1.The present civil appeals raise a challenge to certain clauses of the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, NATARAJAN Services (Eighth) (Addressable Systems) Tariff Order, 2017 (hereinafter referred to as the “Tariff Order”) dated 3.3.2017 made under the Telecom Regulatory Authority of India Act, 1997 (hereinafter referred to as the “TRAI Act”). Since regulations made under the TRAI Act were under challenge, a writ petition was filed before the Madras High Court in which the main issues that arose before the Division Bench were as a. Whether the Telecom Regulatory Authority of India (hereinafter referred to as “TRAI”) has the power to regulate only the ‘means of transmission’, viz. the ‘carriage’ aspect of broadcasting, and does not have the power to regulate the ‘content’ of the broadcast (i.e. the channel and/or its constituent programmes)? b. Whether the impugned clauses, in fact, and in effect, regulate the content of the broadcast (i.e. the channel and/or its constituent programmes)? c. Whether the impugned clauses have a direct effect on the pricing and marketing of a television channel by the broadcaster and hence is an illegal interference with the content of the broadcast (i.e. the channel and/or its constituent programmes)? The appellants have contended that the impugned clauses have the effect of regulating programmes and television channels, their pricing and their marketing and manner of offering/ bundling in the following illustrative manner, which is beyond the scope of TRAI’s jurisdiction of regulating “means of transmission”: a. TRAI has effectively fixed a uniform maximum retail price for each TV channel at INR 19/-; b. TRAI has stipulated that a television channel, which is individually priced at more than INR 19/-cannot be included in a collection of television channels (commonly referred to as a “bouquet”) and can only be offered on an individual/ a-la-carte/ stand-alone basis; c. TRAI has stipulated that the price of a bouquet of television channels shall not be less than 85% of the sum of a-la-carte prices of television channels comprised in the bouquet; d. TRAI has stipulated that the sum of discount on television channels and the distribution fee paid by broadcasters to a distributor of television channels, cannot exceed 35% of the maximum retail price of the television channel; e. Television channels cannot be priced differently for different distribution platforms; f. Channels of one broadcaster cannot be offered by another broadcaster in their bouquet of television channels, even after obtaining due authorization; g. Promotional schemes (i) can only be offered on a-la-carte prices for offering television channels and not on bouquet prices, (ii) cannot exceed 90 days at a time, and (iii) can be offered only twice in a year; h. High definition and standard definition channels cannot be in the same bouquet of television channels; i. Pay channels and free to air channels cannot be in the same bouquet.
2.The Division Bench consisting of M. Sundar, J. and Chief Justice Indira Banerjee differed in their conclusions. As per M. Sundar, J., it was held:-“8(a). Owing to the narrative, discussion and all that have been set out supra, those of the impugned provisions in the said regulations and said tariff order which touch upon content of the programmes of broadcasters are liable to be struck down as not in conformity with the parent Act / plenary Act. Therefore, clauses 6(1), second proviso to 6(1), proviso to 7(2), 7(4), first proviso to 7(4) and 10(3) of the said Regulations and clauses 3(1), 3(2)(b), second proviso to 3(2)(b), first proviso to 3(3), second proviso to 3(3), third proviso to 3(3), fourth proviso to 3(3), fifth proviso to 3(3), sixth proviso to 3(3) and 3(4) of the said tariff order are struck down as not in conformity with the parent act, i.e., TRAI Act. 8(b). With regard to the other two impugned provisions, as we were given to understand in the course of the hearing that they are relevant and necessary for some other clauses also other than those which have been put in issue in the instant writ petitions, they deserve to be saved to the extent they survive and serve the purpose other than serving implementation or any other purpose of the provisions which we have struck down. Therefore, the other impugned provisions, i.e., clause 11(2) in the said Regulations as also clause 4(2) in the said tariff order will continue to be in the books, but cannot be pressed into service for anything to do with the provisions which we have struck down supra. In other words, these provisions, i.e., clause 11(2) in the said Regulations as also clause 4(2) in the said tariff order can be operated if it can be operated for other provisions of the said Regulations and said tariff order, other than those which we have struck down.”
3.Differing from M. Sundar, J., the learned Chief Justice held:-“69. I am unable to agree with the conclusion of M. Sundar, J. that the provisions of the impugned Regulation and the impugned Tariff Order are not in conformity with the TRAI Act. In my view the impugned provisions neither touch upon the content of programmes of broadcasters, nor liable to be struck down. However, the clause putting cap of 15% to the discount on the MRP of a bouquet is arbitrary. The said provision is, in my view, not enforceable. In my considered view, the challenge to the impugned Regulation and the impugned Tariff Order fail. 70. Since we have not been able to agree, the writ petitions may be placed before a third Judge. Since the Chief Justice has delivered the dissenting judgment, the matter may be placed before the next available Judge in order of seniority for nomination of the Judge before whom the matter may be placed.”
4.The third Judge who therefore resolved the controversy in favour of the present respondents was M.M. Sundresh, J. After an exhaustive analysis of the arguments and the Acts in question, the third learned Judge sided with the Hon’ble Chief Justice and held:-“27.1. In her short, yet clear decision, the Hon'ble Chief Justice has held that there is sufficiency of the power under the TRAI Act as against the Indian Copyright Act, 1957. They travel in their respective paths, not intended to cross. The scope of the amendments made in the year 2012 along with Section 37 was correctly dealt with. This Court is of the view that the Copyright Act has rightly taken note of being the one which gives succour to the copyright holder as against the licensee, who may also be a BRR holder. It was rightly held that the provisions deal with the protection of the right of the copyright holder. It is rather pertinent to keep in mind the discussion on the Copyright Act, 1957, which is to be seen contextually qua the issue i.e., field being occupied. This Court also does not find anything wrong with the finding given on the so called concession given by the learned counsel for the TRAI being inconsequential, as the very jurisdiction of the Act itself was taken for consideration. The finding has to be seen contextually along with the other issues including the overall stand taken in the counter affidavit of respondents 1 to 4. Similarly the self imposed restrictions while invoking the extraordinary jurisdiction under Article 226 of the Constitution of India, deserves to be concurred with. 27.2. Though a submission has been made on the decision arrived at with respect to the fixation of cap at 15% discount on the MRP of the bouquet and the discounts given under the tariff order, the aforesaid decision cannot be a ground to hold that the ultimate conclusion arrived at on the other issues would necessarily follow suit. After all, as a reference Court, this Court is concerned with the views expressed by either of the learned Judges on the points of difference. Accordingly, the dissenting judgment stands concurred. 28. In the result, this reference qua points of difference stands ordered concurring with the dissenting judgment. No costs.”
5.Dr. A.M. Singhvi, learned Senior Advocate appearing on behalf of the appellants, has referred to several statutes and judgments in the course of his detailed submissions. According to the learned Senior Advocate, the TRAI Act was amended in 2000, as a result of which the TRAI Act was extended to broadcasting services which were undefined. By a Central Government notification dated 9.1.2004, the TRAI Act was expressly extended to broadcasting services, and certain functions were allocated to TRAI in addition to those contained in Section 11(1)(a) of the TRAI Act, as also to specify norms and periodicity of revision of rates of pay channels. According to the learned Senior Advocate, the definition of “telecommunication service” contained in Section 2(1)(k) of the TRAI Act only enables TRAI to regulate transmission or reception of broadcasting services, which essentially relates to regulatory measures taken for carriage of these signals. According to the learned Senior Advocate, his clients, namely, broadcasters, do not have to obtain the permission of the Government of India for uplinking their programmes with a particular satellite at a particular frequency, after which permission has to be obtained for downlinking such channels. At this point, the broadcaster, post downlinking, sends the signal to a multi-system operator (hereinafter referred to as an “MSO”), who in turn sends the signal to a cable TV operator from which it is beamed to the ultimate consumer watching the television programmes. For this, the broadcasters pay a distribution fee and a carriage fee for transportation of such signal, then send the signals to the MSO, who in turn sends it on to the cable TV operator, who beams the signal to the ultimate consumer. Distribution fee, carriage fee and networking capacity fee are all payable by the broadcaster, with which the broadcaster can have no quarrel. Equally, in a situation where direct to home services are provided, instead of the MSO one has persons, like, for example, TATA Sky, who then beam the signal directly to the consumer via satellite. TRAI under the TRAI Act cannot restrict pricing, bundling or packaging done by the broadcaster, as TRAI’s functions kick in under the Cable Television Networks (Regulation) Act, 1995 (hereinafter referred to as the “Cable TV Act”) only after the signal reaches the Cable TV operator. According to the learned Senior Advocate, at a stage anterior to the Cable TV operator beaming signals to the consumers, the broadcasters’ rights are not covered by the TRAI Act, which regulates only carriage, but by the Copyright Act, 1957, which regulates content. Dr. Singhvi took us through the Statement of Objects and Reasons for the TRAI Act, the Preamble thereof, and in particular Sections 2(1)(k), 11 and 36, to contend that this Act is “carriage-centric”, and is thus limited to regulation of service in transmission alone and does not extend to or include the subject matter or content of the transmission. The Copyright Act, on the other hand, is “content-centric” and deals with intellectual property rights which broadcasters have in the form of both copyright, as well as broadcast reproduction right inter alia under Section 37 of the Copyright Act. He relied heavily on the 2012 amendment to the Copyright Act, and in particular on Chapter 8 of the said Act. According to him, tariff, which relates to content, is governed by the Copyright Act and not by the TRAI Act, whereas transmission and delivery to the consumer, namely, carriage, alone pertains to TRAI’s jurisdiction. According to him, the impugned clauses of the Regulation as well as the Tariff Order impact and have the effect of regulating pricing and terms and conditions of licensing of TV channels, including their packaging, bundling and other manner of offering the said channels and their underlying programmes, being films, TV shows, etc., which are all aspects of intellectual property rights covered by the Copyright Act. He relied heavily upon the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 (hereinafter referred to as the “Sports Act”), by way of contrast, and stated that in this Act the definitions of “broadcaster”, “broadcasting”, “broadcasting service” and “content” made it clear that the reach of this Act was not merely confined to transmission of signal but extended to content as well, and argued that the difference therefore in the definitions contained in the Sports Act would show that the reach of the TRAI Act in contrast was limited and did not go to content. He also relied strongly upon the Cable TV Act and in particular on the definitions of “broadcaster” and “cable operator” therein, as well as Section 4A and 5 thereof, read with the Rules framed thereunder, which would show that “content” could certainly be regulated by TRAI under the Sports Act, but only in the manner provided by that Act and from the stage of the cable TV operator to the consumer and not before. It is thus clear that this being the case, the aforesaid regulations are outside the power of TRAI under the TRAI Act and must thus be struck down.
6.Shri P. Chidambaram, learned Senior Advocate appearing on behalf of some of the appellants, argued in support of Dr. Singhvi. He referred, in particular, to the definitions contained in Sections 2(dd) and 2(ff) of the Copyright Act and stated that “broadcast” would only mean keeping in readiness a set of TV channels, which may or may not be further carried by the MSO of the Cable TV Operator. According to him, in substance, the impugned Regulation and Tariff Order went beyond the jurisdiction of TRAI under the TRAI Act in that they sought to regulate “content” which would mean the original work such as a book, which could then be made into a film and finally broadcast by the appellants. Anything which impinges upon the aforesaid “content” in terms of making, buying, packaging or marketing, including licensing and assignment, would directly be covered by the Copyright Act and would, therefore, be outside the jurisdiction of the TRAI Act. He also strongly relied upon the judgment of this Court in Petroleum and Natural Gas Regulatory Board v. Indraprastha Gas Ltd., (2015) 9 SCC 209, to state that in a parallel fact circumstance, no tariff could be fixed by the Board for the commodity in question, but only for carriage of the said commodity through pipelines.
