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TRAI tariff order case: Madras HC dismisses MSOs from impleading, allows intervention

MUMBAI: The Madras High Court has disallowed multi-system operators (MSOs) from impleading in the TRAI draft tariff order and interconnection regulation case. Broadcasters Star India and Vijay TV had challenged the Telecom Regulatory Authority of India’s (TRAI) jurisdiction over commercial matters relating to copyright of content.

The HC bench noted that, as the union government and TRAI are part of the matter, there is no need to implead others in the matter. Earlier, the HC had rejected the Indian Broadcasting Foundation’s (IBF) application to be impleaded in the matter and asked it to file a fresh writ petition, if it wanted to.

However, the All India Digital Cable Federation (AIDCF), a representative body of the MSOs, has been allowed to participate in the proceedings as an intervener.

The AIDCF claimed that the bench has permitted it “to file all relevant material, make oral submissions and file written submissions in the main writ petition”.

On 22 February, the Madras HC only heard the impleadment application of the AIDCF. The federation was represented by senior counsels L Sundaresan and Navin Chawla.

The matter is listed for hearing on 7 March.

According to a source, the IBF will soon be filing an application seeking permission to be interveners in the case.

Earlier, the Supreme Court had adjourned the TRAI draft tariff order and interconnection regulation case until 27 March in view of the Madras HC hearing.

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.

Star and Vijay TV 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.

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 them more robust. The draft tariff order and regulations had followed an extensive consultation process 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. 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 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.

Additionally, the distribution platforms will also 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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