Bombay HC upholds constitutional validity of TRAI tariff order for TV broadcasters except ‘average price’ condition

The court struck down one of the pricing conditions in the NTO, which mandated that the maximum retail price (MRP) per month of any “a-la-carte channel forming a part of the bouquet” should not exceed a three-time of the average MRP of a pay channel of the bouquet.

The Bombay High Court on Wednesday upheld the constitutional validity of the new tariff order (NTO) of the Telecom Regulatory Authority of India (TRAI) published by it in January, 2020 except for one of the conditions regarding pricing.

The HC, while passing the verdict after over eight months since it reserved orders, clarified that TRAI will not take any “coercive action” against non-compliance by the broadcasters for another six weeks.

It struck down one of the pricing conditions in the NTO, which mandated that the maximum retail price (MRP) per month of any “a-la-carte channel forming a part of the bouquet” should not exceed a three-time of the average MRP of a pay channel of the bouquet.

This means that if the average MRP per month of channels in a bouquet is Rs 3, MRP of any individual channel within that bouquet could not be more than Rs 9. However, the HC held that such a condition was “arbitrary”.

“So far as the challenge to the 2020 regulation and tariff order is concerned, it fails except to the extent of the second twin condition, which is the average test,” the HC ruled. It means that broadcasters can now increase the price of a channel beyond any such average price.

The telecom regulator, last January – as per the new amended tariff order (NTO 2.0), among other conditions – had decided that only those channels that have maximum retail price of Rs 12 or less will be permitted to be part of the bouquet offered by broadcasters and it was to be made effective from March 1, 2020. The TRAI had lowered channel prices from Rs 19 to Rs 12.

The broadcasters had challenged the new tariff order by describing it as “unreasonable”.

On Wednesday, the bench of Justices A A Sayed and Anuja Prabhudesai, while granting partial relief to television broadcasters, set aside their other prayers, including challenging constitutional validity of Section 11 of TRAI, which enumerates functions and authority of the telecom regulator over broadcasters.

After the order was pronounced, television broadcasters who assailed the TRAI decision sought a stay on implementation of the judgment, so as to challenge the same in the Supreme Court. The bench allowed six-week time for the same and disposed the pleas.

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