Scatmag.com

March 2017

TRAI TARIFF ORDER UPDATE


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BACKGROUND

The TRAI has regulated Pay Channel tariffs for more than 20 years. However almost every move has been impeded by broadcasters challenging ever tariff order in court.

A couple of years ago, the TDSAT and subsequently the Supreme Court instructed the TRAI to completely rethink its tariff regulations.

The regular released a consultation paper on the topic, inviting views from all interested parties. TRAI also put together several suggestions, it had collected, to address the main concerns of consumers, broadcasters and distribution platforms.


SALIENT FEATURES

The suggestions were quite radical, to suit the demands of industry players.

The new tariff proposal suggests that Distribution Platform Operators (DPOs) will act as intermediaries in providing TV channels to consumers. DPOs would also get a rental fee from the customers of up to Rs. 130 for providing 100 SD channels. A subscriber may request additional network capacity in bundles or lots of 25 SD channels @ Rs. 20 per month for subscribing to more than 100 channels. Additionally, the distribution platforms will get 20% distribution fee from the broadcasters for collection and remittance of pay channel revenue.

Broadcasters are to directly levy a direct retail price to consumers. This Maximum Retail Price (MRP) is proposed to be capped by the TRAI, for various TV genres.

The TRAI has suggested that sports channels MRP be capped at Rs. 19, GEC at Rs. 12, Movies at Rs. 10, Kids Rs. 7, Infotainment at Rs. 9, News Rs. 5 & devotional channels Rs. 3. The cost of an HD channel cannot exceed 3 times the cost of a corresponding SD channel.

TRAI has also regulated the carriage fee by capping it at 20 paisa per channel per subscriber per month, decreasing with increase in subscription. No carriage fee is to be paid if the channel is opted by at least 20% of the subscribers. DPOs can provide a discount of upto 35% of the carriage fee.





STAR GOES TO COURT (AGAIN)

Even before the TRAI announced its tariff order, in a pre-emptive move, Star TV and Vijay TV moved the Madras High Court staying any order. They contend that TRAI, by its price caps, has overstepped its jurisdiction and violated the Copyright Act, which deals with all aspects of exploitation and monetisation of content.


TRAI APPEALS SC

To over come the delays that the Madras high Court hearings would cause, the TRAI filed a special leave petition (SLP), to over-ride the Madras High Court hearings.

As instructed earlier by the apex court, the TRAI submitted its proposed tariff orders in a sealed envelope to the Supreme Court. It will be recalled that the Supreme Court had instructed the TRAI to rethink prevalent tariff orders, and rethink the issue.


SC REJECTS

On 20 Feb 2017, the Supreme Court refused to step in to allow TRAI to issue final broadcast tariff regulations, saying it would wait for the final outcome of the copyright case in Madras High Court. The apex court re-scheduled its next hearing to late March.


MADRAS HIGH COURT

The Madras High Court has held preliminary hearings, and has scheduled the next hearing to March 7.


INDUSTRY JOINS PETITION

Various industry players have requested the Madras high Court that they be permitted to join the petition

On 17 February, the Madras High Court dismissed the Indian Broadcasting Foundation's (IBF) application to implead in TRAI's draft tariff order. The IBF, however, can file a fresh writ petition.

On 23 Feb, the Madras High Court allowed MSOs (under AIDCF) to intervene on matters of law under consideration. In an official statement, AIDCF said the court was "pleased to permit AIDCF to participate in the proceedings as (an) intervener" allowing it to "file all relevant material, make oral submissions and file written submissions in the main writ petition."


120 M HOMES AWAIT ORDER

In the meantime, more than 100 million Cable and DTH homes await the Madras High Court's verdict on whether price caps violate the Copyright Act. If the High Court rules against price caps, the TRAI will have to reframe its order, with very far reaching consequences regarding the powers of the TRAI.

If the High Court rejects Star India & Vijay TV's contention, the focus will shift to the Supreme Court to review and approve the TRAI's new tariff order.

Until then, 100 million Cable & DTH homes will have to abide by the existing orders, which both the TDSAT and the Supreme Court have asked to be revised. n