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Tag: TDSAT

  • TRAI to wait for final SC verdict before implementing tariff orders for C&S

    TRAI to wait for final SC verdict before implementing tariff orders for C&S

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) has said that amendments to its tariff orders issued on 1 October, 2004 and 21 July, 2010, which had been set aside by the Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) earlier this month, would be subject to the outcome of the appeal filed by the regulator before the Supreme Court.

     

    The two amendments made by the TRAI to its tariff orders that aimed at preventing broadcasters from giving their channels directly to subscribers and putting commercial subscribers at par with ordinary subscribers were struck down by TDSAT on 9 March.

     

    TDSAT chairman Aftab Alam and member Kuldip Singh said the two amendments were “quite unsustainable and we are thus constrained to set aside the impugned amendment orders.”

     

    The amendments referred to the Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Twelfth Amendment) Order 2014 dated 16 July, 2014 and the Telecommunications (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff (Fourth Amendment) Order 2014 dated 18 July, 2014 by which similar amendments were made in the Telecommunication (Broadcasting and Cable) Services(Second) Tariff Order 2004 dated 1 October, 2004 (relating to non-addressable or analogue systems) and the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order 2010 dated 21 July, 2010 (relating to addressable systems) respectively.

     

    The Indian Broadcasting Foundation (IBF) and the Federation of Hotels and Restaurant Association of India had challenged the amendments as the commercial subscriber had been put at par with the ordinary subscriber and the tariff orders treat as equal groups of subscribers that are inherently unequal and are also so recognized in their different definitions in the tariff orders.

     

    In a press note today, TRAI said it had filed an appeal before the apex court and decided to hold its orders in abeyance ‘after duly considering the matter.’

     

    TRAI had issued the tariff orders – “The Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Seventh Amendment) Order 2006″ dated21 November, 2006and the Telecommunication (Broadcasting and Cable) Services (Third) (CAS areas) Tariff (First Amendment) Order2006” dated 21 November applicable to commercial cable subscribers in the non-addressablesystem (non-CAS) and the CAS systems, respectively.

     

    Following an appeal, the Supreme Court had on 16 April, 2014 directed TRAI to look into the matter de-novo and within three months re-determine the tariff after hearing all the stakeholders’ contentions.

     

    The orders set aside by TDSAT on 9 March were the result of this re-examination.

  • TDSAT sets aside 27.5% inflation-linked hike for addressable & non-addressable systems

    TDSAT sets aside 27.5% inflation-linked hike for addressable & non-addressable systems

    NEW DELHI: The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) today set aside the amendments in two tariff orders, which had sought to put an inflation-linked hike of 27.5 per cent on addressable and non-addressable systems, opening the doors to a re-think on the entire policy of tariff orders.

     

    TDSAT chairman Aftab Alam and member Kuldip Singh said in their order today that the ‘The Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Eleventh Amendment) Order, 2014’ and ‘The Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Thirteenth Amendment) Order, 2014’] were ‘untenable.’

     

    The Tribunal also said it thought the Telecom Regulatory Authority of India (TRAI) “will be well advised to have a fresh look at the various tariff orders in a holistic manner and come out with a comprehensive tariff order in supersession of all the earlier tariff orders.”

     

    “While doing so, it may consider all the agreements and relevant data available with it. It may consider differentiating between content which is of a monopolistic nature as against that the like of which is shown by other channels also.”

     

    “It may also consider classifying the content into premium and basic tiers. It may identify the major cost components so that increase or decrease in such costs may be suitably factored while working out the inflationary hikes. Increase in costs of such components as may be available in indexes such as WPI, GDP deflator etc. can then be applied. While working out the tariffs, the effort should be to encourage a correct declaration of SLR. While carrying out the exercise, it may take the inputs from various stakeholders and give a reasoned order for accepting or rejecting the same. We want to be amply clear that the above are only some suggestions and TRAI being an expert body may arrive at suitable tariffs independently; it is up to it to consider the above and/or any other factors,” the Tribunal said.

     

    The tariff hike was challenged by Home Cable Network, the Centre for Transforming India, Lucknow 9 Cable Network, Good Media News India Pvt Ltd, Sikkim Digital Network and Cable Combine Communication Siliguri.

     

    Later, the Indian Broadcasting Federation (IBF) supported the order as intervener while the other interveners comprising Direct to Home (DTH) operators, Multi System Operators (MSOs) and Association of Cable Operators/Cable Operators opposed the order on the same grounds as the Appellants.

     

    TRAI had allowed a 15 per cent hike from 1 April, 2014. The second installment of 12.5 per cent tariff hike came into effect from 1 January, 2015.

     

    TRAI said the inflationary increases given by it are based on increase in the Wholesale Price Index (WPI). In the Explanatory Memorandum with the Second Amendment to the Principal Tariff Order, it was explained that for making adjustments for inflation Wholesale Price Index (WIP) had been used. It was explained that Consumer Price Index (CPI) was not used as latest information for this was not available and further this related to certain specific consumption baskets. As per the Explanatory Memorandum to the impugned Tariff Order, the WPI has increased by 43.69 per cent and giving a pass through of 63 per cent, an inflation linked increase of 27.5 per cent is allowed.

