Channel Pricing Disagreements: Kerala High Court Hears Cable TV Federation Amid Disconnection Notices By Broadcasters

The Kerala High Court today held an urgent hearing on a request made by the All Indian Digital Cable Federation which has challenged TRAI's new Tariff Order, under which broadcasters have increased channel prices for cable TV operators.

Though the matter was listed for February 22, AIDCF counsels sought an urgent hearing following disconnection notices issued by the Indian Broadcasting and Digital Foundation (IBF) on failure to sign new interconnection agreements with revised prices. It has been averred that the disconnection notices gave them only 2 days' time and that TRAI has not taken any step to address this "arm-twisting" tactic.

They seek that until the petition challenging the price hike is heard, status quo be maintained with regard to provision of signals to the consumers.

Senior Counsel Abhishek Manu Singhvi appeared for the Federation before Justice Shaji P. Chaly. Singhvi claimed that 4.8 crore consumers were affected by this move. He further wondered how TRAI could hike up the prices and implement the same over the weekend. "It is mala fide and collusive", he said. The hearing will continue tomorrow.

AIDCF is an apex body with several multi system operators (MSOs), that provide cable services to consumers. It has challenged the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Fourth Amendment) Regulations, 2022 (the 'lnterconnect Amendment Regulations, 2022'), and the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff (Third Amendment) Order (the 'Tariff Amendment Order, 2022).

The above Regulations and Tariff Amendment order increase the rate of television channels for inclusion in bouquet from INR 12 to INR 19 per channel "even though the cap of INR 12 had been fixed only vide amendments under taken on January 2020" the Federation said.

Significantly, this price cap was given effect only after June 2021, when it was upheld by the Bombay High Court.

It is thus the case of the Cable TV Federation that TRAI has taken a complete "u-turn" on the necessity of Rs. 12 price cap and has issued the impugned Regulations in an arbitrary manner, and without any justification. It is averred that such price hike will erode their subscriber base and put the local cable operators out of business.

"Respondent No.1 (TRAI) has itself noted a constant decline in the cable television sector which if not stemmed, will lead to the destruction of an industry, that provides employment to millions of people and a source of information, culture and awareness for the mass of the people. By allowing an unchecked increase in prices to the consumers the Respondent No.1 are unwittingly ensuring that there is further reduction and exodus from the cable television sector", it has been submitted. 

While TRAI’s counter affidavit claims that the increase in price will be ‘nominal in general’, the petitioner claims that this is misleading and that the consumer would have to bear huge burden of thousands of crores of rupees.

During the hearing today, Singhvi submitted that the impugned regime was introduce in November 2022, while the 2020 regime had already been extended to 2023. 

"Question is, you have a regime of 12 rupees the implementation of which you had extended. And then you are saying even before the Single Judge decides on this on Monday, without telling the Single Judge decided. I would call it contempt of court. What is the hurry? This is mala fide. TRAI just because it is pressurized by Star or other big players, it cannot do it. It is clearly pressure", the Senior Counsel submitted. 

Senior advocate Jayant Mehta also appearing for the petitioners submitted that "the regulator is sleeping like nero, capitulating to the demands of the broadcasters"

He argued that the price is hurting the consumer. Further, the irrational channel pricing will also result in subscriber erosion, making the operations of  Local Cable Operators (LCOs) unviable putting millions of jobs at risk, he submitted. 

"It is a cockeyed regulation that has been made, therefore we are concerned", the Senior Counsel submitted.  

He also pointed that, that many customers are already shifting from cable television to OTT in large numbers. As most of the broadcasters are distributing their channels on OTT platforms as well, they have other avenues to depend on for their revenue. However, the livelihood of cable operators depends entirely on its viewership, which is going to be seriously affected by the impugned regulations and impugned tariff order, he argued.  

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