Regulators

Third Madras high court judge gives TRAI tariff order thumbs up

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MUMBAI: The long-awaited judgment of the Madras High Court on the TRAI tariff order has been pronounced.

Sources indicate that almost all the proposals mentioned in the order have being given the go- ahead -  the only exception being the capping of discounts to 15 per cent.

The decision was announced by the third judge in the Madras High Court earlier today – an order is supposed to come later this evening.

Reacting to the judgement, AIDCF hailed it as “significant for the cable TV broadcasting and distribution sector’. AIDCF president Rajan Gupta said, “We are elated to note that Honorable Mr. Justice M.M. Sundresh has concurred that TRAI is within its jurisdiction in notifying the tariff order and interconnection regulations of 2017. This new regulatory framework will benefit the entire sector and especially the consumers by improving transparency, enhancing subscriber choice and removing discrimination in provision of content.”

He further added: “We hope that this present judgment, combined with the earlier view of Honorable Ms. Chief Justice Indira Banerjee, is taken in the right spirit by the stakeholders and any further unnecessary litigation is avoided so that the TRAI can move forward and continue working towards its vision of creating a transparent and non-discriminatory regulatory framework governing the sector."

Earlier in March 2018,  a two member bench of the Madras High Court had delivered a split verdict in Star Vijay’s litigation against its passage as content pricing should be left to the discretion of the broadcasting.

While chief justice Indira Banerjee, heading the first bench, had ruled in favour of TRAI, the second judge -- justice M Sundar – had ruled otherwise. The matter was then referred to a third judge who had been given a month to give his directive. The third judge’s decision came earlier today.

Sources indicate that the third judge has also suspended the decision for the next two weeks, giving Star India a  chance to appeal against it in the Supreme Court.

The TRAI order had the following highlights...

The role of the broadcaster

Under this, broadcasters will have to first declare their channels as a pay channel or a free to air channel, on an a  la carte basis, and in one of the following seven genres: devotional, general entertainment, infotainment, kids, movies, news and current affairs and sports. The TRAI has defined a ceiling on the maximum retail price (MRP) for each of the genres: devotional (Rs 3), general entertainment (Rs 12), infotainment (Rs 9), kids (Rs 7), movies (Rs 10), news and current affairs (Rs 5) and sports (Rs 19).

Each pay channel has to have a MRP  that can vary depending on the region, but which cannot be changed before the expiry of six months of it being declared. These rates will be platform agnostic – that is, uniform across the platforms (cable TV, DTH, HITS and IPTV) across a relevant geographical market, and will have to be declared on each broadcaster’s website and be transparently available to the TRAI, TV distributors and consumers.

The pay channels of a network or its subsidiary or holding company or subsidiary of the holding company can be packaged into a bouquet. This can be done while taking the precaution that the bouquet’s MRP is not less than 85 per cent of the sum of the MRPs of the a la carte pay channels forming a part of the bouquet. Similar conditions of holding prices for six months and in geographical areas also apply to bouquets.

The TRAI has introduced a category called a premium channel. Broadcasters are free to notify any channel as premium channel in their reference interconnect order (RIO). There shall be no price cap on maximum retail price notified by broadcasters for customers. For HD channels, the regulatory authority has, however, stated the price cannot be more than three times the MRP of the corresponding channel transmitted in SD. For those HD channels that do not have a corresponding SD channel, the benchmark will be the ceiling on the MRP of the genre it is in. These independent HD channels will have a price ceiling of three times the ceiling of the MRP of the genre.

The television distributor’s role

On the television distributor side, the TRAI has made them responsible to provide all channels on a la carte basis and it has also  proposed to formalize  a minimum subscription fee of Rs 130 per month per set top box from a subscriber for 100 SD channels.  Now if an HD channel is included in this, it will be equal to 2 SD channels.

The TRAI has stated that TV distributors cannot change the bouquets formed by broadcasters or its price, but they can form bouquets themselves of pay channels of different broadcasters provided that their price is not less than 85 per cent of the sum of the MRPs of the pay channels forming part of the bouquet. Free to air, HD and SD variants of the same channel and premium channels are not permitted to be included in these bouquets.

The authority says that the composition of the 100 channel basic tier should be left to the subscriber’s volition. It can consist of FTA, pay, premium channels, broadcast bouquets or even television distributor package bouquets. But it has to have the government mandated channels and at least five channels of each of the seven genres. If the subscriber opts for pay TV or premium or HD channels or broadcast or TV distributor bouquets, he will have to pay the retail price for these separately.

Subscribers wanting channels beyond the basic tier can opt for other channels by paying the TV distributor Rs 20 – excluding taxes-  for each slab of 25 channels and the broadcaster the MRP of each channel.

The TV distributors also have another responsibility. The electronic programming guide on the network must display the details of all channels and their MRP genre wise for easy navigation. Broadcasters who are relying on TV distributors to collect and remit the pay channel revenues will provide a 20 per cent distribution fee to them, which the latter can share with the LCOs who are actually doing the collection. Additionally, TV channels can also offer a maximum 15 per cent MRP discount to TV distributors to encourage them. Parameters for discounts will be disclosed by broadcasters in the RIOs that will be transparent and uniform for all distributors of television channels.

More to follow…Keep reading Indiantelevision.com

Also Read:

Madras HC gives split verdict in Star India versus TRAI case

TRAI-Star case back to Madras HC with SC rider

SC could take up TRAI-Star case on tariff regulations

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