     

    Appearing for the appellants, advocate Vivek Sareen, who is a former employee of Tata Sky and is therefore from the industry, had argued the case on economic modules from all over the country, which in fact showed that the prices had actually come down according to the GDP Deflator, and therefore the hike was unjust.

     

    Senior counsel for the appellants Arun Kathpalia said the original exercise on which tariff fixation is predicated is not a tariff exercise and therefore all tariffs fixed on that basis are not tariff fixation exercises. He added that the entire increase is arbitrary as it is on an ad-hoc and interim fixation, as such itself arbitrary in the first place. The increase is otherwise also wholly arbitrary and suffers from non-application of mind. He also said the tariff order has been issued in complete violation of section 11(4) and there is no transparency whatsoever in the process adopted by the TRAI.

     

    It was also submitted that despite availability of all the relevant information for price fixation in Digital Addressable System (DAS), TRAI arbitrarily linked ceiling of rates in DAS with analog regime vide 4th Tariff Order dated 21 July, 2010. The upward revision by 27.5 per cent in wholesale price for Non-DAS area will automatically result in revision of the ceiling of corresponding prices in DAS regime. TRAI has created another ad-hoc regime for DAS by linking the ceiling of charges of DAS with analog, it was argued.

     

    TDSAT said, “It was argued that the tariff based on historical costs is one of internationally accepted methods. We find that even that is required to be based on a proper exercise conducted for the purpose. We may note that in the United States following the Cable Television Consumer Protection and Competition Act of 1992, US Congress asked Federal Communications Commission to ensure that rates for basic services tier are reasonable. FCC decided to go for price caps and the first thing it did was to collect data on rates being charged by cable operators operating in competitive as well as non-competitive areas. We can understand the freezing of rates being charged on a particular date as an interim measure but we fail to understand why TRAI did not examine the rates being charged in the agreements at the time of giving inflationary hikes.”

     

    The Tribunal had in May last year asked broadcasters to maintain a separate account for the additional subscription amount that they have collected from distribution platforms as a result of the tariff hike as this would be subject to the outcome of the case.

    Sareen had argued that the impugned tariff order had adversely impacted the interest of the addressable platform because the wholesale pricing of the addressable system is based on the wholesale pricing of the non-addressable platform. He said the impugned tariff was heavily tilted towards broadcasters and seriously prejudiced the interest of the consumers, MSOs and stifles orderly growth of the cable and broadcasting sector.

     

    Sareen argued that TRAI ignored the fact that the wholesale pricing of non-addressable system and addressable system are inter related. The wholesale price for addressable platform is derived from the wholesale price of non-addressable system. By its order, TRAI indirectly and in substance increased the wholesale price for addressable platform / DAS notified area. The said increase in the wholesale price for addressable platform is affected in violation of section 11(4) of the Act.   

     

    TRAI completely disregarded the fact that by changing the content pricing and increasing the same by 27.5 per cent with reference to the price existed immediately prior to 31 March, 2014, this would immediately increase the price of content for addressable platform. The authority did not provide any hearing opportunity to the stakeholders including the Appellants to represent its view as a stakeholder in the consultation process.

     

    It was stated that TRAI, in utter disregard of the valuable rights of the stakeholders including the Appellant and the consumers provided under Section 11(4) of the Act, rushed to issue the impugned order thereby increasing the wholesale price for addressable platform by 15 per cent with effect from 1 April, 2014. Thus the impugned order failed to take into account the inputs from such stakeholders.

  • TDSAT rejects Star India’s applications against Indusind, Goldstar

    TDSAT rejects Star India’s applications against Indusind, Goldstar

    NEW DELHI: The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has rejected four miscellaneous applications relating to five cases against it to the effect that an endorsement made by the petitioners at the end of agreements left ‘the door open to the petitioners to walk out of any clause.’

     

    Four petitions had been filed by Indusind Media and one by Goldstar Noida Network Pvt. Ltd., U.P.

     

    Star India Pvt. Ltd. Counsel Salman Khurshid said that while executing the interconnect agreement in pursuance of the order passed by the Tribunal, the petitioners made the endorsement that the execution on its behalf was “without prejudice.” He said the whole agreement was put in a state of uncertainty because of the endorsement at the bottom of the agreement.

     

    However, counsel Vandana Jaisingh for the petitioners stated that the endorsement “without prejudice” relates only to the 15 per cent increase in the subscription fee and to no other clause in the agreement, including the clauses relating to the additional areas.

     

    It was made clear in the order by which the two sides were directed to execute the agreement that the 15 per cent increase in subscription fee will be subject to the result of a petition pending before the Tribunal. In any view, therefore, the endorsement “without prejudice” is redundant, she said.

     

    TDSAT chairman Aftab Alam and member Kuldip Singh said in the order that no further directions need be passed in these applications in view of the clarification made by Jaisingh.

