Broadcasters’ body moves Supreme Court on Bombay HC’s NTO judgment

The Indian Broadcasting Foundation has moved the Supreme Court against the Bombay high court’s verdict upholding Telecom Regulatory Authority of India (Trai’s) new tariff order (NTO 2.0) that came out late last month, said two people familiar with the development. Bombay high court’s observation that broadcasters have a right to freedom of speech and expression but it is not absolute, infringes on their fundamental right to freedom of speech, they said.

The Indian Broadcasting Foundation (IBF), a unified representative body of television broadcasters in India, had moved the Bombay high court against Trai’s amended new tariff order (NTO) soon after it came out in January 2020. Meanwhile, the telecom regulator had filed caveats in all major high courts against issuing a stay without hearing what it has to say in the matter. Broadcasters that had come together under the IBF umbrella to take on Trai included Star India, Zee Entertainment Enterprises Ltd, and Sony Pictures Networks.

According to the new tariff order (NTO), consumers could choose the TV channels they want to watch and pay only for them at maximum retail prices (MRPs) set by broadcasters, instead of the pre-set bouquets offered earlier. The new tariff order was expected to make channels cheaper for the consumer and offer more choice. However, on ground, the opposite happened as the cost of like-to-like channel options went up.

To bring down the cost of entertainment for the end consumer, Trai had announced amendments to the NTO on 1 January, 2020. As part of the new amendments, Trai reduced the cap on the MRP of individual channels, which can form part of any bouquet, to Rs. 12 from Rs. 19 per month, which the IBF said had not been backed by any logical rationale or consumer insight. The regulator also sought to impose twin conditions for bouquet formation, effectively introducing a cap on bouquet pricing, which broadcasters felt would limit the number of channels in the bouquet and reduce the value delivered to consumers.

By upholding NTO 2.0, though it did strike down one of the pricing conditions, media experts said the Bombay high court judgment would essentially compel broadcasters to either lower prices of channels offered on a la carte basis or reduce the number of channels they offer as part of a bouquet. The resultant possible shift by customers to a la carte channels (because of lower prices) would lead to greater precedence for mass-driven channels and not bode well for niche, English language or infotainment genres.

“While there are subscribers for niche channels, since visibility and acceptability of these is relatively lower compared with GECs and sports channels, uptake has traditionally been more via bouquets than a la carte offerings,” Abhishek Malhotra, managing partner, TMT Law Practice said. There will be a substantial challenge for broadcasters in case the judgment is not stayed or set aside, Malhotra added, primarily because they will have to entirely rework the business of offering channels, which will impact their revenues, and in turn, the revenues of creators of content who are dependent upon them for sustenance. Live Mint