The matter saw many adjournments due to lack of time. It was expected to be taken up on 5 September, then on 11 September which was adjourned till 12 September. Then the SC was to hear it on 18 September which was adjourned till 19 September.
The TRAI Tariff Order case is also being heard at the Delhi High Court which on September 6 relisted the TRAI tariff framework matter to September 19 (now will be heard perhaps in October). At the Delhi HC, pleas were filed by direct-to-home platforms Bharti Telemedia Ltd owned Airtel Digital TV, and Tata Sky Ltd, challenging the validity of the tariff regulations issued by the authority.
As you all know, the civil appeal filed by Star India and Vijay Television challenging the Madras High Court order allowing the TRAI tariff order and interconnect regulation was admitted on 20 July. While many broadcasters including Zee Entertainment Enterprises Limited, Sony Pictures Networks India Private Limited and TV18 Broadcast Limited have uploaded their new Tariff order, Star India is yet to file its reference interconnect offer (RIO) declaring MRP and bouquet rates.
The SC had also issued notices to the Department of Industrial Policy and Promotion (DIPP) and TRAI and had asked them to file counter affidavit within four weeks.
The broadcaster Star India has challenged TRAI’s jurisdiction to frame the tariff order contending that the exploitation of intellectual property (IP) rights are covered under Copyright Act. The broadcaster has also challenged the TRAI press release informing about the implementation of the regulatory framework from 3 July 2018.
TRAI, on July 3, 2018, had implemented the Telecommunication (Broadcasting and Cable) Interconnection (Addressable Systems) Regulations 2017 after it was upheld by the Madras High Court with an exception. While bringing the order into effect on July 3, the TRAI had prescribed timelines for the stakeholders. The deadline for compliance was August 31, 2018.
Channels may cost more:
Most of the broadcasters which published their RIO have stuck to a maximum 15% MRP discount to distributors. Channels like Star, Zee and Sony Pictures, have decided not to offer their channels in the basic pack of cable and DTH operators.
Rs. 130 Basic packs offered by many broadcasters may not have many channels of a customer’s choice. Also, recently Zee Entertainment Enterprises (ZEE), Sony Pictures Networks India (SPN), Viacom18 and TV18 are among networks that have converted all their free-to-air channels into pay channels.
As per an industry insider, “All of us decided not to offer our channels in the basic pack for two reasons. First is that there will be a mad rush to be a part of these packages and distribution platforms (cable & DTH) will ask for astronomical carriage and placement fee, and secondly, viewers will not want to go for higher packs if they can get their dose of entertainment at a low price.”
According to a top executive at a broadcasting company, the idea was to make the basic pack “unattractive” for subscribers. He said: “For long the pay TV industry has suffered low ARPU (average revenue per user) and we decided not to continue with the same mistake we committed with FreeDish. With none of the channels of the top broadcasters available, they (subscribers) will be forced to opt for pay channels at higher price.”
According to legal experts, this cannot be seen as an attempt to cartelise the industry, because the TV networks have submitted a la carte rates.
Abhishek Malhotra, partner at law firm Bharucha & Partners, said: “Offering of channels in the base pack or any particular package, is to be done by the delivery platform operator (DPO). The broadcasters are only mandated/required to declare the MRP of their channels and the channels must be offered on an a la carte basis. These prices are competitive and definitely not likely to be the same,”
He added: “If the broadcasters’ channels do not figure in the base pack offered to the consumer by the DPO, the broadcasters cannot be held liable for price fixations, and definitely not for cartelization.”
A subscriber (if we look at all channels’ RIOs) may have to pay Rs 400-450 per month for all the standard definition (SD) channels of top broadcasters.
As per a SPN spokesperson, “We are pricing our driver channels in different genres at or close to Rs 19 as we want to offer a la carte and bouquet options. It’s a response to the tariff. Can’t comment on what other broadcasters are doing.”
As you know, TRAI has capped a channel’s price in a bouquet at Rs 19 per month. If the Supreme Court order is in favour of the regulator, channels will have to sign their interconnect agreements with cable and DTH companies by December 27 and comply with the new tariff order, which offers consumers choice to get first 100 channels for not more than Rs 130.
Out of these 100 channels, 26 are mandatory Prasar Bharati channels. FTA Broadcasters may have to pay to get in the remaining 74 channel slots to get a better viewership. However, a consumer will have the option to select 100 channels of his or her choice as well. They will just have to pay a la carte price of the particular channel.”