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TRAI moves SC against Madras HC order on draft tariff consultation case

MUMBAI: The Telecom Regulatory Authority of India ( TRAI) has filed a special leave petition in the Supreme Court against the order passed by the Madras High Court staying the consultation process on draft tariff order.

TRAI has argued that the matter is still under consultation stage and that it should be allowed to go ahead with the same.

The matter is likely to be listed on 16 January.

Earlier, the Madras High Court had directed TRAI to maintain status quo until 12 January, following Star India and Vijay TV’s appeals challenging the former’s power to stipulate and regulate tariff for TV channels.

The division bench of the high court had asked Additional Solicitor General G Rajagopalan to file the Centre’s response on the issue of TRAI’s jurisdiction to lay down prices.

Represented by senior counsel P Chidambaram, Star and Vijay TV had argued that the TRAI had overstretched its jurisdiction by fixing price of the content. They had also contended that the tariff-fixing exercise was a violation of Copyright Act, which deals with all aspects of exploitation and monetisation of content.

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

What 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. The high-definition (HD) channels are also under price cap. However, the 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 channel cannot 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.

The distribution platform operators (DPOs) will just 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 Rs 20 for extra 25 channels in bundles or lots.

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 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 don’t have to pay any 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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