  • Sun to resume distribution of Ortel signals in Vishakapatnam; subject to payment clearance

    Sun to resume distribution of Ortel signals in Vishakapatnam; subject to payment clearance

    NEW DELHI: Sun Distribution Services Pvt. Ltd has been directed to resume the supply of its signals to Ortel Communications Ltd and will also execute the interconnect agreement within one week from that date.

     

    Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) chairman Justice Aftab Alam and member Kuldip Singh also held that Ortel will pay to Sun the payment of Rs 33,89,910 plus Rs 4,22,976 within 24 hours.

     

    In addition to the payments, Ortel will also give to Sun the certificate showing the deduction of taxes.

     

    However, TDSAT made it clear that the payment of Rs 4,22,976 will be subject to the Tribunal’s decision on the Telecom Regulatory Authority of India’s tariff order relating to inflationary increase, which is currently pending hearing before TDSAT.

     

    Based on a table presented to the Tribunal by Ortel, the admitted dues are Rs 33,89,910 and the difference between the admitted amount and the dues claimed by the respondent is thus Rs 9,42,148.

     

    Ortel’s counsel Samir Sagar Vashistha, who presented the table, explained that this included the sum of Rs 5,18,925 as the amount of taxes deducted at source and the actual dispute is only with respect to the sum of Rs 4,22,976. 

     

    He assured that Ortel will confine its operation within the area of Vishakhapatnam.

     

    Sun counsel A.S. Dugal said the sum of Rs 4,222,976 represented the inflationary increase of 15 per cent allowed by the TRAI’s tariff order.

     

    Vashistha stated that Ortel was willing to pay the sum of Rs 33,89,910 and also give to the respondent the certificate showing deduction of taxes amounting to Rs 5,18,925. In addition, it will also pay Rs 4,22,976 subject to the Tribunal’s decision on the tariff order in question. 

     

    Dugal said the offer was quite fair and the respondent was willing to accept it.

  • I&B asks stakeholders to arrive at consensus on difficult issues for successful digitisation

    I&B asks stakeholders to arrive at consensus on difficult issues for successful digitisation

    NEW DELHI: Information and Broadcasting Ministry (I&B) additional secretary J S Mathur, who heads the Task Force for Phase III and IV of Digital Addressable Systems (DAS) for cable television has urged all stakeholders to come together and resolve issues, if targets have to be met.

     

    Noting in the sixth meeting held on 13 March that only seven out of 100 multi-system operators (MSOs) had given the seeding plans for Phase Ill areas.

     

    The data provided by them indicated that about 3.1 million set top boxes had been seeded by them with about 550,000 STBs in their stock and about 2.35 million STBs under orders of purchase. He remarked that the seeding so far was very low vis-a-vis the target.

     

    He said, “Each day counts towards progress in digitisation.” He also said that progress would be slow without public awareness campaign by the stakeholders.

     

    He said there was lack of mutual connect between broadcasters and MSOs with each stakeholder wanting to maximize self interests. There was need for coming to a consensus.

     

    He added that the data on subscription revenue and carriage fee from the Indian Broadcasting Foundation and News Broadcasters Association was still awaited, despite assurances.

     

    He emphasised that broadcasters have to contribute by mounting awareness campaign on their channels as was done by them during Phase I and Phase II and the MSOs have to contribute in this campaign. He said broadcasters should start a dialogue with MSOs immediately.

     

    He welcomed the initiative taken by Telecom Regulatory Authority of India (TRAI) to hold a meeting with broadcasters and MSOs to resolve the issue of interconnect agreements.

     

    However, the stakeholders should themselves get their act together and put in their utmost effort to ensure that such issues do not come in the way of achieving the goal of digitisation.

     

    He said that as pointed out by some members of the Task Force, digitisation has begun to benefit all stakeholders. Activity on the ground needs to be accomplished from now itself as it is not a matter that can be put in place overnight.

     

    Representative of MSOs said there were issues of content costing, due to which they were finding it difficult to plan digitisation in new areas. Seeding plans can be firmed up by MSOs only after knowing content cost. Till then, the MSOs can only give their seeding projections instead of seeding plans.

     

    They also stressed that revenue from Phase Ill and Phase IV areas is about 20 to 30 per cent of the total revenue from the country. So content cost in Phase Ill and Phase IV areas cannot be same as that in Phase I and Phase II areas and this has to be taken into account by all stakeholders.

     

    MSOs also complained that broadcasters were not entering into interconnect agreements with the MSOs for Phase Ill areas.

     

    Unless the input cost is known, MSOs cannot educate the consumers about the rates and there are issues of local taxation levied by some State Governments apart from local cable operators switching over to analogue when the digital signal to them is cut off by the MSO.

     

     

    Broadcasters’ representatives on the other hand said MSOs had not approached the broadcasters for entering into interconnect agreements in new areas. The broadcasters felt that this was because MSOs do not have concrete plans.

     

    Seeding was done by MSOs in Phase I and Phase II without first entering into interconnect agreements with broadcasters and this should not be an issue now, some of the broadcasters said.

     

    They claimed that channel prices had gone up due to technical upgradation from SD to HD, but there had been no increase in the advertisement rates.

