TRAI Tariff Order: High Court Gives No Interim Relief To Broadcasters

The Bombay High Court refused to give interim relief to television broadcasters against the Telecom Regulatory Authority of India's order dated Jan. 1 that had reduced pricing for pay channels and capped the number of pay channels bouquets that could be offered by broadcasters.

As many as eight major broadcasting companies, including Zee Entertainment Enterprises Ltd., Star India, Disney India, Asianet, TV18 Broadcast Ltd., Sony Pictures, Film and Television Producers Guild and India Broadcasting Foundation, had moved court seeking a stay or deferral of the Jan. 15 deadline for communicating revised channel pricing to consumers.

The telecom regulator opposed an interim relief to the broadcasters on the grounds that few companies were trying to scuttle a scheme that was favourable for consumers. Petitions were filed by just a few companies and hence cannot be said to represent the entire industry, the telecom regulator's counsel said.

A division bench of the Bombay High Court comprising Justice SC Dharmadhikari and Justice RI Chagla refused to defer the deadline.

Here are the key arguments made by the broadcasters and TRAI.

Why Broadcasters Opposed The Tariff Circular?

Broadcasters opposed TRAI's Jan. 1 tariff circular on the following grounds:

• The circular was arbitrary and affected their right to freedom of speech and expression.
• It stipulates broadcasters must communicate the revised pricing to consumers before Jan. 15. The deadline under the circular is contrary to TRAI's 2017 regulations which provided for a 60-day compliance deadline.
• A shorter window will create compliance challenges. In case of non-compliance, the regulator may initiate coercive action, resulting in penalties and prosecution. Similarly, TRAI can cancel or suspend their broadcasting licenses.
• The regulator didn't follow the guidelines issued by the Supreme Court in its 2017 order on the pricing of channels by broadcasting companies.
• TRAI's action to unilaterally reduce the maximum price cap to Rs 19 was “manifestly arbitrary” and derived from three-year-old market data.
• Fixing of pricing or a price ceiling of Rs 12 for à la carte channels hampered broadcasters' right to enter into commercial contracts and was made without considering the cost required for content creation.

Producers Guild's Arguments

Janak Dwarkadas, the counsel representing Film and Television Producers Guild of India, made the following arguments:

• Circulars issued by the telecom regulator are part of subordinate legislation and thus can be challenged on constitutional grounds in the High Court. TRAI had agreed for deferral of a deadline in the year 2017 after Supreme Court's order.
• TRAI's actions were patently arbitrary in nature and there's no guarantee it won't take any coercive action if broadcasters fail to comply with the circular due to the shorter deadline.
• Broadcasting companies have no option other than complying with the Jan. 1 circular.

Aspi Chenoy, the counsel representing the Broadcasting Federation, made the following arguments:

• Balance of convenience must be in the favour of broadcasters and the court must grant an order against the regulator for maintenance of status quo.
• Broadcasters may suffer “irreversible damage” if the deadline isn't deferred, while a deferral will not harm any party.

TRAI's Counter

Venkatesh Dhond, the counsel representing TRAI, opposed any interim relief to the companies. His arguments were:

• Existing practices followed by broadcasters restrict consumer choice. TRAI wasn't provided an opportunity to file a reply to the broadcaster's application.
• Broadcasters were informed in advance through the circular on the deadline of Jan. 15. This is one of the steps to ensure full implementation of the circular by March.
• TRAI's circular seeks to regulate pricing of à la carte channels. Even the apex court had noted that such a practice was “perverse” and needed regulation.
• Circular is issued for the benefit of consumers at large and cannot be challenged by a few companies.

The High Court has directed the telecom regulator to file a reply and will hear the matter on Jan. 22.