7.Shri Rakesh Dwivedi, learned Senior Advocate appearing on behalf of TRAI, countered each of these submissions. According to the learned Senior Advocate, a reading of the TRAI Act, together with the Statement of Objects and Reasons, would show that it was an Act conceived in the public interest in order to protect the interests of both service providers like the broadcasters here, as well as the consumers. Interest of the consumers of broadcasting services is therefore one of the paramount considerations when one comes to the authority or jurisdiction of TRAI under the said Act. According to the learned Senior Advocate, from the stage of the teleport from which a TV channel is uplinked by a broadcaster to a satellite and then downlinked to an MSO, permissions of the Central Government have to be taken for both uplinking and downlinking, under guidelines issued, which he took us through. The said guidelines would show that content is certainly regulated at this stage, as TV channels which are contrary to the security of the state, for example, would not be allowed to be beamed. According to him, regardless of whether the teleport from which the broadcaster’s signal is uplinked to a satellite is owned by the broadcaster, or is beamed by a person other than the broadcaster, a licence under Section 4 of the Telegraph Act and Section 5 of the Wireless Telegraphy Act is a sine qua non for operating a teleport and that therefore it is wholly fallacious to say that broadcasters need not be licencees under the Telegraph Act when they broadcast signals, either from their own teleport, or in conjunction with the owner of a teleport, which reach the ultimate consumer in India. According to the learned Senior Advocate, therefore, a constricted reading of the TRAI Act would stultify the nature of the beneficial legislation contained therein, which is to look after consumer interests as well. It is clear therefore that the definition of “telecommunication service” in Section 2(1)(k) cannot be read in the manner suggested by Dr. Singhvi, and would include, when it comes to broadcasters, beaming and transmission of signals from the teleport onwards right up till the stage of the MSO and the cable TV operator thereafter. He stressed upon Section 11(1)(b) in particular and stated that in order to ensure effective interconnection between different service providers, it was necessary to lay down regulations made under Section 36 of the Act that balanced the interest of broadcasters with the interest of consumers. He was at pains to point out that at no stage does either the Regulation or the Tariff Order seek to regulate, directly or indirectly, the content of the matter contained in the television channel that is beamed. As an example, he stated that neither the Regulation nor the Tariff Order interferes with what could be beamed by the broadcaster, but only to the manner of such beaming, keeping the interest of both the broadcaster as well as the ultimate consumer in mind. He also took us through the consultation papers which preceded the draft regulation which was framed, and pointed out that most of what was contained in the impugned Regulation and Tariff Order, was either requested by the broadcasters themselves or suggested by them to safeguard their interests, which TRAI has in principle followed. What is interesting to note is that it was only at a later stage, before the draft regulation was made, that references to content and the Copyright Act were made solely as an afterthought. He also relied upon the Cable TV Act and stated that it was important to note that it was the same regulator, namely, TRAI, who had to regulate the same signal from broadcaster to MSO, MSO to Cable TV operator and Cable TV operator to consumer. It would be extremely anomalous to find that from Cable TV operator onwards regulations such as those made by TRAI in the present case would pass muster, but not from the stage of broadcaster to MSO and MSO to Cable TV operator. He made it clear that the Sports Act would have no application in the present case as it dealt with the compulsory broadcast of certain sports events by broadcasters, which was why content was referred to in the said Act. He reiterated that at no stage does TRAI seek to or in fact regulate content of what is broadcasted so that any reference to this Act would be wholly irrelevant for the purpose of deciding this case. He also strongly relied upon Sections 3AA and 4 of the Telegraph Act to buttress his submission. According to him, since the Copyright Act operates in a distinct and separate field from the TRAI Act, equally the red herring of the Copyright Act would have no real relevance to the powers and functions of TRAI acting under the TRAI Act. He also cited certain decisions which will be referred to later in this judgment.
8.Shri Vikas Singh, learned Senior Advocate also appearing on behalf of TRAI, referred to Section 2(1)(k) of the TRAI Act in order to explain that the main provision and the proviso had to be harmonised in the manner suggested by the Delhi High Court in Star India Pvt. Ltd. v. TRAI, (2018) 146 DLT 455, and that, so harmonised, it is clear that the main provision did not include broadcasting services only for the time being. The proviso which was added by the Amendment Act of 2000 made it clear that the time had come to include broadcasting services as well. He further argued that the appellants in the present case had been taking contradictory stands throughout. As an example of such stand, he referred to an Order of the Competition Commission of India dated 27.2.2018, in which he referred to the stand of the appellants stating that the Competition Commission had no jurisdiction to look into pricing and the manner of offering TV channels, which lies in the domain of the sectoral regulator TRAI and is, therefore, an occupied field. He also referred to how the analogue system led to great leakages which led to less revenue and how the movement towards digitisation, therefore, gave broadcasters a great fillip in their revenue. He also referred to the consultations that went on between all stakeholders and consumers which led up to the impugned Regulation, which was a Regulation which balanced the interests of broadcasters and consumers.
9.Shri K.V. Vishwanathan, learned Senior Advocate appearing on behalf of the multi-system operators, placed strong reliance on Regulations 3(1) and 3(2) of the impugned Regulation, which, according to him, have not been challenged by the appellants. These regulations make it clear that the broadcasters have to offer TV channels on a non-discriminatory basis. The only reason why pricing is referred to in the impugned Regulation is to fulfil Regulation 3(2), which is to ensure that the offer made is non-discriminatory and, therefore, the Regulation and the Tariff Order read as a whole would, in fact, not impact content at all but be regulations for carriage of the signals stricto senso. He relied on judgments which held that TRAI’s regulatory powers are extremely wide. He also relied upon several provisions of the Copyright Act, including Section 52(1)(b), which made it clear that there would be no infringement of copyright, assuming the arguments of the appellants to be correct, when there is transient or incidental storage of a work or performance purely in the technical process of electronic transmission or communication to the public.
10.Shri Shyam Divan, learned Senior Advocate, appeared on behalf of direct-to-home companies. He referred to and relied upon various provisions of the Copyright Act, in particular, Section 37 thereof, making it clear that the broadcast reproduction right referred to is born only after the broadcast which has passed down from the broadcaster through the MSO to the cable operator to the consumer and/or through the DTH service provider to the consumer is over. He stressed the fact that this right comes in only when a re-broadcast or a subsequent second broadcast takes place after the original broadcast, which would not be covered by the Regulation or the Tariff Order in the present case.
11.Shri Krishnan Venugopal, learned Senior Advocate appearing for some of the consumers, referred to the Standing Committee of Parliament, in which it was pointed out that digitisation of cable TV services, by switching from the older analogue system in phases from 2012 onwards, had greatly increased the revenue of broadcasters and stated that these benefits could not possibly be denied by the broadcasters. In addition, the selfsame broadcasters have been regulated throughout and are raising questions relating to jurisdiction only after the present Regulation and Tariff Order have been made largely with their consent. He also cited certain decisions on the reach of TRAI under the TRAI Act.
12.Having heard learned counsel for the parties, it is important to first deal with the TRAI Act. In Secretary, Ministry of Information & Broadcasting, Govt. of India & Ors. v. Cricket Association of Bengal, (1995) 2 SCC 161, this Court referred to the pressing need to create a comprehensive enactment regulating airwaves, being public property. Public interest demanded that service providers be regulated and the usage of the airwaves through frequencies be regulated. A direction was thus issued to the Government of India to formulate a comprehensive enactment after noting the inadequacies that were felt in the Indian Telegraph Act, 1885. This Court stated: “Per Sawant, J.: 78. There is no doubt that since the airwaves/frequencies are a public property and are also limited, they have to be used in the best interest of the society and this can be done either by a central authority by establishing its own broadcasting network or regulating the grant of licences to other agencies, including the private agencies. What is further, the electronic media is the most powerful media both because of its audiovisual impact, and its widest reach covering the section of the society where the print media does not reach. The right to use the airwaves and the content of the programmes therefore, needs regulation for balancing it and as well as to prevent monopoly of information and views relayed, which is a potential danger flowing from the concentration of the right to broadcast/telecast in the hands either of a central agency or of few private affluent broadcasters. That is why the need to have a central agency representative of all sections of the society free from control both of the Government and the dominant influential sections of the society. 120. … Hence every citizen has a right to use the best means available for the purpose. At present, electronic media, viz., T.V. and radio, is the most effective means of communication. … 122. We, therefore, hold as follows: [i] The airwaves or frequencies are a public property. Their use has to be controlled and regulated by a public authority in the interests of the public and to prevent the invasion of their rights. Since the electronic media involves the use of the airwaves, this factor creates an in-built restriction on its use as in the case of any other public property. [ii] The right to impart and receive information is a species of the right of freedom of speech and expression guaranteed by Article 19(1)(a) of the Constitution. A citizen has the fundamental right to use the best means of imparting and receiving information and as such to have an access to telecasting for the purpose. However, this right to have an access to telecasting has limitations on account of the use of the public property, viz., the airwaves, involved in the exercise of the right and can be controlled and regulated by the public authority. This limitation imposed by the nature of the public property involved in the use of the electronic media is in addition to the restrictions imposed on the right to freedom of speech and expression under Article 19(2) of the Constitution. [iii] The Central Government shall take immediate steps to establish an independent autonomous public authority representative of all sections and interests in the society to control and regulate the use of the airwaves. [iv] Since the matches have been telecast pursuant to the impugned order of the High Court, it is not necessary to decide the correctness of the said order.
Per Jeevan Reddy J.:
201.1.(b) Airwaves constitute public property and must be utilised for advancing public good. No individual has a right to utilise them at his choice
and pleasure and for purposes of his choice
including profit…
201.1.(c) Broadcasting media is inherently different
from Press or other means of communication/
information. The analogy of press is misleading and
inappropriate. This is also the view expressed by
several Constitutional Courts including that of the
United States of America.
201.4. The Indian Telegraph Act, 1885 is totally
inadequate to govern an important medium like the
radio and television, i.e., broadcasting media. The
Act was intended for an altogether different purpose
when it was enacted. This is the result of the law in
this country not keeping pace with the technological
advances in the field of information and
communications. While all the leading democratic
countries have enacted laws specifically governing
the broadcasting media, the law in this country has
stood still, rooted in the Telegraph Act of 1885.
Except Section 4(1) and the definition of telegraph,
no other provision of the Act is shown to have any
relevance to broadcasting media. It is, therefore,
imperative that the parliament makes a law placing
the broadcasting media in the hands of a
public/statutory corporate or the corporations, as the
case may be. This is necessary to safeguard the
interests of public and the interests of law as also to
avoid uncertainty, confusion and consequent
litigation.”
