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SC dismisses broadcasters’ plea against TDSAT order in NSTPL case relating to RIO

NEW DELHI: Broadcasters suffered a major setback as the Supreme Court dismissed their appeal against the TDSAT’s 7 December judgment mandating RIO as the starting point for negotiations between them and the distribution platforms.

The appeals of the Indian Broadcasting Foundation (IBF), Star India and Taj Television challenging the Telecom Disputes Settlement & Appellate Tribunal’s (TDSAT) order were dismissed after being admitted and heard by the apex court.

With the SC dismissing the appeals, the TDSAT judgment becomes final. The TDSAT’s order had also stated that Reference Interconnect Offer (RIO) must reflect not only the rates of channels but also the different bouquets in which the broadcaster wishes to offer its channels for distribution along with the rates of each of the formation or bouquet.

The matter traces back to the dispute between headend-in-the sky (HITS) operator Noida Software Technology Park Ltd (NSTPL), which operates under JAINHITS brand, and broadcasters Star India and Taj Television.

The broadcasters were represented by a battery of top lawyers including P Chidambaram for IBF, Amit Sibal and Gopal Jain for Star India, and Nageswara Rao for Taj. NSTPL was represented by KK Venugopal and Vivek Chib along with Sandeep Ladda.

Appearing on behalf of the IBF, senior counsel P Chidambaram said that the TDSAT order infringes on the broadcasters’ right to enter into mutual agreement under freedom of contract. He argued that broadcasters should be allowed to enter into mutual agreements.

L Nageswara Rao and Amit Sibal also made the same argument stating that by mandating agreements only on the basis of RIO, the tribunal is curtailing the freedom of contract. They also argued that the TDSAT judgment is flawed as the tribunal has tried to rewrite the regulation. The judgment, they said, also violates the Copyright Act.

Notwithstanding the argument put forth by the senior counsels, the bench comprising Justice Anil Dave and Justice Adarsh Goel remarked that the broadcasting sector is governed by the regulatory framework and everyone has to abide by that. They also said that the TDSAT has not come up with a new set of regulations and that it has only interpreted the prevailing regulation.

Earlier, the Delhi High Court had dismissed Star India’s petition against TDSAT orders in the same matter contending that the petition is not maintainable as the broadcaster has an alternative remedy to appeal in the SC. Subsequently, the IBF and Taj, along with Star, challenged the TDSAT order in the SC.

NSTPL had initially moved the TDSAT with the grievance that MediaPro, the erstwhile distribution joint venture between Star DEN and Zee Turner, is discriminating against it by denying it the supply of signals. After MediaPro split, Star India and Taj Television, the distribution arm of Zee, became the respondents in the case. The matter concluded with the TDSAT’s landmark judgment on 7 December.

The TDSAT judgment will come into force from 1 April. However, if the Telecom Regulatory Authority of India (TRAI) issues any new regulations before that date, those regulations will be binding on the broadcasters.

TRAI recently issued a consultation paper to develop a comprehensive tariff structure for platforms. In the consultation paper, the broadcast sector regulator discussed what price models would be suitable at the wholesale level in the broadcasting sector, whether there is need to regulate carriage fee, marketing fee and placement fee, and separate tariff for niche and HD channels. The last date for sending comments and counter comments on the consultation paper is 4 and 18 March.

Snapshot of the TDSAT judgment

  • RIO would form the starting point for negotiations between broadcasters and platforms.
  • RIO must reflect the rates of channels and bouquets.
  • A la carte rate and the bouquet rates must abide by the ratio mandated in Clause 13.2A.12.
  • RIO must clearly spell out any bulk discount schemes or any special schemes based on regional, cultural, or linguistics considerations.
  • The RIO must enumerate all the formats along with their respective prices in which the broadcaster may enter into a negotiated agreement with any distributor.
  • The judgment shall take effect on 1 April 2016.
  • Broadcasters would issue fresh RIOs in compliance with the interconnection regulations within one month from the operationalisation of the order.
  • TRAI should frame a comprehensive code for the broadcasting sector.
  • There would be an option to undertake a comprehensive restructuring of the regulations.
  • In case TRAI issues any fresh regulations before 1 April 2016, the broadcasters would be obliged to execute agreements on that basis.
  • In case no fresh regulations are issued by TRAI, this judgment and order would come into force from the aforesaid date.
  • HITS operator is akin to a national MSO and therefore it will be governed by the same commercial terms for an interconnection arrangement as a national MSO

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