Tdsat reserves order on Viacom18 petition against MSM discovery

NEW DELHI: The Telecom Disputes Settlement and Appellate Tribunal (Tdsat) today reserved its orders on Viacom18‘s petition alleging material breaches, misrepresentation and under-reporting of subscriber base by the MSM Discovery distribution bouquet.

The bench headed by Chairperson SB Sinha with members GD Gaiha and PK Rastogi heard Counsel for both sides for almost 90 minutes before reserving their order.

The case has arisen out of a dispute following the decision by Viacom18 to pull out its four channels – Colors, MTV, Nick and Vh1 - before the expiry of a three-year contract which had come into effect from 1 April 2009. Viacom18 has decided to shift its channels to Sun18, a newly formed joint venture between Sun Network and Network18.
Speaking for Viacom18, Counsel Mukul Rohatgi said he wanted orders to be passed restraining MSM Discovery from distributing the channels and conveying the impression to MSOs, DTH players and cable operators that Viacom18 was still with it. Even as it was for the Tribunal to decide whether his clients had erred in not giving 90 days notice as demanded by MSM Discovery and the penalty the Tribunal may like to impose, "I cannot have two distribution agents," he said.

He said no inconvenience had been caused to the consumers as the shift from MSM to Network18 had been a ‘seamless’ process.

He alleged that his clients had complete lack of trust because MSM had under-reported number of customers and gave the example of a cable operator who MSM had contended had 421 subscribers whereas the agreement between the operators and MSM showed he had 1093 customers.

He alleged that though the original agreement had been clear that MSM would help to increase the viewership of Colors TV channel, both Dish TV and Tata Sky had not included Colors in the same bouquets as Sony which in many ways was the main competitor. Dish TV had Sony in all its six packages while it had Colors in only two.

Referring to the statement in an e-mail in May this year by MSM that it was helpless in dealing with MSOs and cable operators, he said then his client did not want to work with MSM which had also backed out of its commitment to allow Viacom to have a stake (though that was not a clause in the agreement). 
Ramji Srinivasan, Counsel for MSM Discovery, said that the agreement had been to a fixed sum to Viacom18 and not on the basis of the number of subscribers and, therefore, the argument was invalid. Similarly, he said it was MSM which was suffering irreparable damage as MSOs, cable operators and DTH players were not paying, and therefore his client will file a suit for damages. He said the agreement was for a total payment of Rs 1.25 billion (for analogue cable only) over three years – Rs 360 million in the first year, Rs 420 million in the second year and Rs 470 million in the third year.

Viacom, thus, cannot ask for any relief from Tdsat as it is the party which has violated the terms of the agreement. He said the issue of a stake in MSM could not be raised at this time since Viacom18 had come to know the position as early as 29 April last year but did not act at that time.

He claimed that the agreement about having Colors in all bouquets was related to analogue and not digital mode and, therefore, DTH players were not involved. He wondered why Viacom had no complaints about its other channels VH1, MTV, and Nick, which had been distributed by MSM since 2004.

He also denied charges about promoting Sony and said that Colors had a viewership of 62.3 per cent against 56 per cent for Sony. He said that just because Colors had risen to the top position, Viacom18 was trying to reap the benefits by going to Sun18.

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