Delhi HC dismisses petitions challenging DD Free Dish slot auction policy

MUMBAI: The Delhi High Court has dismissed the petitions filed by 9X Media, TV Vision, and B4U Broadband challenging Prasar Bharati’s new slot sale policy for free direct to home (DTH) platform DD Free Dish.

Disposing of the petitions and pending applications, the bench of Justice Vibhu Bakhru stated that the court does not want to enter into a controversy regarding the evaluation of the commercial potential of various TV Channels or the potential of various genres of television content.

The three broadcasters had filed the present petitions challenging the policy guidelines for allotment of slots of DD Free Dish to satellite TV channels dated 15th January and the respective disconnection notices dated 18.01.2019 sent to the petitioners informing them that the public broadcaster would conduct the 38th e-auction on 11th February.

Appearing for 9X Media and TV Vision, senior counsel Amit Sibal opposed the guidelines on four points. He submitted that the music channels were free to air channels and the petitioners were not collecting any subscription amount, thus they could not be classified in the same bucket as General Entertainment Channels (GEC) and other channels.

Second, he contended that music channels were loss-making channels and yet the reserve price of the prospective slots to such channels was higher than the reserve price for news channels.

Third, he referred to paragraph 2.3 of the guidelines, which provided that differential pricing for the genre (language) will be based on the principle of higher reserve price for the genre (language) with greater commercial potential. He submitted that the aforesaid guiding principle was not followed, in as much as, the music channels have been placed in bucket “B” along with sports and GEC channels.

He contended that the commercial potential of sports channels is greater than music channels and, therefore, classifying the same in one category is arbitrary and unreasonable.

Fourth, he contended that the commercial potential of music channels was much lower than the commercial potential of news channels and yet, the reserve price for news channels has been fixed at Rs 7 crore and music channels have been fixed at Rs 10 crore.

He also referred to the financial statement of the petitioners to contend that whereas the petitioners’ channels were loss-making, the news channels were making profits.

Lastly, he referred to the decision of the Supreme Court in Cellular Operators Association of India and Ors. v. Telecom Regulatory Authority of India and Ors.: (2016) and contended that since no meaningful consultations had been held with the petitioners, the impugned guidelines were arbitrary and unreasonable.

The bench noted that the contention that the guideline fall foul of Article 14 of the Constitution of India, in as much as, the music channels have not been consulted is also unpersuasive. It also stated that the reliance placed by the petitioners on the decision of the Supreme Court in Cellular Operators (supra) is misplaced.

On Sibal’s contention that the music channels are not challenging the policy, but only the implementation thereof, the bench noted that this contention is also unpersuasive as the music channels are seeking to challenge the fixation of reserve price which itself is a matter of policy. It also stated that Para 2.3 of the guidelines only provides for one of the guiding principles. The discretion of Prasar Bharati to fix the reserve price as per its commercial assessment is not curtailed.

The bench stated that the guidelines embody a policy decision and the same would not be amenable to judicial review on merits. “Clearly, it would not be apposite for this Court to enter into a controversy as to the assessment of the commercial potential of various genres/channels. The question of fixing a reserve price is a matter of commercial discretion of the respondent. This Court cannot be called upon to enter into a controversy as to the assessment whether a news channel has a higher commercial potential than a Hindi music channel,” the court said in its order.

Prasar Bharati counsel Rajeev Sharma also pointed out that the total revenue of the petitioner 9X Media for FY18 was in the vicinity of about Rs 146.12 crore, which included Rs. 138.71 crore as revenue from operations. He submitted that the reserve price of a slot was a very small fraction of the revenue and, therefore, the said decision could not be questioned.

He also pointed out that the music channels were already paying eight crores and the reserve price was only 25% more than the existing price.

The court stated that it is unable to accept that the guidelines or the reserve price fixed thereunder would amount to disabling an entrepreneur from carrying on the business of broadcasting a music channel. It is also relevant to note that the ‘DD Free-Dish’ is not the only platform for airing or broadcasting a TV Channel and there are multiple platforms, which are now available.

“Thus, even if it is accepted that the reserve price fixed by the respondent is on the higher side, the same would not amount to excluding the petitioners from the business of broadcasting. It cannot, by any stretch, be construed as violative of Article 19(1)(g) of the Constitution of India,” the bench said.

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