Regulators
Report on Shemaroo

IBF files writ petition against TRAI in Bombay High Court

TRAI issued amendments on NTO recently

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MUMBAI: Amid the ongoing dispute in the broadcasting industry regarding amendments to the tariff order, the Indian Broadcasting Foundation (IBF), along with other broadcasters, has filed a writ petition in the Bombay High Court against the Telecom Regulatory Authority of India (TRAI).

“The petition under article 226 and 227 of the constitution of India has been filed praying, for a writ, order or direction quashing the amendments carried out vide the telecommunication (broadcasting and cable) services interconnections (addressable systems) (second amendment) regulations, 2020 along with the telecommunication (broadcasting and cable) services standards of quality and consumer protection (addressable systems) (third amendment) regulations, 2020 along with the telecommunication (broadcasting and cable) services (eighth) (addressable systems) tariff (second amendment) order, 2020 issued by the respondent (TRAI) on 1 January,” the petition read.

According to industry sources, the hearing of the case will come up tomorrow.

In the beginning of this month, the industry regulator modified certain provisions (described as impunged provisions ) of the new price regime which was implemented last year. TRAI prescribed twin conditions on pricing -

· The sum of the a-la-carte rates of the pay channels (MRP)forming part of a bouquet shall in no case exceed one and half times the rate of the bouquet of which such pay channels are a part

· The a-la-carte rates of each pay channel (MRP),forming part of a bouquet, shall in no case exceed three times the average rate of a pay channel of the bouquet of which such pay channel is a part.

The authority also decided that only channels with MRP of Rs 12 or less will be permitted to be part of the bouquet offered by the broadcasters.

How the amendments can harm the broadcasters’ business as well as consumer interest :

 The petitioners have mentioned that the amendments which has been notified in “consumer interest” will have exactly the opposite effect, leading to crippling of the business of broadcasters and ultimate suffering to the consumer.

It has also been mentioned that such crippling of the business would ultimately result either in closing down of the broadcasters’ channels or in diminishing the quality and the quantity of content available on TV channels to the consumer. In addition to that, the petitioners would lead in compelling the broadcasters to offer their channels only in a-la-carte format.

Additionally, unlike under the 2017 Regulatory Regime, the new provisions prohibit broadcasters from giving any discount on the MRP of any bouquet to the DPO. Hence the broadcasters are of the view that they are completely dis-incentivised from creative bouquet offerings. They think that the new prohibition placed upon the broadcaster from offering a discount on bouquets will result in a huge reduction in DPOs’ demand for broadcaster-created bouquets, resulting, over a period of time, in discontinuation of bouquet offerings by broadcasters.

The writ has been filed broadly to address the following issues:

· A Broadcaster’s freedom of pricing its own content has been taken away/ interfered with by the Respondent, as it continues to place fetters and unrealistic caps on the manner of offering the channels and pricing thereof.

· Despite admission by Respondent that offering of channels through bouquets is the preferred and prevalent practice, even from a subscriber’s viewpoint, the Impugned Provisions have the effect of dismantling and making unworkable any bouquet offering made by the broadcasters, by placement of fetters that have no co-relation to the method or manner of offering content to the subscriber.

· A broadcaster’s effective freedom to price its channel with a view to recover/recoup its every increasing investment into content creation, is being taken away. The earlier imposed cap that prohibited any channel priced at more than Rs 19, as per the 2017 Interconnection Regulations and 2017 Tariff Order, has now been unilaterally and arbitrarily reduced to Rs.12 by the Impugned Provisions.

· A broadcaster’s freedom to offer its channels as part of one or more bouquets, has effectively been taken away, by prohibiting the broadcaster from offering any discount on the Maximum Retail Price of its bouquets; and further, by placing archaic and unworkable conditions to be followed by a broadcaster while creating a bouquet.

· At the same time, the Delivery Platform Operator (“DPO”) has been given further freedom to offer channels as part of bouquet and to give discounts on bouquet prices, by unilaterally reducing the price of the channel received by the DPO from the broadcaster, has been kept intact and in fact, strengthened.

· A Broadcaster has effectively been prohibited from offering, as part of any bouquet, Niche channels, including sports channels, whose content consists of expensive and exclusively licensed rights to broadcast sporting events.

To address the issues, IBF on Friday also held a press conference in Mumbai. The broadcasters of India came in support of each other under the shelter of IBF to voice their concerns against the new TRAI amendments of the new tariff order. All the top bosses of the major networks have agreed to the fact that this revision is going to leave severe adverse affect on all the players. The industry may explore legal options to fight the disruption.

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