     

    A TRAI representative said that according to a TDSAT judgment, MSO/LCO providing cable TV services were free to provide digital cable service in new areas unless it trespasses other areas. He impressed upon the broadcasters to enter into interconnect agreements with MSOs who approach them for content in Phase Ill and Phase IV areas.

     

    Representative of consumer forums mentioned that pricing is the main issue which the consumers are facing. He added that consumers should know the price before he switches over to digital.

     

    Representative  of  CEAMA  stated  that  they  approached  as  many  MSOs  as possible to clear their doubts about indigenous set top boxes. However the response from the MSOs has not been encouraging. He reiterated that they have the capacity to meet the requirements of Phase Ill and Phase IV.

     

    A representative of the Uttar Pradesh Government mentioned that CAF forms should be filled by the MSOs before changing to digital mode in Phase Ill and Phase IV areas. He added that the State Government was not having complete seeding data of Phase II cities.

     

    The representative of Jammu and Kashmir wanted consumers to be informed about the set top box price. 

  • TDSAT sets aside amendments for commercial & ordinary subscribers

    TDSAT sets aside amendments for commercial & ordinary subscribers

    NEW DELHI: Two amendments made by the Telecom Regulatory Authority of India (TRAI) to its tariff orders that aimed at preventing broadcasters from giving their channels directly to the subscribers and putting commercial subscriber at par with ordinary subscribers were today struck down by the Telecom Disputes Settlement and Arbitration Tribunal (TDSAT).

     

    TDSAT chairman Aftab Alam and member Kuldip Singh said the two amendments were ‘quite unsustainable and we are thus constrained to set aside the impugned amendment orders.’

     

    The amendments referred to are the Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Twelfth Amendment) Order 2014 dated 16 July, 2014 and the Telecommunications (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff (Fourth Amendment) Order 2014 dated 18 July, 2014 by which similar amendments were made in the Telecommunication (Broadcasting and Cable) Services(Second) Tariff Order 2004 dated 1 October, 2004 (relating to non-addressable or analogue systems) and the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order 2010 dated 21 July, 2010 (relating to addressable systems) respectively.

     

    The Indian Broadcasting Foundation (IBF) and the Federation of Hotels and Restaurant Association of India (FHRAI) had challenged the amendments as the commercial subscriber is put at par with the ordinary subscriber and the tariff orders treat as equal groups of subscribers that are inherently unequal and are also so recognised in their different definitions in the tariff orders.

     

    The impugned amendments introduce mainly three changes: firstly, the broadcaster is no longer allowed to provide its channels directly to a subscriber, be it an “ordinary subscriber” or a “commercial subscriber;” secondly, the terms “commercial establishment” and “commercial subscriber” are defined elaborately and classified separately from “ordinary subscriber” and thirdly, though defined and classified separately from “ordinary subscriber,” for the purpose of charges for receiving supply of channels, the very large and highly heterogeneous body of “commercial subscriber” is en-block put completely at par with the “ordinary subscriber.”

     

    The appellants are aggrieved by the amendments in so far as the commercial subscriber is put at par with the ordinary subscriber and contend that as a result of the impugned amendments, the tariff orders treat as equal groups of subscribers that are inherently unequal and are also so recognized in their different definitions in the tariff orders.

     

    The Tribunal said even while the hearing of the present appeal before the Tribunal was underway, TRAI issued the Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Fourteenth Amendment) Order 2015 on 6 January, 2015 that inter alia restates the impugned amendments in the Second and Fourth tariff order. Consequently the appellants have filed an application for amending the appeal with a view to challenge the restatement of the impugned amendments in the fourteenth amendment of the Second tariff order.

     

    Allowing the petition, TDSAT said proviso 6 and 7 to clause 3 of the fourteenth amendment along with the explanation appended to proviso 7 are also set aside.

     

    It said TRAI must now undertake a fresh exercise ‘on a completely clean slate. It must put aside the earlier debates on the basis of which it has been making amendments in the three principal tariff orders none of which has so far passed judicial scrutiny. It must consider afresh the question whether commercial subscribers should be treated equally as home viewers for the purpose of broadcasting services tariff or there needs to be a different and separate tariff system for commercial subscribers or some parts of that larger body. It is hoped and expected that TRAI will issue fresh tariff orders within six months from to-day.’

     

    TDSAT said that now that the impugned tariff orders are quashed, the question that arises is the rates that commercial establishments are to be charged, especially those that were excluded from the tariff protection by the seventh amendment of the Second tariff order until TRAI comes out with the fresh tariff order.

     

    The seventh amendment to the Second tariff order and the first amendment to the Third (CAS Area) tariff order were quashed by the judgment of the Tribunal dated 28 May, 2010 but those were kept alive by the Supreme Court for a period of three months from 16 April, 2014, the date of the order by which the Court confirmed the Tribunal’s judgment.

     

    As that period is long over, TDSAT said it would not be proper to revive the tariff amendment orders dated 21 November, 2006. As a consequence, the un-amended Second, Third and Fourth tariff orders will come into play and commercial subscriber would, by default, get bracketed with ordinary subscriber.

