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Supreme Court adjourns TRAI tariff order case till 27 March

MUMBAI: The Supreme Court has adjourned the TRAI draft tariff order and interconnection regulation case until late March.

In view of the Madras High Court hearing the case, the apex court today decided to adjourn the case. The matter has been listed for hearing on 27 March.

As reported earlier, TRAI had filed a special leave petition (SLP) in the Supreme Court which allowed the regulator to frame regulations. Once framed, the same would have to be placed before the apex court before notifying.

The Madras HC, in the meantime, could continue hearing the Star and Vijay TV appeals, the SC had stated. The matter has been posted for hearing on 7 March.

Star and Vijay TV have challenged TRAI’s jurisdiction to fix content price. 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.

On 17 February, the Madras High Court dismissed the Indian Broadcasting Foundation’s (IBF) application to implead in TRAI’s draft tariff order. The IBF, however, can file a fresh writ petition.

The court will consider the All India Digital Cable Federation’s (AIDCF) and DTH operator Videocon d2h’s application to implead in the case on 22 February. The AIDCF, which is a representative body of multi-system operators (MSOs), could not complete its submissions on 17 February. The HC had also indicated that the AIDCF, if impleaded, will need to file its counter by 7 March.

As reported by TelevisionPost.com, TRAI had issued the draft tariff order and interconnection regulation in October. It had sought stakeholders’ comments on the recommendations given by the authority to make it 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; however, 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 cannot be priced above Rs 7 and 9 respectively. The cap for news channels is Rs 5, while for devotional channels it is Rs 3. The cost of an HD channel cannot exceed three times the cost of a corresponding SD channel.

The distribution platform operators (DPOs) will act as intermediaries in 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. A subscriber may request additional network capacity in bundles or lots of 25 SD channels at a rate of Rs 20 per month for subscribing to more than 100 channels.

Additionally, the distribution platforms 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 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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