13. Accordingly, the Government formulated a National
Telecom Policy in 1994 and then decided to promulgate an
ordinance which led to the enactment of the TRAI Act. The
Statement of Objects and Reasons of this Act stressed:
“1. In the context of the National Telecom Policy,
1994, which amongst other things, stresses on
achieving the universal service, bringing the quality
of telecom services to world standards, provisions
of wide range of services to meet the customers
demand at reasonable price, and participation of the
companies registered in India in the area of basic as
well as value added telecom services as also
making arrangements for protection and promotion
of consumer interest and ensuring fair competition,
there is a felt need to separate regulatory functions
from service providing functions which will be in
keeping with the general trend in the world. In the
multi-operator situation arising out of opening of
basic as well as value added services in which
private operator will be competing with Government
operators, there is a pressing need for an
independent telecom regulatory body for regulation
of telecom services for orderly and healthy growth
of telecommunication infrastructure apart from
protection of consumer interest.
2. In view of above, it was proposed to set up an
independent Telecom Regulatory Authority as a
non-statutory body and for that purpose the Indian
Telegraph (Amendment) Bill, 1995 was introduced
and then passed by Lok Sabha on 6th August, 1995.
At the time of consideration of the aforesaid Bill in
Rajya Sabha, having regard to the sentiments
expressed by the Members of Rajya Sabha and of
the views of the Standing Committee on
Communication which expressed a hope that steps
will be taken to set up a Statutory Authority, it is
proposed to set up the Telecom Regulatory Authority of India as a statutory authority.
3. The proposed Authority will consist of a Chairperson and minimum two and maximum four members. A person who is or has been a Judge of the Supreme Court or Chief Justice of a High Court will be eligible to be appointed as a Chairperson of the authority. A member shall be a person who has held as the post of Secretary or Additional Secretary to the Government of India or any equivalent post in the Central Government or the State Government for minimum period of three years.
4. The powers and functions of the Authority, inter alia, are-
(i) ensuring technical compatibility and
effective inter-relationship between different
service providers;
(ii) regulation of arrangement amongst service
providers of sharing their revenue derived
from providing telecommunication service;
(iii) ensuring compliance of licence conditions
by all service providers;
(iv) protection of the interest of the consumers
of telecommunication service;
(v) settlement of disputes between service
(vi) fixation of rates for providing
telecommunication service within India and
outside India;
(vii) ensuring effective compliance of universal
service obligations.
5. The Authority shall have an inbuilt dispute
settlement mechanism including procedure to be
followed in this regard as well as a scheme of
punishment in the event of non-compliance of its
order.
6. The Authority will have to maintain transparency
while exercising its powers and functions. The
powers and functions would enable the Authority to
perform a role of watchdog for the telecom sector in
an effective manner.
7. In order that the Authority functions in a truly
independent manner and discharges its assigned
responsibilities effectively, it is proposed to vest the
Authority with a statutory status.
8. As the Parliament was not in session, the
President promulgated the Telecom Regulatory
Authority of India Ordinance, 1996 on the 27th
January, 1996 for the aforesaid purpose.
9. The Bill seeks to replace the said Ordinance.”
14. The said Act was amended by Act 2 of 2000, which
substituted the Preamble of the TRAI Act thus:
“An Act to provide for the establishment of
the Telecom Regulatory Authority of India and the
Telecom Disputes Settlement and Appellate
Tribunal to regulate the telecommunication services,
adjudicate disputes, dispose of appeals and to
protect the interests of service providers and
consumers of the telecom sector, to promote and
ensure orderly growth of the telecom sector and for
matters connected therewith or incidental thereto”
15. The Amendment Act of 2000 added a proviso to the
definition of “telecommunication service” under Section 2(1)(k),
permitting the Central Government to notify other services to be
telecommunication services including broadcasting services.
The relevant provisions of the TRAI Act are, therefore, set out
hereinbelow:
“2(1) In this Act, unless the context otherwise
requires,-
(e) “licensee” means any person licensed under
sub-section (1) of Section 4 of the Indian Telegraph
Act, 1885 (13 of 1885) for providing specified public
telecommunication services;
(ea) “licensor” means the Central Government or
the telegraph authority who grants a licence under
Section 4 of the Indian Telegraph Act, 1885;
(j) “service provider” means the Government as a
service provider and includes a licensee;
(k) “telecommunication service” means service of
any description (including electronic mail, voice
mail, data services, audio tax services, video tax
services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electromagnetic means but shall not include broadcasting services.
Provided that the Central Government may notify other service to be telecommunication service including broadcasting services.
11. Functions of Authority.— (1) Notwithstanding anything contained in the Indian Telegraph Act, 1885 (13 of 1885), the functions of the Authority shall be to—
(a) make recommendations, either suo motu or on a request from the licensor, on the following matters, namely:—
(i) need and timing for introduction of new
service provider;
(ii) terms and conditions of licence to a service
provider;
(iii) revocation of licence for non-compliance
of terms and conditions of licence;
(iv) measures to facilitate competition and
promote efficiency in the operation of
telecommunication services so as to facilitate
growth in such services;
(v) technological improvements in the services
provided by the service providers;
(vi) type of equipment to be used by the
service providers after inspection of
equipment used in the network;
(vii) measures for the development of
telecommunication technology and any other
matter relatable to telecommunication industry
in general;
(viii) efficient management of available
spectrum;
(b) discharge the following functions, namely:—
(i) ensure compliance of terms and conditions
of licence;
(ii) notwithstanding anything contained in the
terms and conditions of the licence granted
before the commencement of the Telecom
Regulatory Authority of India (Amendment)
Act, 2000, fix the terms and conditions of
inter-connectivity between the service
(iii) ensure technical compatibility and
effective inter-connection between different
service providers;
(iv) regulate arrangement amongst service
providers of sharing their revenue derived
from providing telecommunication services;
(v) lay-down the standards of quality of
service to be provided by the service
providers and ensure the quality of service
and conduct the periodical survey of such
service provided by the service providers so
as to protect interest of the consumers of
telecommunication service;
(vi) lay-down and ensure the time period for
providing local and long distance circuits of
telecommunication between different service
(vii) maintain register of inter-connect
agreements and of all such other matters as
may be provided in the regulations;
(viii) keep register maintained under clause
(vii) open for inspection to any member of
public on payment of such fee and compliance
of such other requirement as may be provided
in the regulations;
(ix) ensure effective compliance of universal
service obligations;
(c) levy fees and other charges at such rates and in respect of such services as may be determined by regulations;
(d) perform such other functions including such administrative and financial functions as may entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act:
Provided that the recommendations of the Authority specified in clause (a) of this sub-section shall not be binding upon the Central Government:
Provided further that the Central Government shall seek the recommendations of the Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of new licence to be issued to a service provider and the Authority shall forward its recommendations within a period of sixty days from the date on which that Government sought the recommendations:
Provided also that the Authority may request the Central Government to furnish such information or documents as may be necessary for the purpose of making recommendations under sub-clauses (i) and (ii) of clause (a) of this sub-section and that Government shall supply such information within a period of seven days from receipt of such request:
Provided also that the Central Government may issue a licence to a service provider if no recommendations are received from the Authority within the period specified in the second proviso or within such period as may be mutually agreed upon between the Central Government and the Authority:
Provided also that if the Central Government, having considered that recommendation of the Authority, comes to a prima facie conclusion that such recommendation cannot be accepted or needs modifications, it shall refer the recommendation back to the Authority for its reconsideration, and the Authority may, within fifteen days from the date of receipt of such reference, forward to the Central Government its recommendation after considering the reference made by that Government. After receipt of further recommendation if any, the Central Government shall take a final decision.
(2) Notwithstanding anything contained in the Indian Telegraph Act, 1885 (13 of 1885), the Authority may, from time to time, by order, notify in the Official Gazette the rates at which the telecommunication services within India and outside India shall be provided under this Act including the rates at which messages shall be transmitted to any country outside India:
Provided that the Authority may notify different rates for different persons or class of persons for similar telecommunication services and where different
rates are fixed as aforesaid the Authority shall record the reasons therefor.
(3) While discharging its functions under subsection (1), or sub-section (2) the Authority shall not act against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality.
(4) The Authority shall ensure transparency while exercising its powers and discharging its functions.
36. Power to make regulations.— (1) The Authority may, by notification, make regulations consistent with this Act and the rules made thereunder to carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely :—
(a) the times and places of meetings of the Authority and the procedure to be followed at such meetings under sub-section (1) of Section 8, including quorum necessary for the transaction of business;
(b) the transaction of business at the meetings of the Authority under sub-section (4) of Section 8;
(d) matters in respect of which register is to be maintained by the Authority under sub-clause (vii) of clause (b) of sub-section (1) of Section 11;
(e) levy of fee and lay down such other requirements on fulfilment of which a copy of
register may be obtained under sub-clause (viii) of
clause (b) of sub-section (1) of Section 11;
(f) levy of fees and other charges under clause (c)
of sub-section (1) of Section 11.”
16. The proviso to section 2(1)(k) was challenged in the Delhi
High Court, which challenge was repelled by the Delhi High
Court in Star India Private Limited v. TRAI & Ors., (supra.).
An SLP from the said judgment was also dismissed. Acting
under Section 2(1)(k), the Central Government issued two
notifications on 9.1.2004. S.O.44(E) reads as follows:-
“S.O. 44(E). – In exercise of the powers conferred
by the proviso to clause (k) of sub-section (1) of
section 2 of the Telecom Regulatory Authority of
India Act, 1997 (24 of 1997), the Central
Government hereby notifies the broadcasting
services and cable services to be
telecommunication service.
[Notification No. 39 issued by Ministry of
communication and Information Technology dated 9
January 2004. S.O. No. 44(E) issued by TRAI, vide
F.No. 13-1/2004]”
S.O.45(E) reads as follows:-
“S.O.45(E). – In exercise of the powers conferred by
clause (d) of sub-clause (1) of section 11 of the
Telecom Regulatory Authority of India Act, 1997 (24
of 1997) (hereinafter referred to as the Act), the
Central Government hereby entrusts the following additional functions to the Telecom Regulatory Authority of India, established under Sub-section (1) of Section 3 of the Act, in respect of broadcasting services and cable services, namely:-
(1) Without prejudice to the provisions contained in clause (a) of sub-section (1) of section 11 of the Act, to make recommendation regarding –
(a) the terms and conditions on which the
‘addressable systems’ shall be provided to
customers.
Explanation – For the purposes of this clause, ‘addressable system’ with its grammatical variation, means an electronic device or more than one electronic devices put in an integrated system through which signals of cable television network can be sent in encrypted or unencrypted form, which can be decoded by the device or devices at the premises of the subscriber within the limits of authorisation made, on the choice and request of such subscriber, by the cable operator for that purpose to the subscriber.
(b) the parameters for regulating maximum
time for advertisements in pay channels as
well as other channels.
(2) Without prejudice to the provisions of subsection (2) of section 11 of the Act, also to specify standard norms for, and periodicity of, revision of rates of pay channels, including interim measures.
[Notification No. 39 issued by Ministry of Communication and Information Technology, dated 9 January 2004, S.O. No. 45(E) issued by TRAI, vide F.No. 13-1/2004]”
17. We are concerned with the impugned Regulation that was
framed on 3.3.2017 under Section 36 of the Act together with
the Tariff Order made on the same date. The regulations with
which we are directly concerned are set out hereunder:
“3. General obligations of broadcasters.— (1) No
broadcaster shall engage in any practice or activity
or enter into any understanding or arrangement
including exclusive contracts with any distributor of
television channels that prevents any other
distributor of television channels from obtaining
signals of television channel of such broadcaster for
distribution.
