TRAI asks SC to set aside Madras HC decision to quash 15% discount clause

MUMBAI: The Telecom Regulatory Authority of India (TRAI) has moved the Supreme Court seeking the quashing of Madras High Court judgement and order dated 2 March 2018 and 23 May 2018 that held the 15% cap on the discount of MRP of a bouquet as arbitrary and not enforceable.

The regulator has moved the apex court as there is confusion in the industry whether the third proviso to the clause 3(3) of the tariff order is legally valid or not as the Madras High Court had set aside the clause by terming it invalid while the Supreme Court had upheld the entire tariff order.

In its petition before the Supreme Court, the authority has argued whether the striking down of the 15% discount cap on bouquet pricing is sustainable in the light of the findings rendered by the apex court in its judgement on 30 October.

On the other hand, the apex court in its judgement dated 30 October had held that the TRAI has the authority of frame tariff order and regulation. It had also held that the tariff order does not affect content. It further stated that the TRAI Act and Copyright Act operate in different fields.

The regulator has argued that the Madras High Court has committed a grave error by holding 15% discount cap on bouquet rates as arbitrary and non-enforceable as the scope of the challenge before the HC was the power and jurisdiction to frame the tariff order and the interconnection regulation.

Justice M Sundar had struck down the clause on the ground that affects the content of the broadcasters while Chief Justice Indira Banerjee had noted that the cap is not in conformity with TRAI Act.

The TRAI petition further stated that the third judge of the Madras HC had erred by not deciding on the issue despite the difference of opinion among the judges.

Star India’s petition against the tariff order and regulation had gone to a third judge after the two-member bench of Justice M Sundar and Chief Justice Indira Banerjee had given a split verdict.

TRAI contended that the 15% cap on discount gives a level playing field to the broadcasters and distribution platform operators (DPOs). It also reasoned that the broadcasters will arbitrarily and discriminatorily resort to heavy discounting on the bouquets as compared to the MRP rates.

This, it argued, will result in perverse pricing of bouquets vis a vis individual channels. It also stated that the reference interconnect offer (RIO) being filed by the broadcasters reveal this trend.

The regulator pointed out that the discounts on bouquets are generally more than 50% which is unreasonably high and prone to distortion.

It further stated that there is no ceiling on channels that are offered on a la carte and the broadcasters are free to price their channels which are offered only on a la carte basis.

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