TRAI

The Telecom Regulatory Authority of India (TRAI) has released a draft of the Telecommunication (Broadcasting & Cable) Services Interconnection (Addressable Systems) (Seventh Amendment) Regulations, 2025. These proposed rules aim to strengthen transparency, accountability, and anti-piracy measures in the broadcasting and cable TV sector. The draft is open for public comments until October 6, 2025, and is expected to take effect from April 1, 2026.

Key Proposals in the Draft

1. Annual Audits Aligned to the Financial Year

Distributors of TV channels, such as DTH operators, multi-system operators (MSOs), and cable providers using digital addressable systems, must conduct annual audits. These audits will cover systems like Subscriber Management Systems (SMS), Conditional Access Systems (CAS), and Digital Rights Management (DRM).

• The audits must be conducted for the preceding financial year.
• Audit reports must be shared with broadcasters by September 30 every year.
• Only auditors empanelled by TRAI or Broadcast Engineering Consultants India Limited (BECIL) will be allowed to conduct these audits.

2. Advance Notice to Broadcasters

Distributors are required to inform broadcasters at least 30 days in advance about the audit schedule and the appointed auditor. Broadcasters will also have the right to send a representative to observe the audit process.

3. Relief for Small Distributors

Distributors with 30,000 or fewer active subscribers will not be mandatorily required to conduct annual audits. However, broadcasters may still request an audit if they feel it is necessary.

4. Dispute Resolution Mechanisms

If broadcasters disagree with the findings of an audit, they can raise objections within 30 days of receiving the report. The distributor must forward these objections to the auditor, who will then issue an updated report within another 30 days.
If disagreements persist, broadcasters can escalate the matter to TRAI and request a special audit, at their own cost.

5. Compliance Deadlines and Enforcement

If a distributor fails to share audit reports on time, broadcasters may conduct their own audit, once a year, at their expense. In cases of serious non-compliance, such as failure to meet technical benchmarks, broadcasters can disconnect signals after giving proper notice.

6. Rules on Infrastructure Sharing

When infrastructure such as SMS, CAS, or DRM systems is shared among multiple distributors, the draft mandates that each distributor must have separate instances of these systems. Subscriber data must also be properly segregated for reconciliation.

In addition, for pay channels, watermarking must be done at the encoder end by the infrastructure provider. Viewers should only see two on-screen logos: one for the broadcaster and one for the distributor.

7. Log Retention & Technical Standards

CAS systems must be able to generate and retain logs for at least two years. For shared infrastructure, command logs for each distributor must be kept separately.
The draft also reinforces technical benchmarks, ensuring that all distributors maintain consistent and reliable standards.

Why TRAI is Proposing These Changes

1. Transparency in Subscriber Reporting
   Revenue sharing between broadcasters and distributors depends heavily on accurate subscriber numbers. Discrepancies often lead to disputes. Mandatory audits aligned with financial years aim to make subscriber reporting more reliable.
2. Faster Dispute Resolution
   Currently, disputes drag on due to vague audit processes or delayed reports. The new rules set strict timelines and give broadcasters clear rights to object and escalate disputes.
3. Strengthening Anti-Piracy Measures
   Piracy remains a major concern in broadcasting. Rules on watermarking, log retention, and system segregation are designed to help trace and prevent unauthorized distribution.
4. Alignment with Financial Practices
   By aligning audits with the financial year (April to March), TRAI ensures consistency with how businesses already handle accounting and taxation.
5. Balancing Burden and Practicality
   Smaller distributors with fewer subscribers are exempt from mandatory audits, reducing their compliance burden while still allowing broadcasters to request audits if needed.

Stakeholder Impacts

Broadcasters

• Benefits: Greater transparency, more reliable subscriber data, stronger protection against piracy.
• Challenges: Increased responsibility to monitor audits, raise objections, and sometimes pay for special audits.

Distributors (DTH, MSOs, IPTV, etc.)

• Benefits: Clearer timelines, reduced ambiguity in reporting, and structured dispute resolution.
• Challenges: Increased compliance costs, need for system upgrades, and stricter accountability.

Small Distributors

• Benefits: Relief from mandatory annual audits, reducing costs.
• Challenges: Still may face audits upon broadcaster request, and must comply with technical requirements like log retention.

Consumers

• Indirect Benefits: Fewer service disruptions due to disputes, better accountability, and reduced piracy.
• Possible Drawback: Costs of compliance might eventually increase subscription prices.

Regulators and Auditors

• Expanded responsibilities to monitor compliance, handle disputes, and ensure enough audit capacity across India.

Potential Challenges

1. Costs and Capacity
   Distributors may struggle with the expenses of compliance, particularly for upgrading shared infrastructure.
2. Availability of Auditors
   Ensuring that enough qualified and independent auditors are available nationwide could be difficult.
3. Dispute Complexity
   While timelines are fixed, disagreements over what counts as valid objections or technical compliance could still create friction.
4. Shared Infrastructure Issues
   Separating data and ensuring proper watermarking in shared systems may be technically complicated and costly.
5. Enforcement Risks
   Disconnecting signals for non-compliance might affect consumers, raising questions about balancing punishment with service continuity.
6. Transition Period
   Although the rules take effect from April 2026, some distributors may find the timeline tight for implementing system changes.

What Stakeholders Should Do

• Review the Draft Carefully: Broadcasters, distributors, and consumer groups should analyze the draft in detail, focusing on technical benchmarks and audit procedures.
• Assess Current Systems: Distributors should evaluate whether their existing SMS, CAS, and DRM systems meet requirements for logs, watermarking, and data segregation.
• Engage in Consultation: All stakeholders should provide comments and feedback to TRAI before the October 6 deadline.
• Plan for Transition: With implementation less than a year away, companies should plan system upgrades and train staff accordingly.
• Negotiate Contracts: Interconnection agreements may need revisions to reflect new audit and compliance requirements.

Broader Significance

This draft is more than a technical update. It reflects a larger regulatory trend in India’s broadcasting sector:

• Greater discipline and accountability in subscriber reporting.
• Stronger anti-piracy frameworks to protect content creators.
• Possible precedent for future regulation of OTT platforms or hybrid broadcast-streaming systems.
• Incentives for infrastructure investment to meet compliance standards.
• Potential reshaping of revenue models and pricing as more accurate data changes negotiations between broadcasters and distributors.