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

The All Indian Digital Cable Federation told the Kerala High Court on Tuesday that TRAI's new Tariff Order, under which broadcasters increased channel prices for cable TV operators, was manifestly arbitrary. 

"The Regulator here is completely silent and has, like Gandhari, completely blindfolded itself. How long will they keep acting like Gandhari of Mahabharat, when TRAI knows that broadcasters are pushing the bouquets", Senior Advocate Jayant Mehta, appearing on behalf of the petitioners submitted before the Court today. 

The matter is being heard by the Single Judge Bench of Justice Shaji P. Chaly.

The AIDCF counsels had sought an urgent hearing in the matter, following the disconnection notices that were issued by the Indian Broadcasting and Digital Foundation (IBF) on failure to sign new interconnection agreements with revised prices. It is claimed that almost 5 crore subscribers are facing cable black out due to this move.

Senior Advocate Mehta submitted that with the issuance of the new order, the customers' choice was being continuously interfered with, by asking them to pick up bouquet and not individual channels. The counsel submitted that the cable operators were solely dependent on the the broadcaster for the product (signals), and on the customers for the revenue, unlike the broadcasters who derived their revenue from advertising and OTT platforms. 

"Customer base is consistently coming down. To ask such customers to pay more means more customers would leave. It's only logical", the Senior Counsel submitted.

He added that on an impact analysis of the impugned regulations, an increase of even Re. 1 in channel prices would result in Rs. 175 Crores additional burden on consumers and Rs. 175 crores profit for the broadcasters. 

"This is the game of the big boys, the regulator continues to remain silent. Therefore, there should be status quo ante. TRAI must ensure that there is no disruption of anybody's business", Senior Advocate Mehta urged. 

The Senior Counsel added that the petitioners had not been consulted prior to the issuance of the impugned order, even though it is mandatory. He further pointed out that when on last Friday the Court had posted the matter for hearing on Monday (i.e. yesterday), the disconnection notices were issued over the weekend itself, indicating complete disregard for the Court. 

"There has been a complete non application of mind, brazen disregard for the process of the court when the matter has already been posted for hearing", the senior counsel argued. 

He thus prayed that the Court grant the petitioner's interim prayer for the restoration of the status quo as on 17th February 2023 and resume signals. It was urged that petitioners have a prima facie case, balance of convenience lies in their favour and that irreparable injury will be caused to them if interim relief is not granted.

Senior Advocate Rakesh Dwivedi appearing on behalf of regulator TRAI on the other hand submitted that there is no prima facie case nor any balance of convenience to grant status quo ante in this case. 

"All agreements are in place with other distributors, signals are being transmitted without interruption. 80% of subscribers are already receiving at the rate of Rs.19. Since regulations are implemented for about 80% subscribers, there is no case at this stage to allow Petitioners to continue to obtain signals at Rs. 12. That will result in a case of chaos. There has to be one consistent regime", he submitted. 

The senior counsel further argued that the Madras High Court had earlier upheld the price fixation of Rs. 19. He added that the petitioners had suppressed the fact that the same was also upheld by the Apex Court when it was challenged. The Court thus questioned the senior counsel that if such was the case and Rs. 19 had been fixed since the year 2017, then why the plea has been filed in the year 2023. 

"The 2020 Regulations was a complete non starter and was never implemented. It is Rs. 19 that has been prevailing since 2017 till this Amendment by us. Even the petitioners have been working on Rs. 19. They have never worked on Rs. 12. The position is broadcasters can have a la carte channels as well as from own bouquet. Likewise distributor can also make their own bouquet channels with a la carte channels. The bouquet channels are driven by some important channels. But if those channels are priced above Rs.19, they'll go out. Thus this problem is a question of freedom they enjoy before the regulations", the Senior Counsel explained.

The matter shall be taken up for further consideration at 3.30 PM tomorrow. 

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