Broadcasters move HC against new tariffs for cable and digital players

NEW DELHI | MUMBAI: Top broadcasters including Sony and Star have challenged new tariff rules for cable and digital players before the Bombay High Court even as the regulator said it was forced to intervene after top five broadcasters increased their tariffs by up to 200%.

Indian Broadcasting Foundation (IBF), Sony Pictures Networks India (SPN), Walt Disney, which owns Star India, Zee Entertainment Enterprises, Reliance Industries-owned TV18 and the Producers Guild of India moved the Bombay High Court on Monday, challenging the Telecom Regulatory Authority of India’s amendments to the New Tariff Order (NTO), people aware of the development told ET.

A two-member bench of Justices S C Dharmadhikari and R I Chagla will hear the case on Tuesday.

Trai had notified the amendments on January 1and since then, has received severe backlash from the broadcasters as well as cable operators who feel that the regulator’s move is impugning on price control. The sectoral regulator, however, defended its move, saying it would increase transparency and empower consumers after broadcasters increased tariffs of popular channels, thus raising consumer bills.

“A wrong impression has been created and as a regulator, it was Trai's duty is to look into abrasions,” Trai secretary Sunil K Gupta told reporters in New Delhi on Monday. “Now, we have done some changes and hope that they (top broadcasters) will decrease prices and protect consumer interests,” he said. “If they don't take corrective action, then we'll see if a suitable action can be taken.”

Gupta said he was not aware if any broadcaster has moved to the court. “If it is so, then there is no point of having discussions if they chose to go to court rather than (have) a discussion,” he said.

Last week, the broadcasters had boycotted Trai’s invitation to meet and discuss the issue, claiming that there was no point in discussing anymore as the amendments were already notified by the regulator.

Instead, they opted to go to court.

IBF has appointed Saikrishna & Associates as the law firm for its petition while SPN has roped in Bharucha & Partners, people cited earlier. Senior partner MP Bharucha will lead the charge on behalf of SPN.

Many cable operators and their associations are also planning to take legal action, they said.

The new amendments are effective March 1. Trai chairman RS Sharma denied charges that the new rules curbed broadcaster’s freedom to price channels. “We have provided the freedom to broadcasters and they are free to price,” he told reporters in Delhi. “We have only reduced the bouquet cap to 12.”

NTO was implemented on February 1, 2019. “The framework's primary focus is empowerment to consumers,” Sharma said, adding that Trai had received a large number of representations from consumer groups. He, however, did not elaborate on how Trai reached on any of the price caps it has decided on, or any details of the consumer groups.

The regulator has been under pressure since the implementation of NTO as it failed to achieve the desired result – drop in monthly cable/DTH bills of consumers.

“We watched for about a year and addressed issues impacting consumers,” Sharma said. “Both SD and HD channels were priced higher, and we reduced the price to ?12. We have allowed 200 channels at ?130 while keeping mandatory Prasar Bharti channels out.”

In the case of a multi-TV homes, the regulator has capped the network capacity fee at 40% of the primary connection since a common infrastructure is being used for multiple TV sets. Local cable operators have decided to challenge this discount.

Trai has also limited the number of bouquets by a broadcaster to the total number of channels it is distributing.

Sharma said in the new regime, even smaller broadcasters would be able to compete fairly and take benefit from reduced network fees. Media experts, however, said the move is going to decimate the business model of small channels and networks. As per the new amendments, the broadcasters have to declare revised price of their channels and bouquets by January 15.