)/ LCO(s) in a
relevant market by an entity. The decision on the proposals to be conveyed by
the regulator within 90 working days.
(vi)
Rules for M&A and acquisition of control among MSO(s) or between an
MSO and LCO in the relevant market have been prescribed. The Rules provide as
follows;
1.Post-M&A/acquisition of control, the contribution
of resultant entity to the market HHI does not exceed 2500, and
2.Depending on the
value of the post-M&A/acquisition of control
market HHI, any one of the following conditions are met:
i.
either
the post-M&A/acquisition
of control
HHI of that market is less than 2000, or
ii.
in
cases where the post-M&A/acquisition of control
market HHI is between 2000 and 3300, the proposed M&A/acquisition of control does not result
in an increase in market HHI (delta) by more than 250 points, or
iii.
in
cases where the post-M&A/acquisition of control
market HHI is beyond 3300, the proposed M&A/acquisition of control does not result
in an increase in market HHI (delta) by more than 100 points.
(vii)
A time of 12 months is given to group(s), contributing more than 2500 to
market HHI of a relevant market, to limit its ‘control’ in various
MSO(s)/LCO(s) in such a way that the contribution to market HHI of that ‘group’
reduces to less than or equal to 2500;
(viii)
An
MSO, contributing to more than 2500 HHI by itself in a relevant market, not to
be permitted to merge with or acquire the ‘control’ of any other MSO/ LCO in
that relevant market;
(ix)
Disclosure
and reporting requirements for effective monitoring and enforcing compliance of
the rules have been prescribed.
The Ministry of Information
and Broadcasting (MIB) requested TRAI to
provide its recommendations on restrictions to be imposed on MSOs/ LCOs to prevent
monopolies/accumulation of interest in order to ensure fair competition,
improved quality of service, and equity.
TRAI issued a consultation
paper on “Monopoly/ Market dominance in Cable TV services” on 3rd
June 2013 seeking comments from the stakeholders on issues related to monopoly/
market dominance in the cable TV services. Open House Discussions were held at Bangalore on 16th July
2013. Taking into account the comments received during the consultation process
and analysis of the issues, the Authority has finalised its recommendations.
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KKP
(Release ID :100887)
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