Technology

Arguments on appeals against Tariff Order conclude

NEW DELHI: Arguments over appeals challenging the Trai Tariff Order concluded before the Telecom Disputes Settlement and Arbitration Tribunal (Tdsat) on Friday.


Trai (Telecom Regulatory Authority of India (TRAI) has agreed to provide on Monday some clarifications that have been sought by Tdsat Chairman S B Sinha and Member P K Rastogi. After Trai gives the clarifications ,which order of the tribunal will be awaited on the appeals by multi-system operators (MSOs) and local cable operators (LCOs) against the Tariff Order.


The Tariff Order has also prescribed the revenue sharing ratio between (MSOs) and local cable operators (LCOs), and MSOs and broadcasters.


Counsel for MSOs and LCOs contended in their counter arguments that the Tariff Order and Regulations were aimed at helping the television broadcasters and the direct-to-home (DTH) platforms while TRAI counsel said detailed study had gone into the Tariff Order and the regulations.


Counsels Rajan Bakshi on behalf of United Cable Operators Welfare Association and C S Vaidyanathan on behalf of MSO Digicable Networks said they were not opposed to introduction of digital addressable systems (DAS) but some infirmities had to be corrected. They also alleged that the broadcasters were deliberately not revealing their retail tariff per channel, which was essential before the switch to digital delivery of television channels from 1 November.


Counsel Bakshi claimed that Trai‘s Reference Interconnect Offer document showed that the rates of popular channels had gone up by an average of up to 315 per cent per channel from the rate of Rs 5.45 set initially by TRAI.


Both Bakshi and Vaidyanathan in separate arguments wondered why TRAI had not chosen the formula worked out for the conditional access systems in 2006, which had even been approved by the Supreme Court, and instead opted for amending the Tariff Order of 2010, which was challenged before the apex court and the court had order a status quo.
Vaidyanathan said TRAI could have used any of three other options - the 2004 Order, the 2006 Order, or the 2010 Order which also applied to DTH and was pending in court - but chose the option of 2004 relating to non-addressable systems with some elements of the 2010 order for reasons not explained in the Explanatory Memorandum.


He said there was no rationale for not taking the order for conditional addressable systems, which had even been upheld by the apex court. By not doing this, TRAI has also equated MSOs and DAS with DTH. If it had to take the DTH model, then it should not have set a revenue sharing ratio between MSOs and LCOs and should have let market forces decide. It was also odd that while DAS was regulated, DTH got away scot-free.


He added that while laying down the mandate for building a capacity for 500 channels, TRAI had made no study and it was clear that there was no need for so many channels since most viewers saw 15 to 20 channels. He said that while the capacity building for 250 channels had cost Rs 30 million, MSOs will have to spend around Rs 120 million for building the capacity for 500 channels even if they decide to keep only 200 or so, on their network.


He read out various paragraphs of the 2006 Order to say that the Tariff for CAS could easily have been applied to DAS since most of the criteria were the same.


He said basically all this is being done because Trai does not want to regulate the broadcasters. He read from a page on the TRAI website that one channel on Golf cost around Rs 750.


He argued that one reason why the 2004 order was not applicable here was that there was no concept of ala carte channels at that time, with all channels coming in bouquets.


He also wondered why TRAI wanted to ‘micro-manage‘ the choice of the consumer, who should have been left to make his own choices. The whole scheme was disproportionate to public interest.


He also pointed out that the 2006 Order amended in 2007 had fixed city-wise tariffs, which had not been done here.
Earlier, counsel Gopal Jain for intervener NDTV said the appeals would prove to be an impediment to a system that appeared very good as Trai had taken a forward-looking approach. In any case, TRAI had the power of periodic revision.


He also claimed that the resistance from MSOs and LCOs was only because of the undue advantages inherent in the analogue system, and not the abolition of placement fee or restrictive carriage fee. The earlier system was skewed in favour of the MSOs.


Mr Tejvir Bhatia, counsel for Times Global and India TV, wanted the ‘must carry‘ clause to be enforced.


At one stage, TDSAT member P K Rastogi (sitting with Chairman Justice S B Sinha) observed that the broadcaster was interested in his advertisement revenue and so paid carriage fee, while the aggregator could only earn through subscription.

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