TRAI Order: Can’t Compete Under Regulated Prices With Netflix, Multiplexes, Say Broadcasters

Broadcasters have sought an urgent interim stay or deferral of the telecom regulator’s tariff order on reduced pricing of pay channels three days before its introduction.

A two-member bench of the Bombay High Court comprising Justice AA Sayed and Justice Anuja Prabhudesai asked the Telecom Regulatory Authority of India to consult with the government over deferring the pricing cap by a month. The court will next hear the matter tomorrow.

As many as eight major broadcasting companies, cable operators and associations representing television producers had moved court seeking a stay or deferral of implementation of the tariff order. The court clubbed a petition by certain Mumbai-based cable operators with the broadcasters’ case.

While the court denied them interim relief, it found that the case was fit for further arguments. Counsel for Star India argued that broadcasters won’t be able to compete on quality with unregulated streaming platforms like Netflix and multiplex chains as they aren’t subjected to pricing caps.

Here are the key arguments made by the parties…

Star India’s Arguments
Mukul Rohatgi, the senior counsel representing Star India, sought a stay or quashing of the tariff order on the following grounds:

Jurisdictional Issue: The telecom regulator lacks specific jurisdiction to specify changes in pricing for pay channels under the “guise of public interest”. Certain powers to regulate broadcasting were provided much after the telecom regulator was constituted and it issued its first tariff order only in 2017.

Prior Court Stays: The Madras High Court had stayed a similar order by the TRAI in 2017, which was lifted last year. The telecom regulator then issued another order leading to further confusion. The high courts of Kerala and Gujarat have ruled against it.

Not A Right: The Constitution of India may grant freedom of speech and expression but it doesn’t contemplate free entertainment for the citizens.

Not Transparent: Industry surveys indicate that a majority of consumers prefer channel bouquets. Yet, TRAI didn’t consult with stakeholders over the order.

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

• In its order, the high court has found that the case was fit for arguments. The court must hear the broadcasters and either stay or defer the order’s implementation.
• A prima facie case against the telecom regulator was established by the broadcasters, tilting the balance of convenience in their favour. However, the implementation of the tariff order could cause “irretrievable injury” to their business.
• TRAI’s pricing of pay channels is based on an incorrect assumption that viewers only prefer watching general entertainment channels.
• Broadcasters rely on selling pay channels and any drastic changes would affect their financial position. Bloomberg Quint