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Madras HC adjourns TRAI tariff order case till 17 Feb

MUMBAI: The Madras High Court has adjourned the hearing in Star India and Vijay TV’s petition against the Telecom Regulatory Authority of India’s (TRAI) draft tariff order and interconnection regulation until 17 February as senior counsel P Chidambaram, who is representing the two petitioners, was not available.

Star and Vijay have challenged TRAI’s jurisdiction to fix price of content. The two parties contend that TRAI has overstepped its jurisdiction and violated the Copyright Act, which deals with all aspects of exploitation and monetisation of content.

In its reply to the Madras HC, TRAI had stated that the petition filed by Star India and Vijay TV were non-maintainable as the tariff order was still in the draft stage. It had also stated that the HC did not have the jurisdiction to hear this matter.

Meanwhile, TRAI had filed a special leave petition (SLP) in the Supreme Court which allowed the regulator to frame regulations. Once framed, the same will have to be placed before the apex court. Meanwhile, the Madras HC could continue hearing the Star and Vijay appeals, the SC had stated.

The matter was posted for hearing after four weeks.

As reported by TelevisionPost.com, TRAI had issued draft tariff order and interconnection regulation in October. It had sought stakeholders’ comments on the recommendations to make the tariff order more robust. The draft tariff order and regulations had followed an extensive consultation process by the authority involving all stakeholders.

What has rattled broadcasters like Star is TRAI’s suggestion of adopting a distribution model for TV channels in which broadcasters fix the maximum retail price (MRP) within the price cap set by TRAI for selling directly to the subscribers. High-definition (HD) channels are also under price cap, but premium channels have been excluded from price cap under the proposed new regime.

As per the genre caps prescribed by TRAI, sports channels have the highest price ceiling at Rs 19. General entertainment channels have a price ceiling of Rs 12. The ceiling for movie channels is Rs 10. Kids and infotainment channels can’t be priced above Rs 7 and 9 respectively. The cap for news channels is Rs 5 while that for devotional channels is Rs 3. The cost of an HD channel cannot exceed three times the cost of a corresponding SD channel.

Distribution platform operators (DPOs) will just act as intermediaries providing TV channels to consumers. Under the proposed new regime, DPOs will get a rental fee from the customers of up to Rs 130 for providing 100 standard-definition (SD) channels.

Additionally, the DPOs will get 20% distribution fee from the broadcasters for collection and remittance of pay channel revenue. Thus, rental fee and distribution are the major revenue streams for DPOs besides carriage fee.

Unlike the current regime, the DPOs will not get any share from the subscription fee received as subscribers will pay based on the maximum retail price (MRP) published by the broadcaster.

To level the playing field, TRAI has also regulated the carriage fee by capping it at 20 paisa per channel per subscriber per month. Further, the carriage fee amount will decrease with increase in subscription.

Broadcasters will not have to pay carriage fee if the subscription of the channel is more than or equal to 20% of the subscriber base. The distributors of TV channels may offer discounts on the carriage fee rate declared by them not exceeding 35% of the rate of the carriage fee declared.

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