Split verdict in DTH pricing case

While Justice M Sundar was of the view that some of the challenged provisions touching on content was not in consonance with the TRAI Act and hence was liable to be struck down, the Chief Justice differed with his view. However, she opined that the 15 per cent cap on discount of pay channels was not enforceable. 

The matter is now set to be referred to a third judge and since the Chief Justice has delivered the dissenting judgment, the next available senior judge will decide on the third Judge. 

As per TRAI’s regulation, the sum of the individual prices of all channels contained in a pack cannot exceed the pack price by more than 17.65 per cent. The regulations also included that any bouquet offered should not contain any pay channel where the Maximum Retail Price (MRP) is more than Rs 19. 

There are also other clauses which say that the MRP of a bouquet should not be more than 85 per cent of the sum of a-la-carte MRP of pay channels constituting the bouquet. There are some other caps which say that discounts of MRP of a bouquet should not exceed 15 per cent. 

The move is aimed at preventing consumers from being forced to buy channels they don’t want, and to give them the freedom to pick and choose the channels they want to subscribe to. But, this was challenged by Star India on the basis that the jurisdiction of TRAI to regulate and fix tariff is limited to carriage or ‘means of transmission’ and therefore it cannot be extended to ‘content’ which according to the petitioners is governed by the Copyright Act, 1957. 

Justice M Sundar, while drawing an analogy with different types of roses with varying prices being sold as a boquet, said, “It is common knowledge that the cost of production or cost of procuring various programmes will vary depending on artist, producer, nature of production and many other determinants.  Therefore, the TRAI while in one breath says that they are not regulating content, in the same breath compels the broadcaster to sell a channel at a particular price in a bouquet and is placing a cap on the price knowing well that the cost of content in many cases can be very high and far above the cap fixed by the TRAI.” 

“Therefore, by this very simple illustration and analogy of bouquet of roses, we have no hesitation in concluding that the impugned provisions of regulations before us have the effect of impacting and regulating content of broadcasters…,” Justice Sundar added. 

However, the Chief Justice on observing that TRAI has not fixed any upper limit or cap for the writ petitioners in pricing their channels, said, “I am unable to agree with the conclusion of Sundar that the provisions of the impugned regulation and the impugned tariff order are not in conformity with the TRAI Act. In my view the impugned provisions neither touch upon the content of programmes of broadcasters, nor liable to be struck down.” 

“However, the clause putting a cap of 15 per cent to the discount on the MRP of a bouquet is arbitrary. The said provision is, in my view, not enforceable. In my considered view, the challenge to the impugned regulation and the impugned tariff order fail,” the Chief Justice held in the order running to as many as 146 pages.