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TRAI tariff order upheld by third judge of Madras High Court

Justice M M Sundresh supported the findings of Chief Justice Indira Banerjee following which the majority judgment of upholding the TRAI's recommendations will prevail

The Madras High Court on Wednesday upheld Telecom Regulatory Authority of India (TRAI) regulations preventing broadcasting companies from mixing free-to-air channels with pay channel in bouquets.

A two-judge bench headed by Chief Justice Indira Banerjee, which had delivered a split verdict on the matter on March 2, referred to a third judge the petitions challenging TRAI's regulations.

In his 150-page judgment on Wednesday, the third-judge, Justice M M Sundresh, supported the findings of Chief Justice Banerjee following which the majority judgment of upholding the TRAI's recommendations will prevail.

Passing orders on the petitions filed by Star India Private Limited and its subsidiary Vijay Television Private Limited, the Chief Justice had upheld the impugned regulations, the tariff order on pricing and packaging of TV channels offered in a bouquet and a cap on channel prices.

The Chief Justice, however, held as "arbitrary" the clause putting a cap of 15 per cent on the discount on the maximum retail price (MRP) of a bouquet and said it was "not enforceable".

In his dissenting judgment, Justice Sundresh struck down various provisions in the tariff order which touch upon content of the programmes of broadcasters as not in conformity with the parent Telecom Regulatory Authority of India Act.

After hearing senior advocates Abhishek Manu Singhvi, P Chidambaram and Gopal Jain for petitioners and that of TRAI senior counsel P Wilson, the third judge concurred with the findings of the chief justice.

"Suffice it is to state that TRAI Act involves regulation of airwaves and frequencies being public properties, touches upon various stakeholders with primacy to the public interest.

"To put it differently, the general public is the king, being the subscriber whose interest should be guarded and protected under the Act as a prime factor. TRAI is thus obligated to take adequate measures as mandated by the statute," Justice Sundresh observed.

Wilson said that by virtue of the majority ruling that the regulations and the tariff orders are constitutionally valid and intra vires of TRAI Act, the entire broadcasting regime stands completely changed from today. Broadcaster need to declare in the public domain their free-to-air channels and the MRP of their pay channels.

A broadcaster cannot now discriminate against any distributor, and the pay channel price should be uniform to all. The terms of reference of the Interconnect Offer should be transparent and uniform to all distributors and the price of a la carte channels shall not exceed Rs 19, if the same is offered in a bouquet, he said. Further, 100 free-to-air channels should be offered at Rs 130 per month.

The price of pay channels shall be transparent. The regulation fixes a maximum 20% fees on MRP for distributors, with outer limit of 15% of discount.

However, the CJ in her March order had struck down this 15 per cent cap on discounts, Wilson said.

The petitioners challenged the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017 and the consequential Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017.

Contending that the impugned order and regulations were unconstitutional and ultra vires of the provisions of the TRAI Act, 1997 in as much as they were beyond the scope of the jurisdiction of the regulatory authority, they sought to quash the same.

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