Tata Sky is asking users to wait for TRAI tariff to come into force

Even as broadcast regulator TRAI sent out yet another reminder to cable and DTH users in the country to switch to new plans under the 2017 tariff order, India’s biggest DTH operator continued to ask users to wait for the “tariff order to become applicable” and for “channel prices to be finalized”.

The apparent disconnect between what the regulator is asking and what the service provider is claiming has pushed consumers into a corner, with most worrying about what will happen to their subscriptions after January 31.

January 31 is the last date till which cable and DTH customers can continue to subscribe to their pre-tariff order packs.

After that date, the existing packs and prices will lapse and consumers who have not migrated to the new packs will find their service interrupted.

TRAI said it had given consumers more than a month to move to new packs to avoid any inconvenience. However, two weeks of the time period have already passed.

In an update posted late yesterday, the regulator again reminded people not to wait for the ‘last minute’.

“Subscribers are requested to exercise their options well before 31st January 2019 to continue to view their favourite channels. Subscribers are also advised not to wait for the last minute to avoid any inconvenience,” it said in its second such reminder.

TRAI has reminded everyone that the new tariff order “has come into effect on Dec 29”.

TATA SKY

Meanwhile, India’s largest DTH operator Tata Sky continues to run a scroll on its home channel asking customers to be patient and wait for the operator to contact them.

“After the new TRAI tariff order becomes applicable and the channel prices are finalized, we will contact you and migrate your plan,” Tata Sky says in its scroll.

“This could take a few days. Till we connect with you, enjoy your current plan at the existing prices.”

The situation has confused users of Tata Sky, who are increasingly worried that they may not be able to shift in time.

“There are only 20 more days. How are they going to migrate millions of users,” asks Rajan EI, a Tata Sky user from Kerala.

LEGAL TANGLE

The reason for the confusion lies in a court case being heard by the Delhi High Court.

TRAI’s 2017 tariff order led to quite a legal tangle, with the order being challenged in the Madras High Court by Star India and in the Delhi High Court by Tata Sky and Bharti Airtel.

The challenges were largely similar, and focused on TRAI’s right to frame laws and regulations that put a limit on channel prices, discounts offered on channel prices, restrict packaging structure etc..

The petitions filed by Tata Sky and Airtel Digital at the Delhi High Court were clubbed together. However, the Delhi High Court said that it would first wait for the Madras High Court to deliver its judgment in the case filed by Star India.

After more than a year, the Madras High Court delivered a mixed judgment, upholding most of the tariff order and dismissing most of the jurisdiction-related challenges raised by Star India. The only provision that was struck down was about differential pricing of individual channels and channel packs.

This order was appealed by Star India in the Supreme Court.

However, the Supreme Court dismissed Star India’s appeal, and said the TRAI was well within its rights to frame the 2017 regulations that limited channel prices and imposed curbs on the practice of pricing individual channels very high, while offering discounts only on channel packs.

The Supreme Court also upheld TRAI’s point of view that the current practice of bundling was leading to market distortion and poor consumer choice and that pricing parity has to be enforced.

“The Explanatory Memorandum shows that the focus of the Authority has always been the provision of a level playing field to both broadcaster and subscriber. For example, when high discounts are offered for bouquets that are offered by the broadcasters, the effect is that subscribers are forced to take bouquets only, as the a-la-carte rates of the pay channels that are found in these bouquets are much higher. This results in perverse pricing of bouquets vis-à-vis individual pay channels. In the process, the public ends up paying for unwanted channels, thereby blocking newer and better TV channels and restricting subscribers’ choice. It is for this reason that discounts are capped. While doing so, however, full flexibility has been given to broadcasters to declare the prices of their pay channels on an a-la-carte basis. The Authority has shown that it does not encroach upon the freedom of broadcasters to arrange their business as they choose. Also, when such discounts are limited, a subscriber can then be free to choose a-la-carte channels of his choice,” the Supreme Court said in its order.

“Thus, the flexibility of formation of a bouquet, i.e., the choice of channels to be included in the bouquet together with the content of such channels, is not touched by the Authority. It is only efforts aimed at thwarting competition and reducing a-la-carte choice that are, therefore, being interfered with. Equally, when a ceiling of INR 19 on the maximum retail price of pay channels which can be provided as a part of a bouquet is fixed by the Authority, the Authority’s focus is to be fair to both the subscribers as well as the broadcasters. INR 19 is an improvement over the erstwhile ceiling of INR 15.12 fixed by the earlier regulation which nobody has challenged,” the order said, and added:

“To maintain the balance between the subscribers’ interests and broadcasters’ interests, again the Authority makes it clear that broadcasters have complete freedom to price channels which do not form part of any bouquet and are offered only on an a-la-carte basis. As market regulator, the Authority states that the impugned Regulation and Tariff Order are not written in stone but will be reviewed keeping a watch on the developments in the market. We are, therefore, clearly of the view that the Regulation and the Tariff Order have been made keeping the interests of the stakeholders and the consumers in mind and are intra vires the regulation power contained in Section 36 of the TRAI Act. Consequently, we agree with the conclusion of the learned Chief Justice and the third learned Judge of the Madras High Court that these writ petitions deserve to be dismissed.”

Unfortunately for TRAI, even as the Supreme Court said it was dismissing the writ petitions, it did not make it clear whether the order of the Madras High Court was still standing.

The Madras High Court had said that the TRAI did not have the right to impose parity of pricing between individual channel and packs — a key part of the tariff order without which the order would make little sense.

While the Supreme Court seemed to support TRAI’s arguments on why the provision was needed, it did not expressly spell out whether it was reinstating the provision or not, and overruling the Madras High Court’s order.

This has forced the TRAI to seek a clarification on the above point, which is due to a hearing early next week. If the Supreme Court upholds the curbs on differential pricing of channels and packs, it would immediately result in a sharp decline in channel prices and simplify the roll-out of the new tariff regime.

DELHI HIGH COURT

To make matters even more complicated, the Delhi High Court resumed hearing of the Tata Sky and Airtel Digital petitions, presumably because the two companies raised certain points that were not mentioned in Star India’s petition in the Madras High Court (subsequently rejected by the Supreme Court).

While the Delhi High Court cannot overrule the Supreme Court or strike down any of the core provisions that have been upheld by the Supreme Court, the continuing legislation in the Delhi High Court has added a touch of uncertainty to the whole process.

For example, Tata Sky and Airtel Digital sought for protection in the Delhi High Court from fines and punishments from TRAI for any failure to implement the tariff order, claiming that the case was still going on.

However, in its latest hearing, the Delhi High Court said that if Tata Sky was not implementing the tariff order, it was doing so at its own risk. The High Court also pointed out that Tata Sky customers could end up with blank screens on Feb 1 when the existing plans lapsed, in the absence of valid plans.

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