Prasar Bharati Cannot Re-Transmit Live Sporting Events To Pvt Cable Operators , Says SC [Read Judgment]

The Supreme Court on Tuesday held that Prasar Bharati cannot engage in free transmission of the signals of live sporting or cricketing events, received from content right holders/ owners, to cable operators.

“…under Section 3 of the Sports Act, 2007, the live feed received by Prasar Bharati from content rights owners or holders is only for the purpose of re-transmission of the said signals on its own terrestrial and DTH networks and not to Cable Operators so as to enable the Cable TV operators to reach such consumers who have already subscribed to a cable network,” said a bench of Justice Ranjan Gogoi and Justice Navin Sinha.

The apex court said so while dismissing the appeals of the Centre, Prasar Bharati and Home Cable Network Private Limited against the decision of the Delhi High Court that the live broadcasting signal shared by ESPN / STAR, by virtue of Section 3 of the Sports Act with Prasar Bharati, shall not be carried in the designated Doordarshan channels under the must-carry obligation cast by Section 8 of the Cable Television Networks (CTN) Act on cable operators.

The high court’s order had come on several petitions moved by the BCCI, Nimbus Communications Ltd, ESPN Software India Pvt Ltd and Star India Pvt Ltd.

Their case was that the BCCI is the content rights owner of cricketing events. It has sold these rights to ESPN / STAR, which, in turn, sends the live feed in an encrypted form to its satellites. From the said satellite, the feed is sent to its own channels (ESPN / STAR Sports, STAR Cricket, STAR Sports 2, STAR Cricket HD and ESPN HD) for distribution either through their own DTH networks or through cable operators. In either eventuality, they are subscribed services.

Alongwith signals sent through their own distribution channels, ESPN / STAR shares the signals with Prasar Bharati in an encrypted form. Prasar Bharati re-transmits the signals in an encrypted form to its satellite, which, then streams that signal to three different networks -- the DTH network of Prasar Bharati, the DD Kendras (terrestrial networks) and private cable operators through the must-carry obligation stipulated under Section 8 of the CTN Act.

A battery of lawyers like senior advocate Harish Salve, P Chidambaram and Gopal Jain assisted by advocate Ruby Singh Ahuja, partner at Karanjawala, successfully argued that by this arrangement, cable operators have access to the broadcast of sporting events through two different channels. One through the channels of ESPN / STAR, and the other through the channels of Doordarshan. While, the former is to be paid for, the latter is free. This, according to ESPN / STAR, has hit them in two ways -- reduced advertisement revenue and reduced subscription revenue.

The Supreme Court considered various provisions of the Sports Act and the CTN Act.

It noted that Section 8 of the Cable Act, 1995 was enacted to obligate cable TV operators to carry news and information concerning the developments of the country, government policies and other such related matters even to all such households who may have availed of cable services. It imposes an obligation on the cable operators to carry/transmit such Doordarshan channels or the channels operated by or on behalf of Parliament, as may be, notified in the Official Gazette.

Under Section 3 of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007,  respondent Nos. 3 and 4 (ESPN and Star India, respectively) are obliged to share live broadcasting signals of sporting events of national importance with Prasar Bharati for retransmission of the same through its terrestrial and Direct-to-Home networks.

As DD 1(National) is one of the channels mandatorily required to be carried by the cable operators (due to its maximum reach) and the live telecast of cricketing events, which the content rights owners/ holder is obliged to share with Prasar Bharati under Section 3 of the Sports Act, 2007, is retransmitted through DD 1(National), the cricketing events are telecast to millions of viewers by cable operators, who otherwise charge the subscribers. By virtue of the aforesaid arrangement, cable operators do not have to subscribe to the specific sports channels of the respondents as they are getting the live feed of cricketing events free of cost.

“Though much argument has been advanced as to whether Section 3 of the Sports Act, 2007, is expropriatory in nature, we have no hesitation in holding the said provision of the Act to be of such a nature inasmuch as it curtails or abridges the rights of a content rights owner or holder and television or radio broadcasting service provider, as may be.

“Sharing of revenue between the content rights owner or holder and the Prasar Bharati envisaged by Section 3(2) of the Sports Act, 2007, would hardly redeem the situation to take the Sports Act, 2007, out of the category of expropriatory legislation. Section 3 of the Sports Act, 2007, therefore, has to be interpreted very strictly,” the apex court said.

“Not only we do not find in the provisions of Section 3 of the Sports Act, 2007, any recognition of the requirement stipulated in Section 8 of the Cable Act, 1995; the plain language of the said provision i.e. Section 3 of the Sports Act, 2007, makes it clear that the obligation to share cast on the content rights owner or holder, etc. with Prasar Bharati is to enable Prasar Bharati to transmit the same on “its terrestrial and DTH networks”. If the legislative intent was to allow Section 3 of the Sports Act, 2007, not to operate on its own language but to be controlled by Section 8 of the Cable Act, 1995, there would have been some manifestation of such intent either in Section 3 of the Sports Act, 2007 or in Section 8 of the Cable Act, 1995 (by an appropriate amendment thereto).

“In the absence of any such legislative intent it will only be correct to hold that Section 3 of the Sports Act, 2007, operates on its own, without being controlled by any of the conditions or stipulations contained in Section 8 of the Cable Act, 1995,” the Supreme Court said.