(2) Every broadcaster shall, within sixty days of
receipt of written request from a distributor of
television channels for obtaining signals of
television channel or within thirty days of signing of
interconnection agreement with the distributor, as
the case may be, provide, on non-discriminatory
basis, the signals of television channel to the
distributor or convey the reasons in writing for
rejection of the request if the signals of television
channel are denied to such distributor:
Provided that imposition of any term or condition by
the broadcaster, which is unreasonable, shall be
deemed to constitute a denial of request:
Provided further that this sub-regulation shall not
apply to a distributor of television channels, who
requests signals of a particular television channel
from a broadcaster while at the same time demands
carriage fee for distribution of that television channel
or who is in default of payment to the broadcaster
and continues to be in such default.
(3) If a broadcaster, proposes or stipulates for, directly or indirectly, placing the channel in any specified position in the electronic programme guide or assigning a particular channel number, as a precondition for providing signals, such pre-condition shall also amount to imposition of unreasonable condition.
Explanation: For removal of doubt, it is clarified that if a pay broadcaster offers discount, in nondiscriminatory manner, through its reference interconnect offer on the maximum retail price of pay channel, within the limit as specified in subregulation (4) of regulation 7, to distributors of television channels for placing the channel in any specified position in the electronic programme guide or assigning particular channel number, such offer of discount shall not be considered a pre-condition.
(4) No broadcaster shall propose, stipulate or demand for, directly or indirectly, packaging of the channel in any particular bouquet offered by the distributor of television channels to subscribers.
(5) No broadcaster shall propose, stipulate or demand for, directly or indirectly, guarantee of a minimum subscriber base or a minimum subscription percentage for its channel or bouquet.
Explanation: For removal of doubt, it is clarified that the subscription percentage of a channel or bouquet refers to the percentage of subscribers subscribing to a specific channel or bouquet out of average active subscriber base of a distributor.
6. Compulsory offering of channels on a-la-carte basis. - (1) Every broadcaster shall offer all its television channels on a-la-carte basis to the distributors of television channels: Provided that the broadcaster may also offer its pay channels, in addition to offering of pay channels on a-la-carte basis, in form of bouquet:
Provided further that such bouquet shall not contain—
(a) any ‘free-to-air channel’; and
(b) High definition (HD) and Standard
Definition (SD) variants of the same channel.
7. Publication of reference interconnection offer by broadcaster for pay channels.— (1) Every broadcaster shall publish, on its website, reference interconnection offer, in conformance with the regulations and the tariff orders notified by the Authority, for providing signals of all its pay channels to the distributor of television channels—
(a) within sixty days of commencement of
these regulations; and
(b) before launching of a pay channel. and
simultaneously submit, for the purpose of
record, a copy of the same to the Authority.
(2) The reference interconnection offer, referred to in sub-regulation (1), shall contain the technical and commercial terms and conditions relating to, including but not limited to, maximum retail price per month of pay channel, maximum retail price per month of bouquet of pay channels, discounts, if any, offered on the maximum retail price to distributors, distribution fee, manner of calculation of 'broadcaster’s share of maximum retail price', genre of pay channel and other necessary conditions:
Provided that a broadcaster may include in its reference interconnection offer, television channel or bouquet of pay channels of its subsidiary
company or holding company or subsidiary company of the holding company, which has obtained, in its name, the downlinking permission for its television channels from the Central Government, after written authorization by them.
Explanation: For the purpose of these regulations, the definition of “subsidiary company” and “holding company” shall be the same as assigned to them in the Companies Act, 2013 (18 of 2013).
(3) Every broadcaster shall declare a minimum twenty percent of the maximum retail price of pay channel or bouquet of pay channels, as the case may be, as the distribution fee:
Provided that the distribution fee declared by the broadcaster shall be uniform across all the distribution platforms.
(4) It shall be permissible to a broadcaster to offer discounts, on the maximum retail price of pay channel or bouquet of pay channels, to distributors of television channels, not exceeding fifteen percent of the maximum retail price:
Provided that the sum of distribution fee declared by a broadcaster under sub-regulation (3) and discounts offered under this sub-regulation in no case shall exceed thirty five percent of the maximum retail price of pay channel or bouquet of pay channels, as the case may be:
Provided further that offer of discounts, if any, to distributors of television channels, shall be on the basis of fair, transparent and non-discriminatory terms:
Provided also that the parameters of discounts shall be measurable and computable.
(5) Every broadcaster of pay channel shall mention in its reference interconnection offer the names of persons, telephone numbers, and e-mail addresses designated to receive request for receiving interconnection from distributors of television channels and grievance redressal thereof.
(6) The terms and conditions mentioned in the reference interconnection offer shall include all necessary and sufficient provisions, which make it a complete interconnection agreement on signing by other party, for distribution of television channels.
(7) The Authority, suo-motu or otherwise, may examine the reference interconnection offer submitted by a broadcaster and on examination if the Authority is of the opinion that the reference interconnection offer is not in conformance with the provisions of the regulations and the tariff orders notified by the Authority, it may, after giving an opportunity of being heard to such broadcaster, direct such broadcaster to modify the said reference interconnection offer and such broadcaster shall amend reference interconnection offer accordingly and publish the same within fifteen days of receipt of the direction.
(8) Any amendment to the reference interconnection offer shall be published in the same manner as provided under the sub-regulations (1), (2), (3), (4), (5) and (6) of this regulation.
(9) In the event of any amendment to the reference interconnection offer by a broadcaster under subregulation (8), the broadcaster shall give an option to all distributors, with whom it has written interconnection agreements in place, within thirty days from the date of such amendment and it shall be permissible to such distributors to enter into fresh interconnection agreement in accordance with
the amended reference interconnection offer, within thirty days from the date of receipt of such option, or continue with the existing interconnection agreement.
10. Interconnection agreement between broadcaster and distributor of television channels.— (1) No broadcaster shall provide signals of pay channels to a distributor of television channels without entering into a written interconnection agreement with such distributor of television channels.
(2) No distributor of television channels shall distribute pay channels of any broadcaster without entering into a written interconnection agreement with such broadcaster.
(3) It shall be mandatory for a broadcaster and a distributor of television channels to enter into written interconnection agreement on a-la-carte basis for distribution of pay channels.
11. Territory of interconnection agreement.— (1) The interconnection agreement signed between a broadcaster and a multi-system operator shall include the following details for describing the territory for the purpose of distribution of signals of television channels –
(a) the registered area of operation of the
multi-system operator as mentioned in the
registration granted by the Central
Government;
(b) the names of specific areas for which
distribution of signals of television channels
has been agreed, initially, at the time of
signing of the interconnection agreement; and
(c) the names of the corresponding states/
union territories in which such agreed areas
as referred in clause (b) of this sub-regulation
are located.
(2) It shall be permissible to the multi-system operator to distribute the channels beyond the areas agreed under sub-regulation (1), by giving a written notice to the broadcaster, after thirty days from the date of receipt of such written notice by the broadcaster and the said notice shall deemed to be an addendum to the existing interconnection agreement:
Provided that such areas fall within—
(a) the registered area of operation of the
multi-system operator; and
(b) the states or union territories in which the
multi-system operator has been permitted to
distribute the signals of television channels
under the interconnection agreement.
(3) Nothing contained in sub-regulation (2) shall apply if written objections with reasons from the broadcaster have been received by the multisystem operator during the said thirty days notice period: Provided that any objection by the broadcaster, which is unreasonable, shall be deemed to constitute a denial of provisioning of signals beyond the areas agreed under the clause (b) of sub-regulation (1).”
18. The relevant clauses of the Tariff Order with which we are
directly concerned are set out hereunder:
“3. Manner of offering of channels by
broadcasters.--- (1) Every broadcaster shall offer
all its channels on a-la-carte basis to all distributors
of television channels.
(2) Every broadcaster shall declare ----
(a) the nature of each of its channel either as
‘free-to-air’ or ‘pay’; and
(b) the maximum retail price, per month,
payable by a subscriber for each of its pay
channel offered on a-la-carte basis:
Provided that the maximum retail price of a pay
channel shall be more than ‘zero’:
Provided further that the maximum retail price of a
channel shall be uniform for all distribution
platforms.
(3) It shall be permissible for a broadcaster to offer
its pay channels in the form of bouquet(s) and
declare the maximum retail price(s), per month, of
such bouquet(s) payable by a subscriber:
Provided that, while making a bouquet of pay
channels, it shall be permissible for a broadcaster to
combine pay channels of its subsidiary company or
holding company or subsidiary company of the
holding company, which has obtained, in its name,
the downlinking permission for its television
channels, from the Central Government, after
written authorization by them, and declare
maximum retail price, per month, for such bouquet
of pay channels payable by a subscriber:
Provided that such bouquet shall not contain any pay channel for which maximum retail price per month is more than rupees nineteen:
Provided further that the maximum retail price per month of such bouquet of pay channels shall not be less than eighty five percent of the sum of maximum retail prices per month of the a-la-carte pay channels forming part of that bouquet:
Provided further that the maximum retail price per month of such bouquet of pay channels shall be uniform for all distribution platforms:
Explanation: For the purpose of this Order, the definition of “subsidiary company” and “holding company” shall be the same as assigned to them in the Companies Act, 2013 (18 of 2013).
(4) It shall be permissible for a broadcaster to offer promotional schemes on maximum retail price(s) per month of its a-la-carte pay channel(s):
Provided that period of any such scheme shall not exceed ninety days at a time:
Provided further that the frequency of any such scheme by the broadcaster shall not exceed twice in a calendar year:
Provided further that the price(s) of a-la-carte pay channel(s) offered under any such promotional scheme shall be considered as maximum retail price(s) during the period of such promotional scheme:
Provided also that the provisions of Regulations and Tariff Orders notified by the Authority shall be applicable on the price(s) of a-la-carte pay channel(s) offered under any such promotional scheme.
(5) Every broadcaster, before making any change in the nature of a channel or in the maximum retail price of a pay channel or in the maximum retail price of a bouquet of pay channels or in the composition of a bouquet of pay channels, as the case may be, shall follow the provisions of all the applicable Regulations and Orders notified by the Authority, including but not limited to the publication of Reference Interconnection Offer.
4. Declaration of network capacity fee and manner of offering of channels by distributors of television channels.--- (1) Every distributor of television channels shall declare network capacity fee, per month, payable by a subscriber for availing a distribution network capacity so as to receive the signals of television channels:
Provided that the network capacity fee, per month, for network capacity upto initial one hundred SD channels, shall, in no case, exceed rupees one hundred and thirty, excluding taxes:
Provided further that the network capacity fee, per month, for network capacity in the slabs of twenty five SD channels each, beyond initial one hundred channels capacity referred to in first proviso to subclause (1), shall, in no case, exceed rupees twenty excluding taxes:
Provided also that one HD channel shall be treated equal to two SD channels for the purpose of calculating number of channels within the distribution network capacity subscribed.
(2) Every distributor of television channels shall offer all channels available on its network to all subscribers on a-la-carte basis and declare distributor retail price, per month, of each pay channel payable by a subscriber:
Provided that the distributor retail price, per month, payable by a subscriber to a distributor of television channels for subscribing to a pay channel shall, in no case, exceed the maximum retail price, per month, declared by the broadcasters for such pay channel.