     

    In other words though the impugned amendments in the tariff orders are quashed by this judgment, TDSAT said for practical purposes the situation will continue to remain the same. This is because despite two orders by the Supreme Court to consider the question of tariff in respect of commercial subscribers within specified times periods, TRAI has not been able to produce the tariff that would satisfy judicial scrutiny.

     

    “This is evidently a highly anomalous situation and to remedy it TRAI must consider whether to issue an interim tariff order dealing with the matter until it takes a final call on the subject. TRAI should take a decision in regard to any interim arrangement within one month from today.”

     

    The Tribunal said, “We are fully mindful that TRAI has been painstakingly grappling with this matter for a long time. We also recognise that the issue is highly complex and no easy answers are available. We feel that a good deal of confusion and misunderstanding has resulted from the fact that the seventh amendment of the Second tariff order came to be issued just three days before the pronouncement of the judgment by the Supreme Court in the first round of litigation. TRAI can hardly be blamed for this as it had acted in pursuance of the direction of the Supreme Court by which the Court had modified the status quo order passed at the time of the admission of the appeal. But the result was that in framing the seventh amendment to the Second tariff order, TRAI did not have the benefit of the pronouncement of the Supreme Court in the matter. At the same time the Supreme Court could not get to know how the First and the Second tariff orders were perceived by their maker, the regulator and to what object and purpose those tariff orders were made according to the regulator.”

     

    The seventh amendment to the Second tariff order and the amendment to the Third CAS areas tariff order were eventually quashed by the Tribunal and in the judgment TRAI came in for some strong criticism.

     

    TDSAT said it appeared that as a result of this, TRAI went to the other extreme in coming up with the impugned tariff orders. All the different kinds of commercial subscribers being put en block at par with the ordinary subscriber appears to be as arbitrary and unreasonable as the carving out of a very small segment of hotels [namely, (i) hotels with rating of three stars and above, (ii) heritage hotels and (iii) any other hotel/motel, inn and such other commercial establishment providing board and lodging having 50 or more rooms] for exclusion from the tariff protection.

     

    “We are strongly of the view that what is required in the matter is a far more nuanced approach. We rather feel it is high time that TRAI should stop making any further amendments in the different tariff orders and take a completely fresh and holistic view on the question of tariff in broadcasting services. As a result of repeated amendments, the Second, Third and Fourth tariff orders have become so complicated that it has become difficult even to follow the exact import of a provision without examining all the amendments made earlier in the Principal tariff order. How much the tariff orders have become clumsy and unwieldy is evident from their very names as is sought be demonstrated in the opening lines of this judgment. We, accordingly, expect that as the whole country is now to come under the DAS regime, TRAI will undertake a fresh exercise and come out with a single consolidated instrument covering broadcasting services,” the Tribunal said.

  • TDSAT directs Taj TV to give signals to Fastway Transmission in Karnal

    TDSAT directs Taj TV to give signals to Fastway Transmission in Karnal

    NEW DELHI: The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has directed Taj Television – the distribution arm of Zee Entertainment Enterprises Limited (ZEEL) – to provide its signals to multi-system operator (MSO) Fastway Transmission in Karnal in Haryana as an interim measure.

     

    The Tribunal has said that the final order will be passed post the resolution of a pending dispute where another New Delhi based MSO – Indiverse Broadband has claimed that both Siti Cable and Fastway are indulging in piracy and taking away its subscribers.

     

    It said the interim order was being given “having regard to the fact that due to non-supply of the signals, Fastway may be losing the market on a daily basis.”

     

    Even as it appointed Mansoor Ali Shoket as the advocate-commissioner to record the submissions of all the parties, the Tribunal said that Fastway will pay a monthly sum of Rs 17 lakh to the Tribunal and the first month’s fee will have to be deposited in the Tribunal by 3 February.  

     

    TDSAT chairman Aftab Alam and member Kuldip Singh said, “The supply of signals by virtue of this direction shall not create any equity in favour of Fastway. It is further directed that while enlisting any LCOs or subscribers, Fastway should bear in mind that in case its petitions are finally dismissed, the supply of signals by Taj Television may come to a sudden end without any notice. It is further made clear that as a result of disconnection of the supply of signals, Fastway alone will be responsible for any monetary claims raised by any LCO or subscriber or any civil or criminal liability.”

     

    The order further said, “Even while the Tribunal proceeds to consider the rival cases of the parties on their merits, it is made clear that the pendency of the petitions before the Tribunal shall not, in any manner, come in the way of any other authority or court having jurisdiction to proceed in the matter.”

     

    The Tribunal said the cases will be listed on 2 February for framing of issues. On that day, the counsel for all the parties shall jointly submit an agreed list of issues. In case there are issues on which there is no agreement between the parties, the decision will be taken by the Tribunal. All the three sides shall file their respective evidence affidavits by 10 February.

