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Madras HC gives split verdict in Star India versus TRAI case

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NEW DELHI: While parts of the country took a break on a moderately warm day after playing Holi, the Madras High Court delivered a split verdict in a case involving Star India and the Telecom Regulatory Authority of India (TRAI), apart from several other private and government organisations. This effectively means that the Supreme Court will again have to take a stand on whether the regulator’s proposed tariff order relating to broadcast and cable sectors could be implemented or remains in suspended animation.

While striking down certain aspects of the tariff guidelines (maximum retail price and discounting limits), issued by TRAI late 2016, and upholding the petitioner's plea, the two-judge bench of the high court referred to another yet-to-be-decided judge the issue of jurisdiction of TRAI on matters such as copyright over content.

Now that the high court has delivered a fractured verdict, raising fears of a status quo and non-implementation of the TRAI tariff guidelines in certain sections of the cable distribution industry, the Supreme Court could likely early next week take a view whether TRAI can go ahead and implement the regulations or further judicial clarity is needed.

“The reason for putting cap of 15 per cent to the discount on the MRP of a bouquet disclosed in to the impugned Tariff Order is that, as per data available with TRAI, some bouquets are being offered by the distributors of television channels at a discount of up to 80-90 per cent of the sum of a-la-carte rates of pay channels constituting those bouquets. Such high discounts force the subscribers to take bouquets only and thus reduce subscriber choice. This, in my view, cannot be a reason to restrict the discount,” the judgement observed at one point.

The lengthy verdict (over 140 pages) of the two-judge bench of the high court, which had been hearing a case filed by Star TV and associate Vijay TV challenging tariff guidelines of TRAI on various grounds of copyright and whether the regulator has the jurisdiction to make regulatory guidelines, was delivered after the hearings got over several months back and the verdict was kept in abeyance.

While stakeholders refused to comment on the verdict officially, saying the fine prints of the lengthy order need to be studied over the weekend, TRAI could not be reached for its version on the Madras HC verdict.

However, an industry observer opined that considering the high court’s observations on MRP and discounts relating to TV channels, implementing the remaining part of TRAI’s proposed tariff and inter-connect guidelines would make less sense as both the issues frowned down upon by the high court form an integral part of the overall regulations.

The tariff issue has been in the courts since late 2016. The Delhi High Court too is hearing a similar matter involving TRAI’s proposed tariff guidelines. In this case the petitioners are DTH operators Tata Sky and Airtel Digital.

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