SC stays TDSAT order, raises rates for DTH operators

The Supreme Court today stayed the order of the broadcast tribunal TDSAT setting aside Trai's notification fixing 35% of the rates paid by cable operators for TV channels and raised the same to 42%.

A bench comprising justices R V Raveendran and A K Patnaik stayed the order of the Telecom Disputes Settlement & Appellate Tribunal (TDSAT), which had set aside Trai's notification of July 21, fixing the price.

Passing an order on December 16, 2010, TDSAT had set aside sectoral regulator Trai's notification mandating that broadcasters charge from DTH and IPTV providers only up to 35% of rates paid by cable operators for their channels.

However, the bench today increased the price band and fixed it to 42% of the cable price to be charged by the broadcasters from the DTH operators.

The bench also added that the agreements between DTH operators and broadcasters, which are already in place, shall prevail.

The apex courts' direction came over a petition filed by Trai, challenging TDSAT's order.

Broadcasters were earlier charging DTH operators half of what they got from cable operators.

On July 21, Trai had notified that a new wholesale tariff structure would be effective from September 1, 2010, whereby broadcasters can charge only at 35% of rates that they charged from normal cable operators while supplying service providers on platforms such as DTH, IPTV and HITS.

On August 23, leading broadcasters, including Zee Turner, Viacom 18 Media and Sun TV and Star Den Media Services had moved TDSAT challenging Trai's tariff order to cap wholesale price of channels to service providers like DTH and IPTV at 35% of rates for normal cable operators.

In separate petitions filed with TDSAT, ESPN Software India, MSM Discovery, Zee Turner and Star Den Media Services said the Trai tariff was not commercially viable.

The broadcasters had submitted that while fixing the tariff, Trai had acted in an arbitrary and unreasonable manner and did not consider the suggestions of the stakeholders.

Broadcasters offer cheaper rates to operators like DTH and IPTV as they can ascertain the number of subscribers of these players, which is not the case with cable services where under-reporting is believed to be very high.