TELECOM DISPUTES SETTLEMENT
& APPELLATE TRIBUNAL
DATED 12TH FEBRUARY,2009
M.A.No.158 OF 2008
in
PETITION
No.62(C) OF 2008
M/s Sun Direct TV Pvt. Ltd. … Petitioner
Vs.
MSM Discovery Pvt. Ltd
…Respondent
BEFORE:
HON’BLE MR.JUSTICE ARUN KUMAR CHAIRPERSON
HON’BLE MR.G. D. GAIHA MEMBER
|
For Petitioner |
: |
Mr.Parag Tripathi,Senior
Advocate with Mrs.Narayani K. Sibal, Ms.Shruti Ranjan,Advocates |
|
For Respondent |
: |
Mr.N.K.Kaul,Senior Advocate with Mr.Gopal Jain,Mr.Kaushik
Mishra, Ms.Anu Mehta,Mr.A.J. Bhambhani. Ms.Nisha Bhambhani, Ms.Lakshita Sethi,Advocates |
ORDER
By this Miscellaneous
Application, the Applicant prays that the Respondent be directed to immediately
provide signals to the Applicant/Petitioner on à la carte basis as per the
terms of the Reference Interconnect Officer (RIO) and also for action to be initiated against the Respondent for
failure to comply with the judgement dated 1.10.2008 of this Tribunal.
2. Briefly, the
Applicant/Petitioner had filed Petition No. 62(C) of 2008 which was disposed of
by this Tribunal vide judgement dated 1.10.2008. In that judgement, we had held that the
Petitioner is entitled to the channel(s) of its choice from the Respondent on à
la carte basis and directed the Respondent to supply signals of such channel(s)
that the Petitioner may desire and as per the rates and terms of
3. The matter having come up
for hearing on 9.2.2009, the counsels for both the parties were heard. The contention of the Applicant is that
pursuant to the above judgement, it had corresponded with the Respondent
seeking all the channels of the
Respondent on à la carte basis and that in reply, the Respondent had sent a
draft agreement which was not in compliance with the directions of this
Tribunal or the terms stipulated in the
4. Countering this argument,
the Respondent states that the Applicant/Petitioner is seeking to reopen the
judgement of 1.10.2008. It is contended that the Petitioner had, vide its
letter of 7.10.2008, specifically asked for all
the channels on à la carte basis which was agreed to by the Respondent on
8.10.2008 and that the final agreement was signed, in the form of a Term Sheet,
also incorporating the findings given in the Tribunal’s judgement. The
choice of all the channels on à la
carte basis is also stated clearly in the affidavit. He underlines the fact
that both the letter and the affidavit are inked after the judgement of
1.10.2008. The counsel for Respondent referred to para
16 of the judgement and stated that the
Tribunal had held clearly that while the Petitioner is entitled to receive the
channel/s of its choice on à la carte basis, it is obliged to pay to the
Respondent as per the provisions of clause 13.2A.13 of the Interconnect Regulation,
2007. His contention is that after
having signed the agreement, the Petitioner/ Applicant is now trying to shift
the goal posts.
5. We have carefully
considered the matter. For purpose of
convenience, clauses 13.2A.11, 13.2A.12 and 13.2A.13 of the Interconnect
Regulation, 2007 are extracted below:-
13.2A.11 It shall
be mandatory on the part of the broadcasters to offer pay channels on à la
carte basis to direct to home operators and such offering of channels on à la
carte basis shall not prevent the broadcaster from offering such pay channels
additionally in the form of bouquets:
Provided
that no broadcaster shall, directly or indirectly, compel any direct to home
operator to offer the entire bouquet or bouquets offered by the broadcaster to
such operator in any package or scheme being offered by such direct to home
operator to its direct to home subscribers.
13.2A.12 The rates for pay channels on à la carte
basis and rates for bouquets shall be subject to the following conditions,
namely:-
(a) The sum of the à la carte rates of the pay
channels forming part of such a
bouquet shall in no case exceed one and half times of the rate of that bouquet
of which such pay channels are a part; and
(b) the à la carte rates of each pay channel,
forming part of such a bouquet, shall in no case exceed three times the average
rate of a pay channel of that bouquet of which such pay channel is a part and
the average rate of a pay channel of the bouquet be calculated in the following
manner, namely:-
If
the bouquet rate is Rs. ‘X’ per month per subscriber
and the number of pay channels is ‘Y’ in a bouquet, then the average pay
channel rate of the bouquet shall be Rs. ‘X’ divided
by number of pay channels ‘Y’.
