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Big relief for broadcast sector as Bombay High Court strikes down second part of TRAI’s twin pricing conditions in NTO 2.0

However, the court has upheld the constitutional validity of the New Tariff Order

Bombay High Court has struck down the second part of twin pricing conditions of the amended New Tariff Order (NTO 2.0) by the Telecom Regulatory Authority of India as unconstitutional while upholding the constitutional validity of the New Tariff Order.

NTO 2.0 prescribed price ceilings and contained twin pricing conditions of which the second part was struck down as unconstitutional. The twin pricing conditions were:

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1. The sum of the a-la-carte rates of the pay channels (MRP) forming part of a bouquet shall in no case exceed one and half times the rate of the bouquet of which such pay channels are a part.

2. The a-la-carte rates of each pay channel (MRP), forming part of a bouquet, shall in no case exceed three times the average rate of a pay channel of the bouquet of which such pay channel is a part.

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A High Court bench led by Justice A A Sayed had completed the final hearing in October last year on pleas by TV broadcasters challenging the new tariff rules (NTO 2.0) published by the authority in January, 2020.

During a detailed hearing on September 30, the bench had asked whether TRAI had placed twin conditions for consultation. The bench had noted that more than 90% bouquets in the market are DPO (distribution platform operator) bouquets, which do not seem to be under the same restrictions as applicable to broadcasters’ bouquets. It asked TRAI's counsel to explain how DPO bouquets are bound by the same restrictions applicable to broadcasters.

Further, giving the example of NTO 1.0, which was implemented without a discount cap on the formation of bouquets by broadcasters (because of it being struck down by court), the bench had asked whether NTO 2.0 (2020 amendments) could be implemented without some of the provisions.

The interim statement of ‘no-coercive action’ by TRAI against the non-compliant broadcasters which had been continued till the pronouncement of judgment was continued for another 6 weeks.

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