     

    Fastway shall then produce its witnesses for cross-examination before Shoket – appointed by mutual consent – on 12 February. After cross-examination of Fastway’s witnesses, cross-examination of the Indiverse witnesses will take place following which the cross-examination of Taj Television witnesses will take place. The Advocate-Commissioner and all sides shall ensure that cross-examination of all the witnesses is over by 5 March.

     

    Shoket will be paid honorarium at the rate of Rs 7,500 per day. The payment for the days on which the cross-examination of any party takes place, will be made by that party. The three cases will be listed for hearing on 19 March.

     

    The Tribunal noted that in these cases, “We are faced with the issue of piracy of TV channels, that is to say, in case it is established that an MSO is engaged in unauthorised transmission of channels on a large scale and in an organised manner over a long period of time, what would be its liability and what would be the remedies available to the broadcaster whose channels are re-transmitted without legal sanction.” 

     

    Even though clause 3.2 of the Interconnect Regulations 2004 expressly mentions “default in payment” as the ground for denial of signals, “the question that needs to be examined is whether an MSO indulging in organized large scale piracy over a long period of time would still be entitled to claim the supply of signals as of rights in terms of the Regulations. The ancillary question is what remedies are available to the broadcaster and the other MSOs suffering losses on account of the piracy,” the Tribunal noted.

     

    Fastway Transmissions had come to the Tribunal seeking a direction to Taj Television, to give its channels for re-transmission in Karnal. Earlier, Indiverse had filed its petition seeking a direction to Taj Television to agree to a substantial reduction in its subscriber base on the plea that the unauthorised entry of Fastway and another MSO, Siti Cable in Karnal, has greatly eroded its subscriber base.

     

    Taj Television resisted the demands of its channels by Fastway primarily on the allegation that the latter is engaged in rampant piracy of its signals in the area of Karnal. Indiverse also makes the same allegation and states that even though it held dominant position as an MSO in Karnal, as a result of unauthorised entry of Fastway and Siti Cable, another MSO there, and the rampant piracy by them, it is reduced to a state where 90 – 95 per cent of its network is taken over by the two MSOs.

  • TDSAT asks Star India to not disconnect signals to Siti Cable for Mumbai

    TDSAT asks Star India to not disconnect signals to Siti Cable for Mumbai

    NEW DELHI: The Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) has directed broadcaster Star India to cancel its disconnection notice to Siti Cable Network after the multi-system operator (MSO) handed over a cheque of Rs 10 crore for settlement of the payment dispute pending mutual negotiations. 

     

    TDSAT chairman Aftab Alam said, “We hope and trust that the two sides will be able to resolve their disputes through negotiations; in case any issues survive, those will be adjudicated by the Tribunal.” 

     

    The matter, if not resolved, will be listed for 5 February. Star India has been given two weeks to reply to the petition. 

     

    Star India had claimed that Siti Cable was in arrears of Rs 26 crore, which was disputed by the MSO. However, the MSO did admit there were some arrears. 

     

    Counsel Meet Malhotra for Siti Cable said his client would submit within two days the information required by Star India on its indicating “on an email to the petitioner, the materials, including the SMS reports that it wishes from the petitioner.”

     

    Star India counsel Salman Khurshid had also alleged that Siti Cable was indulging in piracy in as much as it is taking its signals outside the area covered by the interconnect agreement. Malhotra did not deny the fact that his client was retransmitting the signals to certain suburbs of Mumbai, which fall outside the area of the agreement but submitted that the petitioner had duly informed the respondent on the very day it started retransmitting the signals outside Mumbai and in any event, all the subscribers viewing the respondent’s channels whether within the area of the agreement or outside the area of agreement, will be recorded in its SMS and will be duly reflected in the SMS reports.

  • Dispute between Taj TV & Meghbela Cable goes to Mediation Centre under TDSAT order

    Dispute between Taj TV & Meghbela Cable goes to Mediation Centre under TDSAT order

    NEW DELHI: The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has directed Kolkata based multi system operator (MSO) Meghbela Cable and Broadband Services and Taj Television to get their financial dispute resolved before the Mediation Centre.

     
    Senior representatives of both parties have been asked to appear before the Centre on 23 January.

     
    Meanwhile, Meghbela’s counsel Vineet Bhagat has handed over five cheques aggregating to the sum of Rs 16,45,580 to to Taj TV counsel Upendra Thakur towards payment of earlier dues.

     

    Bhagat stated that the payment was without prejudice to the rights and contention of his client.

     

    Thakur suggested that the matter may be referred to the Mediation Centre where the parties may have a reconciliation of their accounts and further try to resolve their disputes. Bhagat had no objection to the course suggested by Thakur.

     
    TDSAT chairman Justice Aftab Alam and member Kuldip Singh said in their order, “Needless to say that both sides will be represented by officers who are in a position to take decisions on behalf of their respective principals in course of the mediation proceedings.”

     
    When the issue had come up before the Tribunal last year following Meghbela challenging a disconnection notice, it had been suggested to the parties to hold discussions to reconcile the amounts. Taj TV had also been asked not to carry a scroll against the MSO on its channels. However, a joint meeting on 26 December failed to result in any compromise.

