In case the DPO-caused audit mechanism is scrapped, the regulator has asked the stakeholders to suggest mechanisms that should be adopted to ensure timely sharing of monthly subscription reports by the DPOs to the broadcasters.
In its consultation paper, the TRAI noted that many DPOs have failed to audit their SMS in a time-bound manner despite the financial disincentives imposed on them by the regulator.
Broadcasters have been requesting the TRAI to scrap the provision of DPO-caused audits from the regulatory framework while retaining broadcaster-caused audits.
DPOs pay subscription fees to broadcasters based on the SMS reports generated every month. According to the FICCI-EY 2024 report, the broadcasting sector generated Rs 40,000 crore in subscription revenue in 2023.
TRAI has empaneled 52 auditors besides Broadcast Engineering Consultants India Limited (BECIL) for auditing the SMS of the DPOs.The regulator is also seeking responses on whether small DPOs should be subjected to an annual compulsory audit considering the manpower and financial constraints that they face and the criteria that should be adopted to define a small DPO.TV broadcasters have often been at loggerheads with the DPOs over lack of transparency in SMS audits. Recently, Sony Pictures alleged that it had found discrepancies in Tata Play’s SMS, a charge that the latter has denied.
The regulator has also asked stakeholders to suggest whether the financial year should be adopted in place of the calendar year for DPO audits.
Another issue put up for consultation by the TRAI is whether the DPOs should be mandated to complete the annual audit of their SMS by September 30 every year.
If the broadcasters are unsatisfied with the DPO audit, they can cause an audit of the DPO, which must be completed between October 1 and December 31, the regulator noted.
As per the Interconnection Regulations 2017, there should be a minimum and a maximum gap of 6 and 18 months respectively, between two annual audits caused by a DPO.
The regulator is also seeking views on amending the regulations in light of the infrastructure sharing between DPOs allowed by the Ministry of Information and Broadcasting (MIB).
It has also asked the stakeholders whether new provisions need to be added to facilitate infrastructure sharing among the DPOs like cable TV, DTH, and Headend in the Sky (HITS).
TRAI noted that the provisions for conducting audits were introduced to ensure that the monthly subscription reports made available by the distributors are accurate and there are no manipulations.