13.2A.13 Every direct to home operator, who, after
the commencement of the Telecommunication (Broadcasting and Cable Services)
Interconnection (Fourth Amendment) Regulation, 2007 (9 of 2007), opts for one
bouquet or more bouquets (hereafter referred to as the opted bouquet) offered
by a broadcaster, may decide the packaging of the channels from such bouquet or
bouquets which may be offered by it to its direct to home subscribers:
Provided
that in a case where a direct to home operator--
(a) does
not offer such opted bouquet as a whole to its direct to home subscribers but
offers to such subscribers only certain channels comprised in such opted
bouquet; or
(b) packages
the channels comprised in such opted bouquet in a manner resulting in different
subscriber base for different channels comprised in such opted bouquet, then,
the payment, to the broadcaster for such entire opted bouquet by the direct to
home operator, shall be calculated on the basis of the subscriber base for the
channel which has the highest subscriber base amongst the channels comprised in
that bouquet.
(c) xxx xxx xxx”
6. It is clear from the
above that these clauses make it mandatory for broadcasters to offer pay
channels on à la carte basis to all DTH operators; that the sum of the à la
carte rates of pay channels shall in no case exceed one and a half times the
rate of that bouquet. Clause 13.2A.13 gives freedom to the DTH operator to
re-package the channels but the payment shall be calculated on the basis
of the subscriber base for the channel
which has the highest subscriber base among the channels comprised in that
bouquet.
7. While the counsel for
Petitioner states that the Petitioner wants 11 of the 15 channels on à la carte
basis, in its letters to the Respondent as well as in the affidavit, the
Petitioner had indicated that it wanted all
the channels of Respondent on à la carte basis. The bone of contention between the counsel
for Petitioner and counsel for Respondent is that the former states that having
opted for 11 channels, the payment is guided by clause
13.2A.12 whereas the latter states that clause 13.2A.13 applies. According to the counsel for Respondent, this
is exactly what the Tribunal had ordered on 1.10.2008.
“16. Another submission made by
the counsel for Respondent during the course of arguments is that the petition
is receiving the SET MAX channel at Rs. 8.50 per
subscriber per month but that he is charging at the rate of Rs.
20 per month from a subscriber and in the process profiteering at the expense
of Respondent. The counsel for
Petitioner points out that he is entitled to do so under the regulations and
that he will abide by the provisions of the interconnection regulations no. 9
of 2007. Clause 13.2A.13 of the
telecommunications (broadcasting and cable services) interconnection (fourth
Amendment) regulations, 2007 (no. 9 of 2007) reads as follows:
“… every direct to home
operator … may decide the packaging of the channels from such bouquet or
bouquets which may be offered by it to its direct to home subscribers: …(a)
… (b) packages the channels comprised in such opted bouquet in a manner
resulting in different subscriber base for different channels comprised in such
opted bouquet, then, the payment, to the broadcaster for such entire opted
bouquet by the direct to home operator, shall be calculated on the basis of the
subscriber base for the channels which has the highest the channels comprised
in that bouquet”.
It is therefore clear that the Petitioner is entitled to receive a
channel/channels of his choice from the Respondent and position them in the
manner of his choice but at the same time he is obliged to pay to the
broadcaster as per clause 13.2A.13 of the Telecommunications (Broadcasting and
Cable Services) Interconnection (Fourth Amendment) Regulations, 2007.”
8. In our view, if the
Petitioner had any difficulty with this Order, it should have filed a review
petition. It had not done so. It had sought from the Respondent all the channels on à la carte basis,
which is what has been incorporated in the Annexure ‘B’ of the Term Sheet dated
9.1.2009 which was signed between both the parties. While the contention of the
counsel for Petitioner is that the Term Sheet was signed without prejudice to
their rights and contentions and subject to the outcome of the order in
Petition No. 62(C)/2008 before this Tribunal, this in our view is not very
relevant. Clauses 9 and 11.3 of the Term Sheet read as follows:
9.
A-La-Carte Rates of Channels
“The à la carte rates of channels shall be as provided in Annexure-B
hereto, as modified from time to time.”
XXX
XXXX
XXXXX XXXXXX
11.3 “Average Number of Subscribers” means the
average number of Subscribers for a month calculated by dividing (i) the sum of (A) the total number of Subscribers on the
first day of such month and (B) the total number of subscribers on the last day
of such month by (ii) two. For purposes
of calculating the Average Number of Subscribers, the number of Subscribers in
a multi-unit dwelling and which is billed on a bulk single rate basis shall be
equal to the number of individual units in such dwelling and which is billed on
a bulk single rate basis shall be equal to the number of individual units in
such dwelling. The subscriber base of
the Channel having the highest subscriber base in the Operator’s platform shall
form the basis for the purposes of calculating the Average number of
Subscribers for all the Channels, in terms of Clause 13.2A.13 of The
Telecommunication (Broadcasting and Cable Services) Interconnection (Fourth Amendment)
Regulation, 2007 dated 3rd September, 2007 vide the Judgement of the
Hon’ble TDSAT dated 1.10.2008.” (emphasis supplied).
9. Annexure ‘B’ of the Term
Sheet lists all the 15 channels offered as a bouquet by the Respondent in the
10. It would be useful to
refer ourselves to the Explanatory Memorandum accompanying the Interconnect
Regulation, 2007, which explains the objects and reasons of the Regulation. The
Memorandum states that the objective in providing the à la carte choice is that
DTH operators should not be forced to take all the channels of every
broadcaster. It also refers to the judgement of this Tribunal in Petition No.
