The Bombay High Court did not issue a stay on the implementation of the amended TV channel tariff order issued by TRAI on News Year’s day, but kept the possibility open when it takes up the case again on January 22.
Broadcasters, under the aegis of Indian Broadcasting Foundation, had approached the Bombay High Court yesterday seeking an urgent stay on TRAI’s new tariff rules, pointing out that their roll-out will start tomorrow (January 15).
However, the court did not give an interim stay on the implementation of the new rules.
With this, all broadcasters — including IBF members like Zee Entertainment, Star India and Sony — will have to publish new prices for their channels tomorrow (Jan 15). IBF had sought a stay by expressing the fear that if they publish the new rates, cable and DTH operators can start entering into distribution deals based on the new prices.
“..in the event that the Impugned Provisions [new tariff order] are not stayed/Respondent is not restrained from giving effect to the Impugned Provisions, the Petitioner No.1’s [IBF] members shall be forced to upload their amended Reference Interconnect Offers (“RIO”) on their respective website and new contracts would come into effect creating third party rights with over 100,000 entities, the rollback whereof would be impossible,” Indian Broadcasting Foundation had said in its petition yesterday.
The court today also asked TRAI to file its response to the petition submitted by the IBF by January 20.
POSITIVE FOR TRAI?
The absence of a stay order can be seen as a positive development for TRAI in its attempts to ‘unbundle’ channels sold in the market.
At present, most subscribers are compelled to buy channel packs — instead of picking and choosing the channels they want — due to the high cost of individual channels.
TRAI introduced the new rules with the aim of bringing parity between the cost of individual channels and their packs.
At present, the standalone price of many popular channels are 100%-150% higher than the price at which they are available as part of various packages or bouquets.
TRAI’s new rules are intended to bring both prices in line — so that consumers can go for individual channels if they like, or channel packs, if they prefer that.
However, big broadcasting companies — who operate 50-70 channels each — are opposed to the idea of promoting individual channels, as they feel that some of their weaker channels will find no takers in such a scenario, and have taken TRAI to court.
They have raised various arguments in favor of not driving consumers towards buying channels one-by-one, and for encouraging them to purchase entire packs instead.
“…the Amended Provisions are based..on a flawed assumption that bouquet pricing is detrimental to the interest of consumers…Aggregating many preferences helps increase the subscriber base thereby reducing the price for consumer. Yet, no consideration has been given to this important factor, which is essential to determine bouquet pricing…
“By way of example children may have interest in watching cartoons or animation, adults may want to watch news or sports, or general entertainment channels, and elders may have interest in religious channels. Hence, a normal Indian family is likely to choose one or more bouquets that would provide all such genres of channels as opposed to choosing a-la-carte channels of each category,” they said in their petition on Monday.
On the other hand, the regulator, consumer organizations and cable operators have taken the opposite position.
They argue that broadcasters are tying (bundling) their popular and non-popular channels closely together, so that anyone who wants to watch a popular channel is forced to buy the broadcasters’ non-popular channels as well.
This, according to TRAI and several consumer rights organizations, amounts to forced feeding of channels and comprise non-transparent and anti-competitive behavior.
TRAI has also argued that by doing so, big broadcasters who operate 50-60 channels each can effectively soak up most of the carrying capacity of cable and DTH networks, making it difficult for smaller broadcasters — who have only a handful of channels — to find a place on these networks.
“..the issue is that it is killing the similarly placed and regional channels by creating a non-level playing field,” TRAI chairman RS Sharma said after introducing the amendments earlier this month.
“The treatment should be the same for all. There are 328 more broadcasters who are dying because of a few broadcasters. Because you say that you have a powerful channel and a consumer will have to forcefully buy 10 more channels with that. Smaller broadcasters cannot offer that and you fill the capacity with your 10s of channels,” he said.
A stay order today would have thrown the whole process of introducing the new, amended rules into disarray and effectively quashed it for the short-to-medium term.
The original tariff order, scheduled to come into effect in September 2017, had to be put deferred to early 2019 after similar legal challenges that resulted in a stay, and a prolonged legal challenge.