NBTC plans to regulate OTT video to help floundering pay-TV operators

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Thailand’s National Broadcasting and Telecommunications Commission has vowed to regulate OTT TV and streaming to save beleaguered pay-TV players struggling not to go bankrupt under a double whammy of high license fees and network rental fees.

At a conference entitled “Pay TV under Thailand 4.0”, NBTC Commissioner Doctor Pravit Leesathapornwongsa said that the regulator would look into regulating OTT players such as YouTube in order to “bring commercial parity” to licensed pay-TV operators.

Pravit said that currently more than half of Thailand’s Internet users now watch streaming video, and an increasing number are now watching it via their mobile phones. He said that imposing regulations would be straightforward, as both mobile and broadcasting fall under the regulator’s remit, and both depended on the NBTC for their operating licenses.

However, he added that regulating YouTube would be more difficult, and would take a couple of years before the legislation could be passed.

Allan Rasmussen from consultancy Yozzo, commented that the NBTC itself was partly responsible for the current non-level playing field it’s attempting to correct – the NBTC has celebrated its sky-high license auction results three years ago, and has pushed for a proprietary digital TV standard. And it appears to have had no long-term plan beyond the auction itself.

The NBTC fetched $1.12 billion (39.65 billion baht) in total from that pay-TV license auction: 23.7 billion baht for HD channels (124% above the reserve price), and 15.95 billion baht for SD (almost 500% higher). At the time, the NBTC declared the auction was a great success because of the amount of money it raked in.

In addition to the 15-year license fee, each winner would have to pay an additional $69 million (2.45 billion baht) for network rental access for 15 years to the incumbent broadcasters: NBT, MCOT, Thai PBS and two TV5 (Army TV) networks.

All of this is before you get to the actual cost of producing content and running a studio.

Because of the auction prices, there have been no winners. After a protracted death where the NBTC actually forbid a channel to go bankrupt under the guise of consumer protection, that channel has finally ceased operations, while another is near folding and the others are struggling. Many have suggested that the junta use Section 44, the absolute power clause of the constitution, to save the remaining operators from bankruptcy despite the moral hazard such a move would create.

In addition to the commercial mess, Rasmussen reports that the specs are also a mess. The NBTC had taken parts of DTV 1.3.1 and added them to 1.2.1. The problem is that the custom Thai spec does not allow for catch-up TV, which would have allowed the broadcasters to compete more effectively with OTT players.

This has also driven up the cost of the customer DTV decoders, and has led to a complicated voucher subsidy system that even today, three years after the auction, is still being issued in phases.

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