TDSAT rejects tariff order, cable bills may shoot up

Monthly cable and direct-to-home (DTH) bills may rise sharply as the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) today rejected a tariff order issued by the Telecom Regulatory Authority of India (Trai).

As a result of the TDSAT order, over 65 pay channels like Star One, Colors and Star Cricket would be able to raise prices, which were capped by Trai.

The TDSAT rejected Trai’s tariff order of October 2007 that had capped prices in different categories of cities based on population.

Trai’s 2007 tariff order is said to be based on an October 2004 order that had put a freeze on any increase in prices of pay channels in basic bouquets. As a result of the 2004 order, the broadcasters launched their new channels in additional bouquets, whose pricing also Trai capped subsequently.

As a result of the TDSAT’s latest order, the broadcasters would be free to raise prices of their additional bouquets that were launched after 2004, experts said.

As pricing of DTH channels was inter-linked with pricing of cable channels in non-CAS areas, any increase in prices of cable channels would directly impact prices of DTH channels as well, experts said.

The TDSAT gave its order on a petition filed by the broadcasters, including Zee, Star, Sony and Sun. The Multi System Operators (MSO) Alliance will also get affected as it stood with Trai in this case.

However, the TDSAT has asked the broadcast regulator to study afresh the issue of allowing MSOs to choose channels for distribution in non-CAS areas in the next six months.

“The basis of the TDSAT order was the fact that the regulator violated principles of transparency while enforcing the price freeze,” said a legal expert on cable-related issues.

MSO Alliance President Ashok Mansukhani termed it a day when the cable industry went four years backwards. “We will approach the Supreme Court against the TDSAT order,” Mansukhani told Business Standard. Speaking on behalf of Zee TV, A Mohan, senior executive of the Essel Group, said: “This simply means that the broadcasters can raise prices of their bouquet channels that have been launched after October 2004.”

As a result of the TDSAT’s order, MSOs will not be able to pick and choose pay channels. This means the cable companies will have to provide pay channels to consumers in complete bouquets as the retain pricing fixed by Trai will also go away.

On October 4, 2007, Trai had issued a circular proposing a price band of Rs 132-260 for cable services based on classification of cities and the number of pay channels provided by MSOs.