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TDSAT sets aside TRAI’s tariff order for commercial subscribers

MUMBAI: The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has set aside the amendments made by the Telecom Regulatory Authority of India (TRAI) to tariff order for commercial subscribers.

The amendments to the tariff order prohibited broadcasters from providing their channels directly to a subscriber and treated commercial subscribers on a par with ordinary subscribers.

As per the tariff order, commercial establishments must be treated as normal (household) subscribers if they are providing television as an amenity (at no extra charge) to their guests/clients and that only when commercial subscribers charge their guests/clients for TV separately can there be a different tariff mutually agreed upon.

The tribunal noted that the reasons given by TRAI for putting the entire body of commercial subscribers on a par with ordinary subscribers are unacceptable.

It further said that the provision introduced for the protection and enforcement of copyrights that requires commercial subscribers who might charge their guests separately for any television programme offered at their establishments to enter into an agreement with the broadcaster at mutually agreed charges is completely unworkable.

The provision can be and is being circumvented in dozens of ways by social/sports clubs, restaurants, and similar other subscribers, the tribunal noted.

While setting aside the amended tariff order, the tribunal asked the authority to undertake a fresh exercise on a completely clean slate and issue fresh tariff orders within six months.

It also asked the authority to put aside the earlier debates based on which it has been making amendments in the three principal tariff orders none of which has so far passed judicial scrutiny.

“It must consider afresh the question whether commercial subscribers should be treated equally as home viewers for the purpose of broadcasting services tariff or there needs to be a different and separate tariff system for commercial subscribers or some parts of that larger body,” the tribunal stated.

It also asked the regulator to work on an interim arrangement in one month on the rates commercial establishments are to be charged, especially those that were excluded from the tariff protection by the seventh amendment of the second tariff order.

According to the tribunal, the seventh amendment to the second tariff order and the first amendment to the third (CAS area) tariff order were quashed by its judgment dated 28 May 2010. However, those amendments were kept alive by the Supreme Court for a period of three months from 16 April 2014, the date of the order by which time the court endorsed the tribunal’s judgment.

That period is long over and, therefore, it would not be proper to revive the tariff amendment orders dated 21 November 2006, the tribunal stated.

In consequence of the tariff amendment orders dated 21 November 2006 being taken out, the un-amended second, third and fourth tariff orders will come into play and commercial subscribers would, by default, get bracketed with ordinary subscribers.

In other words, though the impugned amendments to the tariff orders are quashed by this judgment, for practical purposes the situation will remain unchanged.

“And this is because despite two orders by the Supreme Court to consider the question of tariff in respect of commercial subscribers, within specified time periods, TRAI has not been able to produce the tariff that would satisfy judicial scrutiny,” the authority said.

Why TDSAT set aside the tariff order

The tribunal said that TRAI plainly failed to take an independent and objective view of the matter and, as a result, the tariff order makes no distinction between a home viewer and someone who uses the television programme not for personal viewing but for deriving commercial benefit from it.

The Indian Broadcasting Foundation (IBF) had challenged the amended tariff order on the ground that the tariff orders treat as equal groups of subscribers that are inherently unequal and are so recognised in their different definitions in the tariff orders.

The tribunal also observed that the impugned tariff order, breaking away from the past, reversed the regulatory scheme in treating the entire body of commercial subscribers on a par with the home viewer.

The tribunal further stated that the authority must have taken into consideration the element of the use of the broadcast, which is of considerable importance for fixing tariff for broadcasting services. It was a recurrent theme in the earlier exercises undertaken by TRAI for framing tariff.

“In our view, any exercise of fixing tariff for broadcasting services that completely disregards the user of the broadcast is bound to lead to unreasonable and inequitable results and so have the impugned amendments in the tariff orders,” the tribunal said in its order.

TRAI had mentioned two factors for putting commercial subscribers on a par with ordinary subscribers—1) the content being the same and 2) the cost to the broadcaster and the distributor being the same.

The tribunal said that the authority completely misread the Supreme Court judgment by putting commercial subscriber on a par with ordinary subscriber.

The Supreme Court judgment, the tribunal contended, does not even remotely suggest that for the purpose of tariff, commercial subscribers should be meted out the same treatment as ordinary subscribers.

The tribunal also observed that the authority itself had recognised that at the ground level ordinary subscribers and commercial subscribers were treated differently with regard to charges payable by them for receiving television signals and that it was a well-established business practice.

“TRAI never took any objection to the exclusion of the commercial establishments from the rate cards and RIOs neither submitted by the broadcasters nor took any objection in this regard by any MSO or any other commercial establishment,” the tribunal stated.

“In light of the discussion made above, we find the two amendments quite unsustainable and we are thus constrained to set aside the impugned amendment orders,” the tribunal said in its order.

Holistic view on tariff for broadcasting

The tribunal also advised TRAI to stop making any further amendments to the different tariff orders and take a completely fresh and holistic view on the question of tariff in broadcasting services.

As a result of repeated amendments, the second, third, and fourth tariff orders have become so complicated that it has become difficult even to follow the exact import of a provision without examining all the amendments made earlier in the principal tariff order, the tribunal pointed out.

“We, accordingly, expect that as the whole country is now to come under the DAS regime, TRAI will undertake a fresh exercise and come out with a single consolidated instrument covering broadcasting services,” the tribunal added.

Also Read:

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