  • 2014: Cable TV’s year of missed opportunities?

    2014: Cable TV’s year of missed opportunities?

    2014 many would say has been a year of more downs than ups, especially for the cable TV industry. But, if one peels off the superficial layers and looks deep, it would be fair to say that it was indeed a year of opportunity for all the stakeholders in the cable TV ecosystem, despite all the trappings that it had of a Bollywood film with all the drama and twists and turns.

    The year began with industry regulator the Telecom Regulatory Authority of India (TRAI) cracking the whip on errant multisystem operators (MSOs) and last mile owners (LMOs) who had not implemented simple hygiene requirements such as subscriber information and billing in Digital Addressable System (DAS) phase I and II areas. 2014 probably was the most litigious one in recent memory for those in the cable TV ecosystem with the various constituents spending more time in courts or in the portals of the Telecom Disputes Settlement Appellate Tribunal (TDSAT) than in upgrading their systems or moving ahead on business models. LMOs and MSOs snapped at broadcasters and aggregators, even as the latter took swipes at them with their heavy hands. No resolution seemed in sight and hence the anti-climactic postponing of phase III and phase IV DAS to 2016 by the Information and Broadcasting (I&B) Ministry almost came as a lifeline to the industry. Some carped about the postponement, some decided to take it upon themselves to voluntarily digitise, while other LMOs just got back to squabbling once again.

    Even as international strategic and financial investors got repelled by the chaos in Indian cable TV land, domestic lay investors and equity investors too gave the sector a thumbs down. One of the leading stocks, the Sameer Manchanda-run Den Networks, which was the investors’ darling in 2013, registered a 19 per cent erosion in its share price from Rs 161.65 in early January 2014 to Rs 131.30 on 24 December. Hathway Cable & Datacom rose 25 per cent from Rs 278.75 to Rs 347.50. Both underperformed the Bombay stock Exchange Sensex which rose 28.5 per cent from 21,000 on 2 January 2014 to 27,206 on 24 December 2014. However, an exception was the stellar performer  Essel group owned Siti Cable which appreciated 80 per cent from Rs 18.15 to Rs 32.75 on the same dates. 

    November 2014 saw Star India take a big punt and play pioneer by deciding to enter into only Reference Interconnect Offer (RIO) deals with MSOs in DAS areas.  The hope was that it would push cable operators to come up with better subscriber packages and hopefully improve realisations for themselves and Star too. With ARPUs sneaking up marginally, the big MSOs and cable TV cooperatives aggressively moved ahead with the more lucrative broadband offerings to subscribers.

    The year began with the MSOs meeting in different parts of the DAS areas to ensure gross billing could be started. While Delhi and Kolkata could, at least in a few parts start gross billing, Mumbai and other phase I and II cities, even as the year comes to an end, haven’t seen bills being rolled out. The reasons for this being no consensus: on the biller’s name (whether it should be of the LCO or MSO), revenue share between the two and the pending entertainment tax case in the Bombay High Court.

     The next big development in the year was when Hathway Cable and Datacom announced a cricket pack, wherein the MSO created a separate offering consisting of all the sports channels. When the announcement was made, little did people know that the issue would be dragged to the court and would keep the TDSAT occupied for almost the rest of the year. Hathway has been one player that has been in the news throughout, mostly for its progressive moves- from launching new local cable channels, to launching DOCSIS 3 broadband technology. It also wrestled with the major broadcasters such as Star and Zee through the year on terms and conditions.

     2014 was the year of opportunities, as it opened doors for the $100 million Hinduja’s Headend In The Sky (HITS) project and the Cable Virtual Network Operator (CVNO) model. As part of this LMOs can come together and join hands with the MSO to take its infrastructure, thus giving the former the power to own their consumers. The former Indusind Media CEO and promoter of Bhima Riddhi Digital Services Nagesh Chhabria too showed his intent of getting into the cable TV market with a national MSO. A much hyped $200 million announcement – in July about his agreement with Atlas Consolidated LLC (a joint venture between Greenwich Equity Partners and Jagran Infra-Projects led by Sanjiv Mohan Gupta) – to create a national MSO it has been followed by a strange silence since.

    It was a year of opportunity, as after a gap of long seven years, the TRAI decided to defreeze prices and allowed a price hike. The regulator in March, released a notification, offering a 27.5 per cent inflation-linked hike to stakeholders in the tariff ceiling. The hike was to be implemented in two phases: 15 per cent from April 2014 and the remaining 12.5 per cent from January 2015. The move gave some hope to stakeholders to increase their Average Revenue Per User (ARPU) which was at around Rs 180 – a 20-25 per cent increase. But the industry is clearly aiming at much higher ARPUs of Rs 300-350 in the short to medium term. 

    The most important month for the cable TV industry was August. Ask why? Well, this was the month, which shocked the whole value chain.  While the LCOs were relieved, the worried ones were the broadcasters and the MSOs. The newly appointed Information and Broadcasting Minister (now former)  Prakash Javadekar, looking at the condition of phase I and II cities, which had undergone seeding of set top boxes (STBs) decided to further push the digitisation dates for phase III to December 2015 and phase IV to December 2016, from the earlier deadline of December 2014. The reason given by the Minister was that he wanted to promote indigenous STB manufacturers, who had not benefitted much from the earlier two phases.

