Tdsat asks Trai to reconsider Neo's pricing in 2 months

NEW DELHI: The Telecom Disputes Settlement Appellate Tribunal (Tdsat) on 3 July finally asked the Telecom Regulatory Authority of India (Trai) to reconsider its order of fixing the bouquet price for the two Neo channels at Rs 37.50, while asking Neo to justify its rates, the highest for any sports channel countrywide.

Neo has been told to supply its justifications to Trai within the next two weeks, and the sector regulator has been asked to consider these justifications, as also the other data available pertaining to other channels before issuing a fresh direction on the price for the channels and the bouquet.


Trai has been asked thereafter to issue a fresh direction fixing the price of these two channels and bouquet of Neo Sports.

While fixing such prices, Trai must give basis on which it has done so, the tribunal said, and the process has to be completed in 60 days.

At the end of the highly attritious case, hearing both parties, the tribunal held that "the manner in which both parties have conducted themselves leaves something to be desired".

The tribunal said that while Neo did not submit its details as to how it fixed the prices of its channels, Trai failed to fix prices of individual channels and also failed to give the basis as to how it arrived at the price of Rs.37.25 for the bouquet.

However, till the fresh direction is issued, the present price fixed by Trai will hold, and Neo will not be able to change this over the next two months.

From the legal point of view, there have been a few important observations that will affect future directions by Trai.

One crucial issue was the Neo challenge that Trai had issued the order under a wrong section of the Cable Television Network Act, that is Section 13.

However, the court observed that Trai had issued the order under its powers to ‘intervene‘ which is derived from Section 11(B), and thus the sector regulator had not functioned under a wrong legal provision.

The court also observed that Trai had issued a Tariff Order u/s 11(1)(b)(ii), (iii), (iv) and 11(2) on 10 October 2004.

This exercise was basically tariff fixation which as per the Act was correctly done in exercise of powers vested in Trai under Section 11(2) of the Act. This is known as the Principal Tariff Order.

Subsequently, Trai issued notification dated 31 July 2006 exercising its powers under the same Sections as in the main tariff order whereby it amended its original tariff order by incorporating additional clause 3B as under :-

The court said: "The principal Tariff Order dated 01.10.2004 was the source for the impugned order and, therefore, the impugned order could not be said to be a fresh exercise of fixation of tariff.

"Moreover, for individual channel the Trai could not be expected to go into the gamut of entire procedure before tariff fixation every time," it added.

Lastly, on the Neo argument that its channels were different even within the genre of sports channels because they were cricket centric, Tdsat said that Neo had destroyed its own argument.

"According to the appellant its channel NEO Sports is totally for cricket while its other channel NEO Sports Plus is a general Sports Channel. The appellant has priced both the channels equally.

"This in our view destroys the argument of the appellant about its channel having a distinct identity.

"The appellant has itself equated the two channels when one of them is totally cricket-centric and the other is not so."

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