AIDCF Members Not Complying With Statute, Only Seek To Enforce Their Commercial Interests: Star Network Tells Kerala High Court

Broadcaster Star India Pvt. Ltd. on Thursday told the Kerala High Court that the All Indian Digital Cable Federation (AIDCF), which has challenged TRAI's order to increase channel prices for cable TV operators, is only trying to pursue its members' commercial interest.

AIDCF have argued that increase in prices would burden cable subscribers while broadcasters pocket crores of profit.

Senior Advocate Mukul Rohatgi, appearing for Star however argued that none from the public had approached the court raising such grievance. He submitted that it's a purely commercial dispute where cable operators, who derive a commission being the middlemen, were only looking to further their interests.

"Under the Regulation, they get 130 rupees per consumer per box per month. Even channels which are free to air are being provided and 130 rupees is being charged. The real game is not 19 or 12 because they lose money on that, but they feel their subscriber base should increase and there will be more Rs. 130 boxes per month per house. That is the real case. This is their commercial interest", the Single Judge Bench of Justice Shaji P. Chaly was told. 

Meanwhile, reports surfaced later last night that petitioner-members agreed to sign new interconnection agreements and broadcast signals are being restored.

The Court was continuing its hearing on the AIDCF's plea challenging TRAI's new Tariff Order (NTO 3), 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.

Rohatgi submitted that disconnection notices were issued to the petitioner's members since they had failed to sign interconnection agreements, in violation of the prevailing law.

He added that the statutory exercise of power by TRAI in issuing NTO 3 can only be questioned on 2 grounds, which are firstly, lack of jurisdiction in authority, and secondly, violation of fundamental rights which stroke arbitrariness, neither of which was the case here.

"It is nobody’s case that Mr. Dwivedi’s client (TRAI) has no power to make the Regulations. The only ground available is Article 14 since Article 19 cannot be applied as their business is going on, and their business is regulated. Therefore, the only ground can be arbitrariness. It would be arbitrary if price was increased to Rs. 10,000. That would deprive the public of watching TV and violate their rights under Article 19(1)(a). But when it's Rs. 19 or Rs. 29 or Rs. 15, the petitioners don't have a say. We are bearing production cost and providing signal. They don't really do anything", he submitted.

Rohatgi added that matters relating to economic policy, pricing, quotas, taxes, and so on are matters that are best left to the expert or the regulator on which Parliament has placed power, and that the only exception in that regard is if it is wholly perverse or arbitrary.

He further submitted that the argument that Rs. 12 should come back was not within limit of petitioners, but within the limit of the authority.

"Their prayer is virtually to remove this Rs. 19 and have status quo ante of Rs. 12 which was never implemented. But if it is status quo, it will still go back to Rs. 19. They had moved different HCs apart from Kerala. I have got info from Karnataka, Punjab, Telangana and Calcutta. Notices issued and replies to be filed, but there is no interim order in any of these HCs. In this view of the matter, I respectfully submit that there is no reason for this Court to interfere in matter of price fixation and Your Lordship may be pleased to dismiss the petition," Rohatgi submitted. 

Senior Advocate Maninder Singh, appearing on behalf of Indian Broadcasting and Digital Foundation (IBF) told the Court today that Distributors of TV Channels (DBOs) are only intermediaries.

"If I have to recover every penny which I spend on taking the content, my channel cost may be Rs. 100 or 200, but they are capped at Rs. 19. Maybe they are free and some are between Re 1 or Rs. 2 or Rs. 3. So how do I recover my money? I recover my money, broadly, 70% from booking advertisements, and 30% from subscription charges which is capped at Rs. 19". 

He pointed out that in the case of content of signal of IPL or world cup, the prices are to the tune of Rs. 50 thousand crores. He thus submitted that the intermediaries have nothing to do with costing. 

The senior counsel also stressed that the price cap of Rs. 19 which started in 2017 had continued till date. 

"It is entirely mischievous to say that if you do not issue order, 6 Crore people stand to loose right to watch TV programme. My respectful submission is that the regulatory authority has fixed the Tariff under Section 11(2), it has issued regulation under Section 13 to comply with that, thereafter 95% compliance have been obtained. The DBOs are only intermediaries and have no say in the Tariff fixation of broadcaster, and 95% having achieved, they cant be left in such a manner to not to at least execute the agreement," he submitted. 

Senior Advocate Gopal Jain appearing on behalf of Sony Pictures informed the Court that Kerala Communicators Cable, one of the petitioners in the matter, had already agreed to comply with NTO 3. Similarly, 3 of 9 members of AIDCF also conceded.

He submitted that as there had already been over 97% compliance, the clock cannot be turned back. "In the garb of an interim order, they are seeking to implement a new regime, since this Rs. 19 has continuously been in place", he submitted. The senior counsel submitted that the petitioners were only seeking to steal an unfair commercial advantage through the proceedings. He added that when there was already an expert statutory body under the Act itself (TDSAT), the Court could not entertain such a petition. 

The matter has been posted for further consideration at 4PM today. 

Read previous reports here:

Regulator Cannot Remain Mute Spectator To Broadcasters' Perverse Pricing: Cable TV Operators Tell Kerala High Court; TRAI Opposes

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

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