Regulators

Appeals against tariff increases of 27.5 per cent in DAS to be heard in August

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NEW DELHI: The Telecom and Disputes Settlement and Appellate Tribunal (TDSAT) today directed the Telecom Regulatory Authority of India (TRAI) to respond by 4 July to a petition challenging the legality of tariff orders allowing the increase of 27.5 per cent inflationary rise in the wholesale prices prevailing as on 31 March 2004.

TDSAT chairman Justice Aftab Alam and member Kuldip Singh said any other stakeholders including broadcasters could intervene by 16 July and the appeal would be heard on 4 August.

Meanwhile, the broadcasters will retain in a separate account, any payments received as tariff, as this would be subject to the final order of the Tribunal.

The appeals wanted TRAI to be directed to carry de-novo exercise in accordance with the statutory provision for price fixation for addressable system de-linking the same from the wholesale price of channels for non addressable system.

In the appeals filed by Home Cable Network and the consumer organisation Centre for Transforming India, the legality of Tariff Order (Telecommunications (Broadcasting and Cable) Services (Second) Tariff (Eleventh Amendment) Order 2014 dated 31 March this year allowing the increase of 27.5 per cent inflationary rise in the wholesale prices prevailing as on 31 March 2004 has been challenged.

The appellants have also challenged the impugned tariff order dated 31 March 2014 on the ground that the same has been passed in violation of Section 11(4) without affording any hearing opportunity to the stakeholders and without considering the relevant material and reports.

Furthermore, the impugned tariff order is without jurisdiction because it still provides for adhoc measure of price freeze as on 31 March 2014 even after 10 years of second tariff order dated 1 October 2004 while abdicating it regulatory duty to fix the tariff.

The impugned tariff order has adversely impacted the interest of the addressable platform because the wholesale pricing of the addressable system is based on the wholesale pricing of the non addressable platform; Fourthly that the impugned tariff is heavily tilted towards broadcasters and seriously prejudices the interest of the consumers, MSO’s and stifles orderly growth of the cable and broadcasting sector.

Counsel Vivek Sareen argued that TRAI ignored the fact that the wholesale pricing of non addressable system and addressable system are inter related. The wholesale price for addressable platform is derived from the wholesale price of non addressable system. By its order, TRAI indirectly and in substance increased the wholesale price for addressable platform / DAS notified area. The said increase in the wholesale price for addressable platform is affected in violation of section 11(4) of the Act.    

TRAI completely disregarded the fact that by changing the content pricing and increasing the same by 27.5 per cent with reference to the price existed immediately prior to 31 March 2014, this will immediately increase the price of content for addressable platform. The authority did not provide any hearing opportunity to the stakeholders including the appellants to represent their view as a stakeholder in the consultation process.

It was stated that TRAI had rushed to issue the impugned order thereby increasing the wholesale price for addressable platform by 15 per cent with effect from 1 April 2014. Thus the impugned order failed to take into account the inputs from such stakeholders.

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