(3) Every distributor of television channels shall offer to all subscribers each bouquet of pay channels offered by a broadcaster, and for which interconnection agreement has been signed with that broadcaster, without any alteration in its composition and declare the distributor retail price, per month, for such bouquet payable by a subscriber:
Provided that the distributor retail price, per month, payable by a subscriber to a distributor of television channels for subscribing to a bouquet of pay channels offered by the broadcaster shall in no case exceed the maximum retail price, per month, declared by the broadcasters for such bouquet of pay channels:
any pay channel for which maximum retail price per month declared by the broadcaster is more than rupees nineteen:
(4) It shall be permissible for a distributor of television channels to offer bouquet(s) formed from pay channels of one or more broadcasters and declare distributor retail price(s) , per month, of such bouquet(s) payable by a subscriber:
Provided that such bouquet shall not contain any pay channel for which maximum retail price per month declared by the broadcaster is more than rupees nineteen:
Provided further that the distributor retail price per month of such bouquet of pay channels shall not be less than eighty five percent of the sum of distributor retail prices per month of a-la-carte pay channels and bouquet(s) of pay channels forming part of that bouquet:
Provided further that the distributor retail price per month of a bouquet of pay channels offered by a distributor of television channels shall, in no case, exceed the sum of maximum retail prices per month of a-la-carte pay channels and bouquet(s) of pay channels, declared by broadcasters, forming part of that bouquet:
Explanation: For the removal of doubt it is hereby clarified that a distributor of television channels while forming bouquet under this clause shall not break a bouquet of pay channels offered by a broadcaster to form two or more bouquet(s) at distribution level.
(5) It shall be permissible for a distributor of television channels to offer bouquet(s) formed from free-to-air channels of one or more broadcasters.
(6) No distributor of television channels shall charge any amount, other than the network capacity fee, from its subscribers for subscribing to free-to-air channels or bouquet(s) of free-to air channels.
(7) Within the distribution network capacity subscribed, in addition to channels notified by Central Government to be mandatorily provided to all the subscribers, a subscriber shall be free to choose any free-to-air channel(s), pay channel(s), or bouquet(s) of channels offered by the broadcaster(s) or bouquet(s) of channels offered by distributors of television channels or a combination thereof:
Provided that if a subscriber opts for pay channels or bouquet of pay channels, he shall be liable to pay an amount equal to sum of distributor retail price(s) for such channel(s) and bouquets in addition to network capacity fee.
(8) Subject to sub-clause (1) of clause 4, a distributor of television channels shall not increase the network capacity fee for a period of six months from the date of such notification: Provided that a distributor of television channels, before making any change in the network capacity fee, shall at least thirty days prior to the scheduled change---
(a) inform the Authority; and
(b) inform the subscribers by running scroll on
the channel.”
19. In the judgment of Sundar,J., in the Division Bench of the
Madras High Court, a useful table is set out which not only
states the provisions that have been challenged, but the
specific ground on which they have been challenged. We,
therefore, reproduce this table in our judgment:-
“Provisions of the Interconnection Regulation which
Regulate content
Sl. Provision Ground
No.
1. 6(1) All channels (pay Impinges upon broadcaster's
channels and free-to-air ability to package a TV
channels) to be offered channel. No such restriction on
on a-la-carte basis. broadcaster under Copyright
Act.
2. Second proviso to 6(1) Impinges upon broadcaster's
- Bouquet of pay ability to package a TV
channels shall not have channel. No such restriction on
free-to-air channels. broadcaster under Copyright
- HD and SD variant of Act.
same channel cannot be
in same bouquet.
3. Proviso to 7(2) - Impinges upon broadcaster's
Bundling of third party ability to package a TV
channels prohibited. channel. No such restriction on
broadcaster under Copyright
Act.
4. 7(4) - Broadcaster can Directly regulates the pricing of
offer discounts to a TV channel, thereby also
distributor not exceeding regulating pricing of individual
15% of MRP. programmes.
5. First proviso to 7(4) - Directly regulates the pricing of
Sum of discount under a TV channel, thereby also
7(4) and distribution fee regulating pricing of individual
under 7(3) shall not programmes.
exceed 35% of MRP. 6. 10(3) r/w 6(1) - Impinges upon broadcaster's
Mandatory to enter into freedom to offer pay channels
agreement with DPO on only as a part of bouquet and
an a-la-carte basis for not as a-la-carte. No such
pay channels. restriction on broadcaster
under Copyright Act. 7. 11(2) - Deemed Directly impinges the
extension of broadcaster's right under 19(2)
geographical territory. to designate the geographical
territory of exploitation.
Provisions of the Tariff Order which regulate content
Sl. Provision Ground No.
1. 3(1) - All channels to be Impinges upon broadcaster's
offered on a-la-carte ability to package a TV
basis channel. No such restriction
on broadcaster under 2. 3(2)(b) - Declaration of Impinges upon broadcaster's
MRP of a-la-carte freedom to offer pay channels
channel only as a part of bouquet and
not as a-la-carte. No such
restriction on broadcaster
under Copyright Act. 3. Second proviso to Under Section 33A read with
3(2)(b) - MRP of all pay Rule 56 of the Copyright
channels to be uniform Rules, 2013, broadcaster has
across distribution the right to decide separate
platforms. MRP for different category of
audience. 4. First proviso to 3(3) - Impinges upon broadcaster's
Bundling of third party ability to package a TV
channels prohibited. channel. For example, third
party channels cannot be part
of the same bouquet. No
such restriction on
broadcaster under Copyright
Act. 5. Second proviso to 3(3) - Directly regulates the pricing
MRP of pay channel in of a TV channel, thereby also
bouquet not to exceed regulating pricing of individual
INR 19/- programmes.
6. Third proviso to 3(3) - Directly regulates the pricing
Bouquet price shall not of a TV channel, thereby also
be less than 85% of the regulating pricing of individual
sum of a-la-carte prices programmes.
of individual channels in
the bouquet.
7. Fourth proviso to 3(3) - Under Rule 56 of the
MRP of all bouquets to Copyright Rules, 2013,
be uniform across broadcaster has the right to
distribution platforms. decide separate MRP for
different category of
audience.
8. Fifth proviso to 3(3) - Impinges upon broadcaster's
Bouquet of pay channels ability to package a TV
shall not have free-to-air channel. No such restriction
channels. on broadcaster under
9. Sixth proviso to 3(3) - Impinges upon broadcaster's
HD and SD variant of ability to package a TV
same channel cannot be channel. No such restriction
in same bouquet. on broadcaster under
10. 3(4) - Restriction on All these restrictions impinge
promotion of bouquets, broadcaster's ability to
restriction on time, commercially monetize his
restriction on frequency. content.
11. 4(2) - Distributor to offer Indirectly impinges upon the
all channels on a-la-carte broadcaster's right to offer his
basis. channels to the customers
only as a bouquet and not as
a-la-carte.”
20. Since the Regulation made under Section 36 of the said
Act is under challenge, it must first be stressed that a restrictive
meaning cannot be given to the words “regulation” or “regulate”,
as otherwise the very object of the Act would be stultified. In
Deepak Theater v. State of Punjab, 1992 Supp (1) SCC 684,
a case which related to the Punjab Cinemas (Regulation) Act,
1952 and Rules, this Court referred to the power of licensing
and regulation under the said Act as follows:
“5. Witnessing a motion picture has become an
amusement to every person; a reliever to the weary
and fatigued; a reveller to the pleasure seeker; an
imparter of education and enlightenment enlivening
to news and current events; disseminator of
scientific knowledge; perpetuator of cultural and
spiritual heritage, to the teeming illiterate majority of
population. Thus, cinemas have become tools to
promote welfare of the people to secure and protect
as effectively as it may a social order as per
directives of the State policy enjoined under Article
38 of the Constitution. Mass media, through motion
picture has thus become the vehicle of coverage to
disseminate cultural heritage, knowledge, etc. The
passage of time made manifest this growing
imperative and the consequential need to provide
easy access to all sections of the society to seek
admission into theatre as per his paying capacity.
Though the right to fix rates of admission is a
business incident, the appellant having created an
interest in the general public therein, it has become
necessary for the State to step in and regulate the
activity of fixation of maximum rates of admission to
different classes, as a welfare weal. Thereby
fixation of rates of admission became a legitimate
ancillary or incidental power in furtherance of the
regulation under the Act. Access to and admission
into theatre is a facility and concomitant right to a
cinegoing public. Classification of seats and fixation
of rates of admission according to paying capacity
of a cinegoer is also an integral power of regulation.
Power to fix rates of admission includes power to
amend and revise the rates from time to time. The
statute vests that power in the licensing authority
subject to control by the State Government. The
fixation of the rates of admission has thus become
an integral and essential part of the power and
regulation of exhibition of cinematograph.”
21. In BSNL v. TRAI, (2014) 3 SCC 222, this Court held:
“80. After the Amendment of 2000, TRAI can either
suo motu or on a request from the licensor make
recommendations on the subjects enumerated in
Sections 11(1)(a)(i) to (viii). Under Section 11(1)(b),
TRAI is required to perform nine functions
enumerated in sub-clauses (i) to (ix) thereof. In
these clauses, different terms like “ensure”, “fix”,
“regulate” and “lay down” have been used. The use
of the term “ensure” implies that TRAI can issue
directions on the particular subject. For effective
discharge of functions under various clauses of
Section 11(1)(b), TRAI can frame appropriate
regulations. The term “regulate” contained in sub-
clause (iv) shows that for facilitating arrangement
amongst service providers for sharing their revenue
derived from providing telecommunication services,
TRAI can either issue directions or make
regulations.
83. In K. Ramanathan v. State of T.N. [K.
Ramanathan v. State of T.N., (1985) 2 SCC 116 :
1985 SCC (Cri) 162] , this Court interpreted the
word “regulation” appearing in Section 3(2)(d) of the
Essential Commodities Act, 1955 and observed:
(SCC pp. 130-31, paras 18-20)
“18. The word ‘regulation’ cannot have any rigid or inflexible meaning as to exclude ‘prohibition’. The word ‘regulate’ is difficult to define as having any precise meaning. It is a word of broad import, having a broad meaning, and is very comprehensive in scope. There is a diversity of opinion as to its meaning and its application to a particular state of facts, some courts giving to the term a somewhat restricted, and others giving to it a liberal, construction. The different shades of meaning are brought out in Corpus Juris Secundum, Vol. 76 at p. 611:
‘“Regulate” is variously defined as
meaning to adjust; to adjust, order, or
govern by rule, method, or established
mode; to adjust or control by rule,
method, or established mode, or
governing principles or laws; to govern;
to govern by rule; to govern by, or
subject to, certain rules or restrictions; to
govern or direct according to rule; to
control, govern, or direct by rule or
regulations.
“Regulate” is also defined as meaning to
direct; to direct by rule or restriction; to
direct or manage according to certain
standards, laws, or rules; to rule; to
conduct; to fix or establish; to restrain; to
restrict.’
(See also Webster's Third New International Dictionary, Vol. 2, p. 1913 and Shorter Oxford Dictionary, Vol. 2, 3rd Edn., p. 1784.)
