Madras High Court stays Trai's right to decide TV tariffs

On December 23, 2016 the Madras High Court essentially froze the Telecom Regulatory Authority of India’s (Trai) powers to fix television prices. If the order is held up in further appeals it could transform the Rs 54,220 crore Indian television industry. It will mean more programming variety for audiences, freedom to do business and better margins for the world’s second largest TV home market.  

In October 2016, the Trai issued a consultation paper on a draft tariff order. The order essentially delves deep into the business to come up with seven genres – devotional, general entertainment, kids et al – under which broadcasters will have to slot their channels. Broadcasters cannot change the genre within six months of declaring it without informing the authority, trade and consumers about it. It also prescribes a maximum price for each genre – Rs 12 for a general entertainment, Rs 7 for a kids’ channel and Rs 5 for a news channel and so on. 

In December this year the estimated Rs 11,000 crore Star India and its Vijay TV filed a petition against the Department of Industrial Policy and Promotion, Department of Telecommunication, Ministry of Information and Broadcasting and Trai. It questioned the Trai’s authority to do this since it was anointed broadcaster regulator which would regulate ‘carriage’ in 2004. Content is beyond its remit. Star’s petition states that Trai which was constituted under the Trai Act (1997) and its tariff orders and regulations for ‘broadcasting services’ encroaches on the statutory rights that broadcasters enjoy under the Copyright Act of 1957. 

These laws are based on international treaties to which India is a signatory. Implementing the order would have the effect of regulating the content creation, generation, exploitation, licensing et al which falls under the Copyright Act. The Madras High Court has asked Trai to maintain status quo till the jurisdiction issue is settled. The next hearing is on January 12 this year.  

Price regulation based on commodity oriented telecom has long been a bone of contention between broadcasters and regulators. When it began in 2004 there were several arguments for price regulation the biggest being the mess in cable, practically the only technology offering TV signals then, say analysts. India now has five competing technologies, over 800 channels and the internet.