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The issue of broadcasters being required to offer channels on an a la carte basis in non-Cas (conditional access system) areas has been taken to court. Set Discovery has filed a challenge in the Telecom Disputes Settlement Appellate Tribunal (Tdsat), stating that the price fixation by the Telecom Regulatory Authority of (Trai) has been arbitrary and discriminatory.[/size][/font]
Two other broadcasters are waiting in the wings to file their individual cases on the same issue, industry sources say.
This has come as a 'disappointment' for the multi-system operators (MSOs), as they had been wanting joint strategies worked out between the two wings of the industry ever since the Trai tariff order for non-Cas areas.
Set Discovery's main contention is that the upper limit fixed on the number of channels for non-Cas areas will lead to a situation where the MSOs will not give/offer channels beyond the maximum number prescribed. This in turn will compel the new channels to be offered as free-to-air (FTA) channels.
As a consequence, Set says, the tariff order enables MSOs to charge / levy a carriage fee, which is not regulated and which is tantamount to unjust enrichment of MSOs at the cost of broadcasters. It says too that the price freeze slab structure imposed by the Authority gives a handle to MSOs / LCOs to arm-twist broadcasters / new broadcasters who wish to add channels.
Among the other grounds on which the order has been challenged are as follows:
[*]The basis of the tariff order is irrational as the Authority has fixed different prices for the same content.
[*]Trai has been arbitrary and discriminatory and failed to serve the objective of fixing a proper/correct price, though it is well settled that price fixation should be based on relevant material and should be fair and reasonable and that not a minimum but a reasonable profit margin is permissible.
[*]The Authority proceeded on the erroneous premise that the market does not have sufficient level of competition, though there is sufficient competition to let market forces determine prices.
[*]The authority has failed to take into account the ground realities and the change in scenario, with the advent of various alternative addressable platforms and new channels.
[*]The authority has acted in violation of the mandatory provisions of S. 11(4) of the Trai Act.
[/list]Set has also sited the decision given by the Supreme Court in its judgment Ashoka Smokeless Coal India (P) Ltd. v. Union of India [Ref: (2007) 2 SCC 640] where it was held that prices are required to be fixed keeping in mind the market forces as in a market governed by free economy where competition is the buzzword, producers may fix their own price and that demand and supply are a relevant factor while fixing tariffs.
Set has contended that the 4 October order goes contrary to this.
The broadcaster has averred that the tariff order will have a direct bearing and impact the investments in new channels resulting in poor/low quality of programmes which will eventually affect the consumer/public interest.
"The basic function of the Authority while fixing tariffs is to collect accurate data and analyze the same to balance competing interests," it has held.
"The Authority has failed to balance interests and its tariff fixation will impact the content providers.
"It is well known that the popularity of a channel depends on the quality of its content, which in turn Is dependent on the investments made by broadcasters for developing appropriate content," Set Discovery says.
The tariff order will have an adverse impact on the level of investment, which in turn will affect the quality of programmes and eventually consumer interest.
The tariff order has failed to address the root cause of the problem in this sector which is under declaration. In January 2004 the authority had imposed a blanket price freeze/cap.
Interestingly, Set has challenged the order on the ground that the Authority has applied principles from the telecom sector to the broadcasting sector in fixing tariffs, though there is a fundamental difference between the two - both in terms of nature of business and the dynamics.
While the broadcaster has prayed that the order be quashed and in the interim, the execution of the order be stayed, MSOs say that they had been urging the broadcasters to jointly work out channel grouping and other formulations.
Indiantelevision.com's > Digital Edge > Set Discovery challenges a la carte pricing in Tdsat
Two other broadcasters are waiting in the wings to file their individual cases on the same issue, industry sources say.
This has come as a 'disappointment' for the multi-system operators (MSOs), as they had been wanting joint strategies worked out between the two wings of the industry ever since the Trai tariff order for non-Cas areas.
Set Discovery's main contention is that the upper limit fixed on the number of channels for non-Cas areas will lead to a situation where the MSOs will not give/offer channels beyond the maximum number prescribed. This in turn will compel the new channels to be offered as free-to-air (FTA) channels.
As a consequence, Set says, the tariff order enables MSOs to charge / levy a carriage fee, which is not regulated and which is tantamount to unjust enrichment of MSOs at the cost of broadcasters. It says too that the price freeze slab structure imposed by the Authority gives a handle to MSOs / LCOs to arm-twist broadcasters / new broadcasters who wish to add channels.
Among the other grounds on which the order has been challenged are as follows:
[*]The basis of the tariff order is irrational as the Authority has fixed different prices for the same content.
[*]Trai has been arbitrary and discriminatory and failed to serve the objective of fixing a proper/correct price, though it is well settled that price fixation should be based on relevant material and should be fair and reasonable and that not a minimum but a reasonable profit margin is permissible.
[*]The Authority proceeded on the erroneous premise that the market does not have sufficient level of competition, though there is sufficient competition to let market forces determine prices.
[*]The authority has failed to take into account the ground realities and the change in scenario, with the advent of various alternative addressable platforms and new channels.
[*]The authority has acted in violation of the mandatory provisions of S. 11(4) of the Trai Act.
[/list]Set has also sited the decision given by the Supreme Court in its judgment Ashoka Smokeless Coal India (P) Ltd. v. Union of India [Ref: (2007) 2 SCC 640] where it was held that prices are required to be fixed keeping in mind the market forces as in a market governed by free economy where competition is the buzzword, producers may fix their own price and that demand and supply are a relevant factor while fixing tariffs.
Set has contended that the 4 October order goes contrary to this.
The broadcaster has averred that the tariff order will have a direct bearing and impact the investments in new channels resulting in poor/low quality of programmes which will eventually affect the consumer/public interest.
"The basic function of the Authority while fixing tariffs is to collect accurate data and analyze the same to balance competing interests," it has held.
"The Authority has failed to balance interests and its tariff fixation will impact the content providers.
"It is well known that the popularity of a channel depends on the quality of its content, which in turn Is dependent on the investments made by broadcasters for developing appropriate content," Set Discovery says.
The tariff order will have an adverse impact on the level of investment, which in turn will affect the quality of programmes and eventually consumer interest.
The tariff order has failed to address the root cause of the problem in this sector which is under declaration. In January 2004 the authority had imposed a blanket price freeze/cap.
Interestingly, Set has challenged the order on the ground that the Authority has applied principles from the telecom sector to the broadcasting sector in fixing tariffs, though there is a fundamental difference between the two - both in terms of nature of business and the dynamics.
While the broadcaster has prayed that the order be quashed and in the interim, the execution of the order be stayed, MSOs say that they had been urging the broadcasters to jointly work out channel grouping and other formulations.
Indiantelevision.com's > Digital Edge > Set Discovery challenges a la carte pricing in Tdsat