19. It has often been said that the power to regulate does not necessarily include the power to prohibit, and ordinarily the word
‘regulate’ is not synonymous with the word ‘prohibit’. This is true in a general sense and in the sense that mere regulation is not the same as absolute prohibition. At the same time, the power to regulate carries with it full power over the thing subject to regulation and in absence of restrictive words, the power must be regarded as plenary over the entire subject. It implies the power to rule, direct and control, and involves the adoption of a rule or guiding principle to be followed, or the making of a rule with respect to the subject to be regulated. The power to regulate implies the power to check and may imply the power to prohibit under certain circumstances, as where the best or only efficacious regulation consists of suppression. It would therefore appear that the word ‘regulation’ cannot have any inflexible meaning as to exclude ‘prohibition’. It has different shades of meaning and must take its colour from the context in which it is used having regard to the purpose and object of the legislation, and the Court must necessarily keep in view the mischief which the legislature seeks to remedy.
20. The question essentially is one of degree and it is impossible to fix any definite point at which ‘regulation’ ends and ‘prohibition’ begins. We may illustrate how different minds have differently reacted as to the meaning of the word ‘regulate’ depending on the context in which it is used and the purpose and object of the legislation. In Slattery v. Naylor [(1888) LR 13 AC 446 (PC)] the question arose before the Judicial Committee of the Privy Council whether a bye-law by reason of its prohibiting internment altogether in a particular cemetery,
was ultra vires because the Municipal Council
had only power of regulating internments
whereas the bye-law totally prohibited them in
the cemetery in question, and it was said by
Lord Hobhouse, delivering the judgment of the
Privy Council: (AC p. 447)
‘A rule or bye-law cannot be held as
ultra vires merely because it prohibits
where empowered to regulate, as
regulation often involved prohibition.’”
87. Reference in this connection can also be made to the judgment in U.P. Coop. Cane Unions Federations v. West U.P. Sugar Mills Assn. [(2004) 5 SCC 430] In that case, the Court interpreted the word “regulation” appearing in the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 and observed: (SCC pp. 454-55, para 20)
“20. … ‘Regulate’ means to control or to
adjust by rule or to subject to governing
principles. It is a word of broad impact having
wide meaning comprehending all facets not
only specifically enumerated in the Act, but
also embraces within its fold the powers
incidental to the regulation envisaged in good
faith and its meaning has to be ascertained in
the context in which it has been used and the
purpose of the statute.”
88. It is thus evident that the term “regulate” is elastic enough to include the power to issue directions or to make regulations and the mere fact that the expression “as may be provided in the regulations” appearing in clauses (vii) and (viii) of Section 11(1)(b) has not been used in other clauses of that sub-section does not mean that the
regulations cannot be framed under Section 36(1) on the subjects specified in sub-clauses (i) to (vi) of Section 11(1)(b). In fact, by framing regulations under Section 36, TRAI can facilitate the exercise of functions under various clauses of Section 11(1)(b) including sub-clauses (i) to (vi).
89. We may now advert to Section 36. Under subsection (1) thereof TRAI can make regulations to carry out the purposes of the TRAI Act specified in various provisions of the TRAI Act including Sections 11, 12 and 13. The exercise of power under Section 36(1) is hedged with the condition that the regulations must be consistent with the TRAI Act and the rules made thereunder. There is no other restriction on the power of TRAI to make regulations. In terms of Section 37, the regulations are required to be laid before Parliament which can either approve, modify or annul the same. Section 36(2), which begins with the words “without prejudice to the generality of the power under subsection (1)” specifies various topics on which regulations can be made by TRAI. Three of these topics relate to meetings of TRAI, the procedure to be followed at such meetings, the transaction of business at the meetings and the register to be maintained by TRAI. The remaining two topics specified in clauses (e) and (f) of Section 36(2) are directly referable to Sections 11(1)(b)(viii) and 11(1)(c). These are substantive functions of TRAI. However, there is nothing in the language of Section 36(2) from which it can be inferred that the provisions contained therein control the exercise of power by TRAI under Section 36(1) or that Section 36(2) restricts the scope of Section 36(1).”
22. However, learned counsel for the appellants relied upon
Cellular Operators Assn. of India v. TRAI, (2016) 7 SCC 703
and, in particular, paragraph 41 thereof, which reads as follows:
“41. We find that the impugned Regulation is not
referable to Sections 11(1)(b)(i) and (v) of the Act
inasmuch as it has not been made to ensure
compliance with the terms and conditions of the
licence nor has it been made to lay down any
standard of quality of service that needs
compliance. This being the case, the impugned
Regulation is dehors Section 11 but cannot be said
to be inconsistent with Section 11 of the Act. This
Court has categorically held in BSNL [BSNL
v. Telecom Regulatory Authority of India, (2014) 3
SCC 222] judgment that the power under Section
36 is not trammelled by Section 11. This being so,
the impugned Regulation cannot be said to be
inconsistent with Section 11 of the Act. However,
what has also to be seen is whether the said
Regulation carries out the purpose of the Act which,
as has been pointed out hereinabove, under the
amended Preamble to the Act, is to protect the
interests of service providers as well as consumers
of the telecom sector so as to promote and ensure
orderly growth of the telecom sector. Under Section
36, not only does the Authority have to make
regulations consistent with the Act and the Rules
made thereunder, but it also has to carry out the
purposes of the Act, as can be discerned from the
Preamble to the Act. If, far from carrying out the
purposes of the Act, a regulation is made contrary
to such purposes, such regulation cannot be said to
be consistent with the Act, for it must be consistent
with both the letter of the Act and the purposes for
which the Act has been enacted. In attempting to
protect the interest of the consumer of the telecom
sector at the cost of the interest of a service
provider who complies with the leeway of an
average of 2% of call drops per month given to it by
another Regulation, framed under Section
11(1)(b)(v), the balance that is sought to be
achieved by the Act for the orderly growth of the
telecom sector has been violated. Therefore, we
hold that the impugned Regulation does not carry
out the purpose of the Act and must be held to be
ultra vires the Act on this score.”
23. What is important to note from this judgment is that the
balance that was sought to be maintained between protecting
the interest of service providers and consumers was destroyed
by the impugned regulations. What is important from our point
of view, however, is that under Section 36 of the TRAI Act, the
Authority is empowered to carry out the purposes of the said
Act as can be discerned from the Preamble to the Act. What is
clear from the amended Preamble to the Act is that the
interests of service providers and consumers are of paramount
importance, both of which have a role to play when regulations
are framed under Section 36.
24. Learned counsel for the appellants also relied upon
Petroleum and Natural Gas Regulatory Board v.
Indraprastha Gas Ltd. (supra.). In this case, the Petroleum
and Natural Gas Regulatory Board Act, 2006 was the subject
matter of discussion by this Court. This Court, after construing
the Act, held that where there is a cassus omissis, such lacuna
cannot be filled up by the judicial interpretative process. Thus,
entities which are neither “common carriers” nor “contract
carriers” within the tariff regulating powers of the Board under
the Act were not held amenable to regulation. Further, the
reach of the Act, as is clear from a reading of Sections 20 to 22
would make it clear that transportation tariffs for common
carriers and contract carriers alone could be regulated by the
Board. This would naturally not include a regulation which will
pertain to network tariff for city or local gas distribution network
as such a network is neither a common carrier nor a contract
carrier covered by the Act. Further, the laying down of the
compression charge for CNG gas would also, therefore, be
wholly outside the reach of the said Act. This judgment again
has no application to the facts of the present case, given the
fact that the Preamble read with Section 11(2) makes it clear
that the Regulation and Tariff Order made thereunder would
both be within the reach of TRAI under the TRAI Act.
25. At this stage, it is also important to set out some of the
provisions of the Indian Telegraph Act, 1885. This Act was
amended in 2004 to include Section 3(1AA). The relevant
sections of this Act are set out hereinbelow:
“3.(1AA) “telegraph” means any appliance,
instrument, material or apparatus used or capable
of use for transmission or reception of signs,
signals, writing, images, and sounds or intelligence
of any nature by wire, visual or other electro
magnetic emissions, Radio waves or Hertzian
waves, galvanic, electric or magnetic means;
Explanation.- “Radio waves” or “Hertzian waves”
means electro magnetic waves of frequencies lower
than 3,000 giga-cycles per second propagated in
space without artificial guide.
4. Exclusive privilege in respect of telegraphs,
and power to grant licences.— (1) Within India,
the Central Government shall have the exclusive
privilege of establishing, maintaining and working
telegraphs:
Provided that the Central Government may grant a
license, on such conditions and in consideration of such payments as it thinks fit, to any person to establish, maintain, or work a telegraph within any part of India:
Provided further that the Central Government may, by rules made under this Act and published in the Official Gazette, permit, subject to such restrictions and conditions as it thinks fit, the establishment, maintenance and working—
(a) of wireless telegraphs on ships within
Indian territorial waters and on aircrafts within
or above India, or Indian territorial waters, and
(b) of telegraphs other than wireless
telegraphs within any part of India.
Explanation.— The payments made for the grant of a licence under this sub-section shall include such sum attributable to the Universal Service Obligation as may be determined by the Central Government after considering the recommendation made in this behalf by the Telecom Regulatory Authority of India established under sub-section (1) of Section 3 of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997).
(2) The Central Government may, by notification in the Official Gazette, delegate to the telegraph authority all or any of its powers under the first proviso to sub-section (1).
The exercise by the telegraph authority of any power so delegated shall be subject to such restrictions and conditions as the Central Government may, by the notification, think fit to impose.”
26. Sections 2(2) and 5 of the Indian Wireless Telegraphy
Act, 1933 are also set out hereinbelow:
“2(2) “wireless telegraphy apparatus” means any
apparatus, appliance, instrument or material used or
capable of use in wireless communication, and
includes any article determined by rule made under
Section 10 to be wireless telegraphy apparatus, but
does not include any such apparatus, appliance,
instrument or material commonly used for other
electrical purposes, unless it has been specially
designed or adapted for wireless communication or
forms part of some apparatus, appliance, instrument
or material specially so designed or adapted, nor
any article determined by rule made under Section
10 not to be wireless telegraphy apparatus;
5. Licenses.—The telegraph authority constituted
under the Indian Telegraph Act, 1885 (13 of 1885),
shall be the authority competent to issue licenses to
possess wireless telegraphy apparatus under this
Act, and may issue licenses in such manner, on
such conditions and subject to such payments as
may be prescribed.”
27. It is clear that only a person who is licensed under
Section 5 of the Indian Wireless Telegraphy Act can use a
teleport from India from which a TV channel is to be uplinked to
a satellite. Equally, to be uplinked to a satellite and thereafter
downlinked from such satellite to an MSO, permission would be
required from the Central Government. This would be clear
from a reading of the separate guidelines for uplinking and
downlinking channels issued by the Government of India.
28. So far as the uplinking guidelines are concerned, on
5.12.2011, the Ministry of Information and Broadcasting
(Broadcasting Wing) set out detailed conditions by which the
uplinking of TV channels may be made. Under Clause 5.9 of
the said guidelines, the Government of India shall have the right
to suspend the permission of a company for a specified period
in the public interest, or in the interest of national security, to
prevent misuse.
29. Similarly, insofar as the policy guidelines for downlinking
of TV channels is concerned, the Ministry has given detailed
guidelines of the same date, i.e., 5.12.2011. Among other
things, it is stated:-
“2.4. No News and Current Affairs channel shall be
permitted to be downlinked if it does not meet the
following additional conditions:
2.4.1. That it does not carry any advertisements
aimed at Indian viewers;
2.4.2. That it is not designed specifically for Indian
audiences;
2.4.3. That it is a standard international channel;
2.4.4. That it has been permitted to be telecast in the
country of its uplinking by the regulatory
authority of that country;
Provided that the Government may waive/modify the condition under clause 2.4.1 on a case-by-case basis.