189 (C) of 2006 in the case of Tata Sky Limited versus Zee Turner Limited and
others wherein this Tribunal held that forcing a DTH operator to take all
channels of every broadcaster would increase the cost for DTH operator and also
to the consumer and that it would be anti-consumer. This Tribunal was also of the view that such
obligation would exhaust the transponder capacity of the DTH operator, which
may not be in its business interest. The Explanatory Memorandum states that
taking these and other aspects into consideration, the Telecom Regulatory
Authority of India (TRAI) felt that
provision of channels on à la carte basis also necessitates the need for
regulating the relationship between the price of channels on à la carte basis
and bouquet prices. Accordingly, clause 13.2A.12 was formulated to ensure that
while offering the channels à la carte, the broadcaster does not price it in
such a way that a DTH operator really has no choice. As indicated in the
Explanatory Memorandum, the provisions of Clause 13.2A.12 is for “regulating
the relationship between the prices of channels on à la carte basis and bouquet
prices so to ensure that the à la carte choice of channels does not become
illusory on account of perverse pricing
of channels and bouquet of channels.”The TRAI wanted,
at the same time, to protect the interests of the broadcasters by mandating
that the highest subscriber base for any channel in a bouquet shall be the
basis for payment to the broadcaster for the entire bouquet. This is what is
stipulated in clause 13.2A.13.
11. It is against this background
that Clauses 13.2A.11, 13.2A.12 and 13.2A.13 have to be read harmoniously. It
is clear that while clause 13.2A.12 is to protect the interests of the DTH
operators, clause 13.2A.13 is to protect the interests of the broadcasters.
While the former determines the pricing of each channel, the latter clearly
stipulates that in the event the DTH operator in turn bundles the channels into
its own bouquets, the highest subscriber base for any channel in the bouquet,
offered by the DTH operator, shall be the basis for payment to the broadcaster
for the entire bouquet. In our view, the term bouquet here includes the
channels which are part of the bouquet. If clause 13.2A.13 is to be interpreted
only to refer to an entire bouquet, there is no other clause dealing with the
basis for payment to the broadcaster, for channels which are picked up on à la
carte basis out of the bouquet offered by the broadcaster and which are then
repackaged by the DTH operator. A reading of the three clauses clearly shows
that while clause13.2A.11 offers the à la carte choice to the DTH operator,
clause 13.2A.12 prescribes a ceiling on the pricing of each such channel. On
the other hand, clause 13.2A.13 deals with the manner of paying to the
broadcaster if such channels or even the entire bouquet are /is repackaged by
the DTH operator, bundled into operator’s own bouquets and so offered by the DTH operator to its
customers. In our view, it does not matter whether the channels of the
broadcaster so picked up on à la carte basis and bundled by the DTH operator
constitute part or whole of the broadcaster’s bouquet. In fact, the very
purpose of providing à la carte choice is that the DTH operator would pick up
part of the bouquet.
12. As indicated by us above,
there is nothing in the pleadings or in the Term Sheet to show that the
Petitioner/Applicant sought only 11 channels. Even if it were so, it would not
make any difference. The exercise of choice by the Petitioner, in this case, to
take all channels of bouquet, but on à la carte basis, appears to be singularly
exceptional. This is particularly so
when we note that the cost of channels indicated in Annexure ‘B’ of the Term
Sheet works out to Rs. 67.95 per subscriber per month
whereas the cost of the entire bouquet itself is Rs.67 per subscriber per
month, as indicated in the
13. In our view, the choice of
all channels in the bouquet, on à la carte basis, is not what is intended by
the regulations and we accordingly hold that if an operator desires to take
channels on à la carte basis, it can only be for some, but not for all channels
that are offered in a bouquet. It is not necessary to stipulate the number of
such channels as long as it is less than all the channels in the bouquet. But,
in so far as payment by the DTH operator to the broadcaster is concerned, it is
unequivocal that the provisions of clause13.2A.13 shall apply irrespective of
whether the entire bouquet is taken or whether some channels of the bouquet are
opted for on à la carte basis. We do not agree with the contention of the
learned counsel for Petitioner/Applicant that the provisions of this clause
shall apply only where one or more entire bouquets are opted for.
14. We accordingly reiterate
the direction in Para 16 of our judgement dated 1.10.2008 in petition no. 62
(C) of 2008 that while the Petitioner/Applicant is free to repackage the
channels received from the broadcaster, it is obliged to pay to the broadcaster
as per clause13.2A.13 of the Telecommunication (Broadcasting and Cable
Services) Interconnection (Fourth Amendment) Regulation, 2007 (9 of 2007).
15. M.A no. 158 of 2008 in
Petition no. 62 (C) of 2008 is accordingly disposed of. No costs.
..……………..J
(Arun
Kumar)
Chairperson
…………….....
(J. S. Sarma)
Member
…………….....
(G. D. Gaiha)
Member