Tata Sky Case: Delhi High Court pulls up TRAI for modifying roll-out plan midway

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Tata Sky and others have challenged TRAI’s 2017 tariff order

Delhi High Court, hearing a challenge by DTH and cable companies against TRAI’s new tariff scheme, today expressed its displeasure over regulator modifying tariff roll-out process of the new tariff system without even informing the court.

Chief Justice Rajendra Menon asked the regulator to file an affidavit within a week explaining the latest changes to the switch-over.

On Tuesday, TRAI had complicated an already complicated situation by allowing cable and DTH operators to offer pre-switchover plans to some of their customers till March 31.

The move had raised more questions than it answered, as it was not clear how it was possible for cable and DTH companies to offer channels to their customers at old prices when they themselves are supposed to pay revised prices to the owners of the channels.

The Delhi High Court, which is hearing a petition by TV channel distributors like Tata Sky, Airtel Digital and other parties against the implementation of the new rules, also noted that TRAI had filed a 500-page affidavit in the court soon after the last hearing in the matter.

The court noted that fresh material cannot be filed after a party has finished arguments. To file fresh material, the court’s permission has to be sought.

The TRAI has now been asked to explain in writing the circumstances around the issuing of a press release, as well as the filing of the new affidavit, by Wednesday.

Today’s proceedings primarily comprised the arguments of Discovery Communications, whose primary complaint against the TRAI regulations are with regard to the way the regulations were created, rather than TRAI’s right to frame the regulations, which was what Star India had challenged in the Madras High Court.

In its arguments, Discovery Communications compared the way TRAI arrived at its rules to the way similar regulations are framed in other countries.

More than one channel owner has questioned how TRAI arrived at the 15% figure, and how it arrived at the cap of Rs 19 per channel for channels that can be included in packs and so on.

The matter has now been posted for a hearing on Thursday, next week (Feb 21).

Tata Sky and Airtel Digital had originally filed their case in the Delhi High Court challenging TRAI’s right to abrogate or dictate their commercial agreements with their suppliers, customers etc. and challenging the new TV channel pricing norms.

However, no less an authority than the Supreme Court of India upheld TRAI’s power to implement such a tariff order in October last year. The Supreme Court’s order also seemed to uphold the tariff order, including the 85% rule that the Madras High Court had struck down.

However, TRAI has maintained that it was not clear whether the Supreme Court had upheld its regulation in its entirety, and therefore cannot impose the provisions that were struck down by the Madras High Court.

Following this, Tata Sky and Airtel Digital have sought directions from the Delhi High Court that TRAI should now implement the tariff order in its entirety, and not in a piecemeal fashion as it has done.

The issue of piecemeal implementation was also raised by cable operator Fastway in front of the Telecom Disputes Settlement and Appellate Tribunal — which hears industry disputes relating to the media and telecom. At the time, TRAI argued that matter was being deliberated upon by the Delhi High Court. The TDSAT subsequently refused to intervene, given the constitutional courts were engaged in the matter.

If the Delhi High Court holds that the Supreme Court upheld TRAI’s original regulations in their entirety and that the regulator must therefore impose the tariff order in its entirety, prices of individual TV channels are likely to crash by 50%-66%.

ANTI-BUNDLING

The tariff order of 2017 was aimed at preventing the ‘clogging’ of cable and DTH networks by ‘junk’ channels pushed by big broadcasting companies by using ‘bundling’ or channel packs.

The new rules required channel owners to supply their channels at comparable prices whether someone wanted to buy only one channel or an entire pack or bouquet. The provision was however struck down by the Madras High Court on an appeal by Star India.

DTH players like Tata Sky, Airtel Digital and Sun Direct, as well as cable operators are calling for the implementation of the original provision so that they can get access to individual channels, instead of being forced to carry and sell bouquets.

A clarification in this regard by the High Court could benefit consumers who are not interested in whole bouquets, but want to pick and choose the channels they want to subscribe to.

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