5.1. The Company permitted to downlink registered channels shall comply with the Programme and Advertising Code prescribed under the Cable Television Networks (Regulation) Act, 1995.
5.2. The company shall ensure compliance of the provisions of Sports Broadcasting Signals (Mandatory sharing with Prasar Bharati) Act 11 of 2007 and the Rules, Guidelines, Notifications issued thereunder.
5.3. The applicant company shall adhere to any other Code/Standards guidelines/restrictions prescribed by Ministry of Information & Broadcasting, Government of India for regulation of content on TV channels from time to time.
5.4. The applicant company shall submit audited annual accounts of its commercial operations in India.
5.5. The applicant company shall obtain prior approval of the Ministry of Information and Broadcasting before undertaking any upgradation,
expansion or any other changes in the downlinking and distribution system/network configuration.
5.6. The applicant company shall provide Satellite TV Channel signal reception decoders only to MSO/Cable Operators registered under the Cable Television Networks (Regulation) Act 1995 or to a DTH operator registered under the DTH guidelines issued by Government of India or to an Internet Protocol Television (IPTV) Service Provider duly permitted under their existing Telecom License or authorized by Department of Telecommunications or to a HITS operator duly permitted under the policy guidelines for HITS operators issued by Ministry of Information and Broadcasting, Government of India to provide such service.
5.7. The applicant company shall ensure that any of its channels, which is unregistered or prohibited from being telecast or transmitted or re-transmitted in India, under the Cable Television Networks (Regulation) Act 1995 or the DTH guidelines or any other law for the time being in force, cannot be received in India through encryption or any other means.
5.8. The Union Government shall have the right to suspend the permission of the company/registration of the channel for a specified period in public interest or in the interest of National security to prevent the misuse of the channel. The company shall immediately comply with any direction issued in this regard.
5.9. The applicant company seeking permission to downlink a channel shall operationalise the channels within one year from the date of the permission being granted by the Ministry of Information and Broadcasting failing which the permission will liable to be withdrawn without any
notice in this regard. However, the company shall be afforded a reasonable opportunity of being heard before such a withdrawal.
5.10. The company/channel shall adhere to the norms, rules and regulations prescribed by any regulatory authority set up to regulate and monitor the Broadcast Services in the country,
5.11. The applicant company shall give intimation to Ministry of Information and Broadcasting regarding change in the directorship, key executives or foreign direct investment in the company, within 15 days of such a change taking place. It shall also obtain security clearance for such changes in its directors and key executives.
5.12. The applicant company shall keep a record of programmes downlinked for a period of 90 days and to produce the same before any agency of the Government as and when required.
5.13. The applicant company shall furnish such information as may be required by the Ministry of Information and Broadcasting from time to time.
5.14. The applicant company shall provide the necessary monitoring facility at its own cost for monitoring of programmes or content by the representative of the Ministry of Information and Broadcasting or any other Government agency as and when required.
5.15. The applicant company shall comply with the obligations and conditions prescribed in the downlinking guidelines issued by the Ministry of Information and Broadcasting, and the specific downlinking permission agreement and registration of each channel.
5.16. In the event of any war, calamity/national
security concerns, the Government shall have the
power to prohibit for a specified period the
downlinking/reception/transmission and re-
transmission of any or all channels. The Company
shall immediately comply with any such directions
issued in this regard.”
30. We are of the view that the provisions of the TRAI Act
have to be viewed in the light of protection of the interests of
both service providers and consumers. This being so, it is clear
that no constricted meaning can be given to the provisions of
this Act. It is important to remember that under Section
11(1)(a)(iv), one of the functions of the Authority, though
recommendatory, is to facilitate competition and promote
efficiency in the operation of telecommunication services (which
includes broadcasting services) so as to facilitate growth in
such services. What is also clear from Section 11(1)(b), is that
terms and conditions of interconnectivity between different
service providers have to be fixed, which necessarily includes
terms that relate not only to carriage simpliciter as submitted by
Dr. Singhvi, but to all terms and conditions of interconnectivity
between broadcaster, MSO, Cable TV operator and the
ultimate consumer, so as to ensure that the object of the Act is
carried out, namely, that both broadcasters and consumers get
a fair deal. Towards this end, Section 11(2) makes it clear that
the Authority may, from time to time, notify the rates at which
telecommunication services, including broadcasting services,
within India and outside India, shall be provided under this Act.
Dr. Singhvi argued that the literal language of this sub-section,
which would undoubtedly bring in rates laid down in the Tariff
Order, would have to be constricted by the language of the last
part of the provision, viz., “including the rates at which
messages shall be transmitted to any country outside India”.
We are afraid that this is against basic canons of construction,
as the expression “including” would only refer to a part of what
precedes the expression and cannot therefore constrict the part
that has gone before. The plain literal language of Section
11(2) makes it clear that rates at which broadcasting services
are offered within and outside India can be fixed by TRAI. It is
clear therefore that when rates are fixed after several rounds of
consultations between various service providers and
consumers, looking to the interest of each, it is impossible to
say that any broadcaster’s rights have been impinged upon.
Shri Dwivedi is absolutely right in saying that at no stage is
content of a TV channel sought to be regulated, and that pricing
relating to TV channels laid down in the Regulation and Tariff
Order is a balancing act between the rights of broadcasters and
the interests of consumers, which we may hasten to add has
not been impugned on the ground that any right or fundamental
right is violated, but only on the ground that the Regulation as
well as the Tariff Order are outside the “jurisdiction” of TRAI.
Dr. Singhvi’s argument on this score must therefore fail.
31. In fact, in Avishek Goenka v. Union of India, (2012) 5
SCC 275, this Court has already held:
“18. If one examines the powers and functions of
TRAI, as postulated under Section 11 of the Act, it
is clear that TRAI would not only recommend, to
DoT, the terms and conditions upon which a licence
is granted to a service provider but has to also
ensure compliance with the same and may
recommend revocation of licence in the event of
non-compliance with the regulations. It has to
perform very objectively one of its main functions
i.e. to facilitate competition and promote efficiency
in the operation of the telecommunication services,
so as to facilitate growth in such services. It is
expected of this regulatory authority to monitor the
quality of service and even conduct periodical
survey to ensure proper implementation.”
32. We must also hasten to add that the power under Section
36(1) of the Act is very wide and not constricted by the
provisions of Section 11, as was held in BSNL v. TRAI (supra.).
33. Equally, in Hotel & Restaurant Assn. v. Star India (P)
Ltd., (2006) 13 SCC 753, this Court has held:-
“24. Section 11 of the TRAI Act provides for the
functions of TRAI. Clause (a) of sub-section (1) of
Section 11 of the TRAI Act empowers TRAI to make
recommendations either suo motu or on the request
from the licensor, on the matters enumerated
therein. Clause (b) thereof empowers it inter alia to
fix the terms and conditions of interconnectivity
between the service providers.
25. Sub-section (2) of Section 11 of the TRAI Act
contains a non obstante clause providing
that TRAI may frame from time to time by order(s)
notified in the Official Gazette the rates at which the
telecommunication services within India and outside
India shall be provided under the said Act including
the rates at which messages shall be transmitted to
any country outside India. Proviso appended to sub-
section (2) thereof empowers TRAI to notify different
rates for different persons or class of persons for
similar telecommunication services and where
different rates are fixed as aforesaid TRAI shall
record the reasons therefor.
55. TRAI exercises a broad jurisdiction. Its
jurisdiction is not only to fix tariff but also laying
down terms and conditions for providing services.
Prima facie, it can fix norms and the mode and
manner in which a consumer would get the
services.
56. The role of a regulator may be varied. A
regulation may provide for cost, supply of service on
non-discriminatory basis, the mode and manner of
supply making provisions for fair competition
providing for a level playing field, protection of
consumers' interest, prevention of monopoly. The
services to be provided for through the cable
operators are also recognised. While making the
regulations, several factors are, thus required to be
taken into account. The interest of one of the
players in the field would not be taken into
consideration throwing the interest of others to the
wind.”
34. It is interesting to note, as has been stated by Shri
Dwivedi, that in Star India’s response to the consultative paper
of 29.1.2016, Star India itself has requested that the Regulation
and Tariff Order be fixed on the basis of the principles that are
now contained therein. For example, Star India’s response to
whether a reasonable wholesale price cap can be ensured for
mass genres, was as follows:-
“Reasonable wholesale price cap to be ensured for the mass genres
• Channels need to be incentivized for creating
diverse and innovative content
• Incumbent flagship channels have been
suffering from legacy price and bouquet
freeze.
• All channels should earn fair share of
consumers’ ARPU.
• Our research findings reveal that basis current
ARPUs, share of viewership of flagship
channels, and existing revenue share of the
broadcasters in the addressable market, the
value attributed by the market to the flagship
channels is significantly more than the existing
wholesale list prices of these channels.
• Accordingly, the retail value ascribed to
flagship entertainment channels by
consumers, translate into a wholesale price of
Rs.11/- to Rs.28/-. For details refer to
Annexure A.
• Therefore, the wholesale cap should be
Rs.28/- to allow for optimum monetization of
the flagship channels. If the channel values
are allowed to be corrected basis consumer
demand the share of the channel in the
ARPUs shall be realigned to reflect their true
value proposition without leading to any
arbitrary or perverse price hikes. Further the
proposed discount cap will effectively
eliminate pricing distortions.
• However, in the interest of enabling a smooth
and seamless transition to full addressability
without creating any unnecessary chaos we
are proposing the following caps, in the
transition phase. Any lower cap will not only
stifle investments in innovative content but
also continue to restrict incumbent channels
whose rates were frozen in 2003-2004 from
realizing their real value.
Mass Genre Proposed
Price
Cap (Rs.)
General 12.00
Entertainment
(Hindi & Regional)
10.00 Movies (Hindi &
Regional)
Sports 18.00
• These caps should be subject to automatic
annual revision, basis inflation.”
While answering whether broadcasters should offer wholesale
discounts to distribution platform operators (hereinafter referred
to as a “DPO”) which should be transparently available as part
of the reference interconnect offer (hereinafter referred to as
“RIO”), Star India has stated:
“Wholesale discounts to be subject to a
maximum overall cap of 33%
• As explained above, there are wide variety of
parameters that a single broadcaster may
want to drive basis various business
requirements
• 33% discount will be sufficient to effectively
drive only a few business requirements
• Any discounting cap lower than 33% will
render the discounting structure
ineffective/unworkable.”
Similarly, so far as high definition channels are concerned, Star
India had this to say:
“1. HD channels offer a viewer experience that is
distinctly different from SD channels
- The production, transmission and re-
transmission of HD channels entail substantial
investments.
- HD channels offer distinctly superior audio and
video quality to the viewers through cutting
edge technology used right from shooting of
content, production, post-production,
transmission & re-transmission. For detailed
explanation refer to Annexure B.
- The consumption of HD channel requires
significant investment by the consumer in an
HD TV and HD set-top box. As such, these
channels are aspirational and for affluent
audiences who demand better content &
quality offering and have the capacity to pay
for it.
