The Bombay High Court did not grant any interim stay on the TRAI’s amendments to last year’s tariff order at the second day of hearing on the matter, making it even more likely that broadcasters will be forced to cut their channel prices soon.
Instead of issuing a stay, the High Court has posted the matter for a hearing on January 30, asking broadcasters to file a response to the reply given by the TRAI to their original petition.
TRAI had filed a response to the petition filed by the Indian Broadcasting Foundation. In the original petition, the industry body had accused the regulator of changing the regulations too often, causing instability to their business and so on.
WIN FOR TRAI?
Today’s decision by the High Court not to issue a stay order comes as a massive disappointment for broadcasters such as Zee Entertainment, Star India, Sony Pictures Networks and TV18 Broadcast.
These operators were hoping that the court would stop TRAI from forcing them to reduce channel prices from Rs 22.40 to 14.16 with effect from March 1.
TRAI came out with an amended set of rules on Jan 1 this year, under which no channel priced above Rs 14.16 (including tax) can be made part of a package.
At present, most of the popular channels in India — such as Star TV, Zee TV, SET, Colors and Sun TV are all priced at Rs 22.40, including tax.
They are also sold as part of various channel packs created by the broadcasters themselves, as well as distribution platform owners such as cable and DTH operators.
The absence of a stay at this stage means that it has become more and more unlikely that broadcasters will be able to stop TRAI from pushing for a rate cut on March 1.
Three years ago, broadcasters were able to delay the roll-out of the original tariff order by winning stay orders by approaching various High Courts.
As a result, the original TRAI tariff order — scheduled to come into effect in September 2017 — came into effect only in January 2019.
This time, TRAI was well prepared to avoid a repeat of the 2017 scenario when it faced law suits in various high courts and was scrambling from one court to another to answer questions. This time, it filed caveats at all major High Courts in advance, anticipating the broadcasters’ move.
RISKY GAME
With the latest move by the bench of Justices SC Dharmadhikari and RI Chagla, the risks for broadcasters in continuing with their current strategy has gone up.
If they continue to delay publishing new, cheaper rates for their channels, their popular channels will not be included in any pack offered from March 1, whether from broadcasters, cable operators or DTH operators.
The TRAI has clarified that under the new rules, any change in the price of a channel, or the composition or price of a channel pack, can be done only if the new rates are published at least 45 days in advance.
This means that if Zee wanted to cut the price of Zee TV to Rs 14.16 with effect from March 1 to include the channel in its various packs, it should have published the new rate as of January 15.
Since it did not publish the new rates on January 15, it means that the current price of Rs 22.40 will be applicable from March 1 onward as well.
This means that the channel, like many others, will have to be forcibly removed from all packs on March 1.
If a broadcaster, however, publishes a cheaper rate for its channel today (Jan 22), it will be able to re-add its channel to various packs from March 7 onward.
However, a delay of one day in publishing the new price will push back this re-inclusion date by one day.
As such, a channel whose new price is published on Feb 1 can be re-included in packs on only from March 17 and so on.
THIRD PARTY RIGHTS
The broadcasters are delaying the publication of cheaper rates due to one key factor — if they announce cheaper prices, cable and DTH operators are free to announce new plans of their own based on these cheaper rates.
They can also enter into agreements to re-sell these channels at the new, cheaper rates.
So, even if the court later overturns the TRAI amendments, the new, cheaper rate will be valid for at least a few months, until these agreements run out or are annulled or canceled.
LOWER BILLS FOR CONSUMERS
Meanwhile, the new development means that consumers can look forward to cheaper a-la carte channels, and in some cases, even cheaper channel packs, from March 1 onwards.
Thanks to TRAI’s amended rules, monthly bills of consumers are likely to go down by around 20% from March 1.
Besides giving relief from high priced pay channels, TRAI’s amended rules also promise a higher number of channels (200 versus 70 earlier) in the basic tier.
In other words, while consumers were earlier eligible to get 70 standard definition channels (or 35 HD channels) of their choice as part of the basic tier, now they can get 200 standard channels (or 100 HD channels).
In all likelihood, the basic tier will continue to be priced at Rs 154 plus any pay channel charge, in case the subscriber includes any pay channel within his selection of 200 channels.