Adcap case on 11 February to consider if pay channels have right to show commercials

NEW DELHI: The Delhi High Court, which is slated to hear the advertising cap (adcap) challenge case on 11 February, today agreed to consider contentions on whether pay channels should be permitted to carry commercials in view of subscription fee charged by them. 

In a brief hearing, counsel Vivek Sarin on behalf of Home Cable Network Pvt. Ltd, which has come as an intervenor in the case, also told the Court that the petitioners had not disclosed the fact that broadcasters had given their consent to observe the 10+2 minutes ad cap rule under the Cable Television Network Regulation Rules 1994 and the Act that followed a year later and also under the Uplink and Downlink Guidelines.  

Defending the plea that pay TV broadcasters should not be allowed to take ads as they charged subscription fee, Sarin wanted the Court to order that offending pay TV broadcasters should deposit the advertisement revenue earned during the period from 17 December, 2013 onwards in the Consumer Welfare Fund maintained by the Union Government.

He said the Standard of Quality of Services Regulation 2012 and the subsequent amendment of December 2013 was clear that all channels had to observe the adcap.

However, Sarin also sought to argue that since pay channels charge a subscription fee, they should not be permitted to air ads and even if they do so, then the subscription charges should be adjusted accordingly. He said that the amendment of 17 December, 2013 to the Standard of Quality of Services Regulation should be modified accordingly and the protection given by the subsequent order of 27 November last should also be modified.

The case, filed by 9x Media, News Broadcasters Association (NBA) and others against the Telecom Regulatory Authority of India (TRAI) and the Union Government, has been adjourned from time to time on the plea that the government and the broadcasters are in talks on the issue.

Sarin wanted issuance of directions to the TRAI to enforce the 2012 Standards of Quality of Service (Digital Addressable Cable TV Systems) Regulations as amended in 2013 and the provisions of rule 7(11) of the Cable TV Network Rules 1994 against the offending pay TV broadcasters.

He also sought directions to TRAI and the Union Government to enforce the Clause 5.1 of the Down Linking Guidelines and the undertakings given by the Pay TV Broadcasters under Form A 1 against the pay TV broadcasters.

In the last hearing in November 2015, the Information and Broadcasting Ministry informed the Delhi High Court that it was in talks with the NBA and other stakeholders on the issue of the advertising cap of 12 minutes per hour on television channels.

Consequently, the Court put off hearing of the matter to 11 February, 2016 but observed that the matter had been pending for some time and therefore it will hear and conclude the case in the next hearing.

The intervention application by multi system operator (MSO) Home Cable Network and its head Vikki Chaudhary said it wanted to intervene as it was directly affected by the outcome of the present petition and “the ordinary subscribers are unduly burdened with unjustified charges when the cost of operating the channels can be recovered from the advertisement revenue. The said cost includes notional profits also.”

The application wanted the NBA petition to be dismissed and added, “The pay channel broadcasters are profiteering at the expense of subscribers and the DPOs. There is no justification for changing monthly subscription when commercial advertisements are inserted. The Standards of Quality of Service (Digital Addressable Cable TV Systems) Regulations 2012 (with Amendments thereafter) is justified to the extent they are applicable to pay channels. The pay channel broadcasters cannot charge the subscription fee while inserting commercials into the content or in the alternative, the subscribers have to be compensated for the revenue earned on the basis of their being subscribers of the channels.”

In the last two hearings on 8 and 23 September, the NBA had sought the adjournment on the ground that the matter was under discussion with the Ministry to seek certain clarifications.

It is learnt by that this comes in the wake of a statement made by I&B Minister Arun Jaitley in January last year that there should be no ad cap in the print or electronic media, However, no instructions have been issued in this regard by Jaitley so far.

The Court in an initial hearing of this case directed that TRAI will not take action against any channel violating the ad cap rule until the hearing of petition is over. The Court has since reiterated that this order will continue. In an earlier hearing, the Court had, at the regulator's instance, directed that all channels keep a record of the advertisements run by them.

The NBA had challenged the ad cap rule, contending that TRAI does not have jurisdiction to regulate commercial airtime on television channels. Apart from the NBA, petitions have been filed by Sarthak Entertainment, Pioneer Channel Factory, E24 Glamour, Sun TV Network, TV Vision, B4U Broadband, 9X Media, Kalaignar, Celebrities Management, Eenadu Television and Raj Television.

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