     The news brought in some cheer for the indigenous STB manufacturers who said that this would help the indigenous manufacturing industry give employment to about 50,000 people and would attract an investment of about Rs 500 crore. The move, according to many would also generate local support facility for repair of STBs and help in smooth implementation of digitisation in the country.

    While, everyone has their own take on the decision, one should take this as an opportunity to be able to complete phase III and IV cities, which includes the small towns and villages, in a much more organised manner. Currently in phase I and II, while boxes have been seeded, no proper rollout of package and billing has happened. The stakeholders have time to ensure that along with seeding of boxes in phase III and IV cities, they can ensure that Consumer Application Forms (CAFs) are filled, the information is added in the Subscriber Management System (SMS), packages are created, offering consumers the option to choose and proper bills are rolled out, bringing in complete addressability and transparency.

     According to many, with delayed digitisation, carriage fees are once again on the rise. According to a Media Partners Asia (MPA) report, carriage fee has gone up by 14 per cent, while broadcasters and MSOs peg this at around 20-25 per cent for niche and news channels. In fact, Colors CEO Raj Nayak at this year’s India panel in MIPCOM said that carriage fees which had come down by 20 per cent are again climbing and have gone back to pre-digitisation rates. Yes, all these can be counted as the drawback of delayed digitisation, but tackling the same is broadcaster Star India’s take on the deals with MSOs.

    The case which kept TDSAT busy this year was the Hathway vs Zee and Star case. It was during this, that Star India, in order to fight discrepancy in deals with MSOs, took a firm decision of entering into only RIO deals with MSOs. While this did hit the MSOs, since their cost of content went up, it did two things. One, it nipped carriage fees and two, opened the doors for the MSOs to increase their ARPUs. In fact broadcasters, who feel that the carriage fees are headed northwards, should consider entering into RIO deals, as was also said by MPA in one of its reports.

     With the extension of digitisation dates, a number of MSOs also decided to opt for voluntary digitisation, which was a welcome move, since it showed the intent of MSOs to see the country fully digitised.

    Keeping digitisation and broadband plans in mind, the year saw a few MSOs raising funds for themselves. Considering the money spent by the MSOs in acquiring content and taking digitisation forward did not match with the on-ground collections, MSOs were left with no choice but raise more funds to complete the task in hand. So while Hathway got board approval to raise Rs 300.80 crore through preferential allotment of shares, Essel Group’s subsidiary Siti Cable Network raised Rs 600 crore through the issuance of securities. Last mile owner Ortel Communications too made its move towards getting listed. The LMO, this year, filed its draft red herring prospectus (DRHP) for its proposed initial public offering (IPO) with the securities and exchange board of India (SEBI). The IPO may raise as much as Rs 360 crore.

    The year also saw the I&B cracking its whip on a few MSOs like Digicable and Kal Cable as their licences were cancelled following refusal of security clearance by the Home Ministry. But the duo got relief from their respective state High Courts and are still up and running. Even as Tamil Nadu former Chief Minister J Jayalalithaa owned Arasu Cable struggles to get its DAS licence, Karnataka state government Minister for Information, Public Relations and Infrastructure R Roshan Baig too showed some interest in entering the cable TV business, this year.

     The cable TV industry, like every year was brought together through one forum organised by indiantelevision.com and MPA, IDOS 2014, held in Goa. The three day event threw light on some important statistics:

    ·         Of the 262 million households in the country only 162 million houses have a TV. Of this, 27 million is taken up by the free to air service providers such as Freedish via satellite and 7 million by terrestrial DD, while the rest comes under cable and satellite.

    ·         Rs 32,000 crore has been invested in digitisation since 2005 with a bulk of the investment coming from the DTH operators followed by the MSOs and LCOs since 2011. Out of this, over Rs 11000 crore in the last 24 to 30 months has been invested by MSOs and LCOs.

    ·         While the cost of all the pay channels on a wholesale basis is Rs 922 to digital platforms, the highest pack price is Rs 550 which is an anomaly and needs correction. Retail pricing is the answer to correct this. And it is competition amongst six DTH, two HITS, five national MSOs and several regional ones and the local cable ops will keep retail rates in check.

     We at indiantelevision.com hope that broadcasters, LMOs, MSOs will take a progressive view towards digitisation of their operations and also becoming transparent with their partners in 2015. The fact is there is a lot of work to be done: more than $3-4 billion are needed to digitise India’s cable TV infrastructure; a large part of these will most likely come from international players.   Many of these who were pacing the sidelines watching the developments clearly got a stomach upset and decided to park their funds elsewhere. Now it is up to the industry to restore investor confidence; that cable TV is a sector where one can see adequate returns. Failing which newer distribution technologies like OTT, video streaming and 4G might end up being good options which video lovers could end up considering.