Scatmag.com

January 2017

MADRAS HC STALLS TRAI'S NEW TARIFFS


Star Has Stalled The TRAI's Most Significant Tariff Order, Through A Court Stay.


Once again seeking disruption of proposed progressive tariff regulations, STAR India has sought a stay from the Madras High Court, against the TRAI's eagerly awaited tariff regulations.

In the past, the TDSAT had chided Star India for excessively litigating and stalling proposed reforms. Could this be the reason why this time, Star India has approached the Madras High Court, claiming that the TRAI's proposed regulations conflict with its copyrights.


THE STAY

On 23 December 2016, the Madras High Court ordered the TRAI to maintain status quo with regard to any tariff orders or regulations for the broadcast sector.

The division bench of Madras High Court asked Additional Solicitor General G Rajagopalan to file the Centre's response to the issue of TRAI's jurisdiction to regulate prices.

This is a very wide ranging stay that includes stays on broadcast tariffs, broadcast interconnect, and Quality of Services.

The case has been adjourned until 12 January.

It seems likely that the matter will drag on in courts for several months, if not years. Effectively, the TRAI cannot put out any TV tariff regulations, until the courts give their final verdict, on the TRAI's area of authority.






THE PETITION

The Madras HC order came on a petition filed by Star India and Vijay TV.

Represented by senior counsel P Chidambaram, Star and Vijay argued that TRAI had overstretched its jurisdiction by fixing price of content. Chidambaram also contended that the tariff fixing exercise was a violation of the Copyright Act, which deals with all aspects of exploitation and monetisation of content.

The IBF claims the Copyright Board is fully empowered to adjudicate upon disputes between any person and Content or Broadcast Reproduction Rights owners. Hence the Copyright Act and Rules provide for protection, monetisation, enforcement and adjudication procedures for all copyrightable work and broadcast reproduction rights.

A TRAI spokesperson said that the immediate consequence of the court order is that TRAI will not be able to declare its eagerly awaited new tariff guidelines.

In early December 2016, TRAI had promised to release its new tariffs before end 2016.


PROPOSED ORDER

A few months ago, TRAI had issued draft guidelines on tariff interconnect and quality of service.

These were in direct response to the TDSAT and Supreme Court's directives to the TRAI, to review the existing tariff regulations, afresh, and declared a more reasoned and cohesive tariff regulation for Pay Channels as well as DPO like Cable TV networks, DTH & HITS platforms.


TRAI'S THINKING

While the TRAI has not declared its final order, it had put forward a consultation that proposed the following radical changes in the way broadcasters & DPOs get their revenues. (See SCaT Nov 2016, pages 61 to 70)

♦ Broadcasters To Declare Customer MRP

♦ DPOs Receive 20% Collection Fee

♦ Channel Priced Capped For Each Genre

♦ DPOs Receive A Capacity Charge From Consumers

♦ FTA & Pay Channels Not In The Same Bouquet

♦ Carriage Fee capped At 20p Per Pay Channel

♦ No Carriage Fee For FTA Channels

The TRAI's proposed regulations seemed to please almost everyone in the industry, except large broadcast houses that held pole positions to leverage their positions.


INDUSTRY SET BACK

The Madras Court's stay has set back the entire reform process, that was first initiated by the TDSAT and endorsed by the Supreme Court. It needs to be seen, how long this court order will stall the industry.