Channel Pricing Not Perverse, Cable Operators Themselves Agreed That 2020 Regulations Are Unworkable: TRAI Tells Kerala High Court

The Telecom Regulatory Authority of India (TRAI) told the Kerala High Court on Wednesday that the proposition of the cable operators to impose the price limit of Rs. 12 on all channels irrespective of whether it was part of a bouquet or not was a drastic measure, which the regulator had decided not to implement for good reason. 

"Their proposal was rejected for good reason. These reasons have not been challenged before this court by them. In my submission, TRAI has rightly not followed it. We have continued and compelled broadcasters to bring down driver and popular channels to below Rs.19. Therefore, there is no perversity at all and nothing manifestly arbitrary," the Single Judge Bench of Justice Shaji P. Chaly was told. 

The Court was continuing its hearing on the AIDCF's plea challenging TRAI's new Tariff Order, under which broadcasters have increased channel prices for cable TV operators for inclusion in bouquet from INR 12 to INR 19 per channel. AIDCF had moved an application seeking urgent hearing following issuance of disconnection notices by the Indian Broadcasting and Digital Foundation (IBF) on failure to sign new interconnection agreements with revised prices.

Read AIDCF's arguments here.

Senior Advocate Rakesh Dwivedi, appearing on behalf of TRAI, continued his pleadings from the previous day. 

He informed the Court today that the SLP before the Apex Court had been withdrawn when, "across the board, every stakeholder felt that 2020 Regulations had become unworkable, and asked for fresh consideration".

[Under 2020 Regulations, prices of most popular channels including sports channels were enhanced beyond Rs. 19/-per month. All such channels are priced beyond Rs. 12/- per month were kept out of bouquet and were offered only on a-la-carte basis.]

Thus, a Committee had been formed under aegis of TRAI including representatives of IBF (broadcaster federation), AIDCF, and DTH Association to deliberate on the issues and suggest a way forward, the Senior Counsel submitted.

He added that during the meeting of the said Committee on December 23, 2022, all the stakeholders expressed the need to immediately review two critical issues, namely review of ceiling of Rs. 12 on MRP of paid channel for including it in a bouquet; and review of discount on MRP of some a la carte paid channels forming part of bouquet.

The Senior Counsel submitted that until December 2022, all the stakeholders had decided not to implement the 2020 Regulations, and the position of 2017 (prescribing ceiling of Rs. 19) had been agreed to be implemented. "AIDCF has themselves already declared that 2020 framework is unworkable but now they are asking before this court for it to be restored," he argued. 

The senior counsel added that there were two solutions which could have been adopted.

"One was to restore the price of Rs. 19 which everybody was agreeing and put pressure on the broadcasters to bring popular channels below Rs. 19 so that the bouquets don't fail, and the bouquets are effective and reach consumer. This was one solution which we have adopted," Senior Advocate Dwivedi said. 

On the other hand, he pointed out that the petitioner's solution had been to cap all channels at Rs. 12, which had been rejected 'for good reason'. 

He thus submitted that there was no perversity or manifest arbitrariness involved, and that the situation did not warrant the grant of any stay. 

"Consequence of granting stay would mean 2020 regulation will become operative, which all stakeholders had agreed is not workable," he concluded.

Significantly, as the bench was about to rise, Senior Advocate Mukul Rohatgi appeared for Star Private Limited, seeking an opportunity of hearing. He submitted that though the broadcasters' disconnection notices have been challenged by the petitioners, they were not made a party to the petition. This alone is a ground to dismiss the petition, he said.

Counsel for Sony channel also appeared before the Court and submitted that the petition is not maintainable in view of Section 14 of TRAI Act, which confers jurisdiction of the matter upon TDSAT.

The Court indicated that it may pass a final order in the petitions after hearing all the stakeholders. The matter has been posted for further consideration at 3.30 P.M. tomorrow.

Case Title: All India Digital Cable Federation & Anr. v. Telecom Regulatory Authority of India & Anr.