2. Price forbearance for HD channels should continue
- HD channel can be subscribed by only those
subscribers who can afford specialized HD
set-top box as well as HD TV, which comes at
a premium.
- The HD channel market has witnessed a
robust growth and has allowed broadcasters to
invest in quality and innovative content. Over
the last four years market forces have enabled
the channels to discover their real prices and
desired penetration.
- This has been possible because of the
laudable decision of the Authority to keep HD
channels outside the regulatory purview. With
upcoming 3D, 4D and virtual reality it would
indeed be a regressive step if the Authority
were to now regulate HD channels thereby
sending out a negative signal to potential
investments in these technologies.
- Hence we recommend that the Authority
should continue to keep HD channels outside
the regulatory ambit.
- In order to protect the interest of subscribers
and to foster further growth in this segment,
we recommend that HD channels should
adhere to twin conditions and discounting caps
at the wholesale and retail.
- Discount on wholesale prices should be
capped at 33% to ensure a viable a-la-carte
fallback option for DPOs.
- Retail a-la-carte prices should be linked to
wholesale prices (same linkage multiplier as
used for SD channels).
- Discount at retail level also to be limited to
33% to ensure a viable a-la-carte fallback
option for consumer.
3. Bundling of HD and SD channels should not
be allowed, both at wholesale and retail levels.
4. Charging of access fee for HD channels
should not be allowed at retail level.
5. DPOs free to sell HD channels as a-la-carte as
well as bouquet(s) of HD channels.
6. Consumers and DPOs should have a choice
to subscribe to only HD channels or only SD
channels or both combined but purchased
separately.”
Equally, insofar as whether free to air and pay channel
bouquets are concerned, Star India itself stated that they
should not be bundled together thus:-
“FTA and Pay channels should not be bundled
together
- As has been highlighted in the Preamble, we
believe that FTA channels should be free to
consumer.
- Pay and FTA channels should not be bundled
in the same bouquet.
- The declaration of a-la-carte rate is only with
regard to pay channels, as per existing
regulations. Allowing a-la-carte pricing of FTA
channels is thus not in accordance with the
extent regulatory constructs.
- Pricing FTA channels at retail level and
bundling them with Pay channels leads to
price distortions by bloating the bouquet size
and price, which is not in consumer interest.
▪ Creating separate pay bouquets will ensure
consumers are provided true visibility of
pay channel pricing.”
35. It is only when TRAI issued a second consultation paper
dated 4.5.2016 that Star India submitted its response in June,
2016 where it raised for the first time the issue relating to the
Copyright Act as an afterthought. What is important to notice is
that even in this response, Star India reiterated that discount
caps should be provided for as this checks discriminatory
behavior during negotiation and will facilitate designing of
discount criteria based on intelligible differentia which will help
serve the diverse needs of consumers. In a third response to
the draft regulations and tariff order, Star India raised
jurisdictional issues of TRAI.
36. Pursuant to these and other inputs, TRAI has in its
explanatory memorandum given reasons for the Tariff Order as
“64. The Authority has noted that at present the
uptake of channels on a-la-carte basis is negligible
as compared to the bouquet subscriptions. Analysis
yields that the prime reason for such poor uptake of
a-la-carte channels is that the a-la-carte rates of channels are disproportionately high as compared to the bouquet rates and further, there is no well defined relationship between these two rates. As per data available with TRAI, some bouquets are being offered by the distributors of television channels at a discount of upto 80%-90% of the sum of a-la-carte rates of pay channels constituting those bouquets. These discounts are based on certain eligibility criteria/conditions to be fulfilled by the distributor of television channels in order to avails those discounts from broadcasters. Such high discounts force the subscribers to take bouquets only and thus reduce subscriber choice. As a result, while technically, a-la-carte rates of channels are declared, these are illusive and subscribers are left with no choice but to opt for bouquets. Bouquets formed by the broadcasters contain only few popular channels. The distributors of television channels are often asked to take the entire bouquet as otherwise they are denied the popular channels altogether or given such popular channels at RIO rates. To make the matters worse, the distributors of television channels have to pay as if all the channels in the bouquet are being watched by the entire subscriber base, when in fact only the popular channels will have high viewership. In such a scenario, at the retail end, the distributors of television channels somehow push these channels to maximum number of subscribers so as to recover costs. This marketing strategy based on bouquets essentially results in ‘perverse pricing’ of bouquets vis-à-vis the individual channels. As a result, the customers are forced to subscribe to bouquets rather than subscribing to a-la-carte channels of their choice. Thus, in the process, the public, in general, end up paying for “unwanted” channels and this, in effect, restricts subscriber choice. Bundling
of large number of unwanted channels in bouquets also result in artificial occupation of distributors' network capacity. This acts as an entry barrier for newer TV channels.
65. In order to facilitate subscribers to exercise their options in line with intention of lawmakers to choose individual channels, in the new framework the broadcasters will declare to customers/subscribers the MRP of their a-la-carte channels and bouquets of pay channels. In order to ensure that prices of the a-la-carte channels are kept reasonable, the maximum discount permissible in formation of a bouquet has been linked with the sum of the a-lacarte prices of the of pay channels forming that bouquet. A broadcaster can offer a maximum discount of 15% while offering its bouquet of channels over the sum of MRP of all the pay channels in that bouquet so as to enable customer choice through a-la-carte offering and also prevent skewed a-la-carte and bouquet pricing (refer example 1). The bouquet(s) offered by the broadcasters to subscribers shall be provided by the distributors of television channels to the subscribers without any alteration in composition of the bouquet(s). In case a broadcaster feels that more discount can be provided in formation of the bouquet, it indirectly means that a-la-carte prices at the first stage has been kept high and there is a need to revise such a-la-carte prices downwardly. Full flexibility has been given to broadcasters to declare price of their pay channels on a-la-carte basis to correct such situations, if it may come.
66. Some stakeholders are of the opinion that limiting the discount to subscribers while forming bouquets is anti subscriber. In this regard, while the Authority wants to facilitate the availability of a-lacarte choice to customers/subscribers, it does not
intend to encroach upon the freedom of broadcasters and distributors to do business. During the discussions in the Parliament on the motion for consideration of the Cable Television Networks (Regulation) Amendment Bill, 2011, the then Minister of Information and Broadcasting emphasised the need to establish a system for subscribers to choose a-la-carte channels of choice. The Authority has also made several attempts in this regard, but for one or the other reason could not succeed. Here it is important to understand that the Authority has not been able to do pricing of channels in the absence of pricing of content. Present trends indicate that majority of channels are priced much below the prevailing ceiling, but higher ceilings were prescribed to give flexibility to broadcasters to monetise their channels and freedom to do business. Further, different channels even in the same genre may have varying cost of production and potential to monetise, but within the framework. A broadcaster may price even nondriver channels at a much higher value that they can command. Non-discovery of reasonable price of a channel in a market is one of the constraints that can be manipulated and misused to price a channel in a-la-carte from which is illusionary. Such high ala-carte prices permits broadcasters/distributors to provide high discounts to push non-drivers channels in form of bouquets to the subscribers while reducing the probability of choosing the a-la-carte channels of choice as required by the lawmakers in the Parliament. The possibility to forcing bouquets over a-la-carte choice by using higher discounts can be further understood by following example, where a broadcaster has a total of 35 pay channels out of which only 5 are driver channels:
Channel Discount Discount Discount Discount Discount
75% 60% 45% 30% 15%
Sum of a-la-carte prices of 5 50 50 50 50 50 driver pay channels
Sum of a-la-carte prices of 30 30 30 30 30 30 non-driver pay channels (@ Re 1)
Total price of 35 a-la-carte 80 80 80 80 80 pay channels
Price of bouquet of 35 pay 20 32 44 56 68 channels (with discount on sum of a-la-carte prices)
The above table clearly indicates that in case the amount of discount offered by the broadcaster, over the sum of a-la-carte prices of pay channels, while forming the bouquet of those pay channels is very high (75%), the price of bouquet becomes much lower than the sum of a-la-carte prices to the extent that it is almost equal to a-la-carte price of one driver channel. Such amount of discount is anti customer/subscriber as it discourages a-la-carte selection of channels. As the amount of discount on formation of bouquet decreases, the difference between the prices of bouquet and the sum of a-lacarte prices also decreases. In case the amount of discount is fixed at 15%, the price of bouquet becomes higher than the sum of a-la-carte prices of driver channels; thereby encouraging a subscriber to choose a-la-carte channels of his choice.
67. In the present regulatory framework incidences have come to the knowledge where discount upto 90% on the declared RIO prices has been given by broadcasters. Obviously such efforts kill competition and reduce a-la-carte choice which is antisubscriber. Accordingly, the Authority has prescribed a discount of 15% to be provided by broadcasters at wholesale level and further 15% to be provided by distributors at retail level. The net effect to subscribers at retail level will be a discount of approximately 30% on the bouquets of channels. Therefore flexibility of formation of bouquet has been given to broadcasters and MSOs both to such an extent that total permissible discount does not kill the a-la-carte choice. The Authority has been careful in prescribing a framework which does not encourage non-driver channel to be pushed to subscribers against their choice. Non-driver channels which are provided as part of bouquets not only kill choice of the ala-carte channels but also eat away the channel carrying capacity available with distributors which may result in artificial capacity constraints at distribution platforms for launch of new/competitive channels. Such restrictions are anti-subscriber and have to be carefully handled. Accordingly, the Authority has consciously decided the present framework of prescribing relationship between a-la-carte and bouquet prices to protect interest of customers/viewers and as well as those of service providers. However, the Authority will keep a watch on the developments in the market and may review the maximum permissible discount while offering a bouquet, in a time period of about two years.
68. A broadcaster is free to offer its pay channels in the form of bouquet(s) to customers. While subscribing to bouquet, a customer may not be aware of the price of each channel forming the
bouquet. Abnormal high price of a pay channel may
result in higher price of a bouquet leading to
adverse impact on subscribers' interests. It is an
established fact that bundling of channels
complicates and obscures their pricing. Prices are
obscured because subscribers do not always
understand the relationship between the bundle
price and a price for each component. However, the
bundling of channels offers convenience to the
subscribers as well as services providers in
subscription management. Keeping in view these
realties and to protect the interests of subscribers,
the Authority has prescribed a ceiling of Rs. 19/- on
the MRP of pay channels which can be provided as
part of a bouquet. Therefore, any pay channel
having MRP of more than Rs. 19/- cannot become
part of any bouquet. The amount of Rs. 19/- has
been prescribed keeping in view the prevailing
highest genre wise ceilings of Rs. 15.12 for all
addressable systems between broadcaster & DPOs
at wholesale level and further enhancing it 1.25
times to account for DPOs distribution fee.
Broadcasters also have complete freedom to price
their pay channels which do not form part of any
bouquet and offered only on a-la-carte basis.
Similar conditions will also be applicable to DPOs
for formation of the bouquets. However, the
Authority will keep a watch on the developments in
the market and may review the manner in which a
channel can be provided as part of a bouquet, in a
time period of about two years.”
37. It can thus be seen that both the Regulation as well as the
Tariff Order have been the subject matter of extensive
discussions between TRAI, all stake holders and consumers,
pursuant to which most of the suggestions given by the
broadcasters themselves have been accepted and incorporated
into the Regulation and the Tariff Order. 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.
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. 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.
38. Since submissions have been made by Dr. Singhvi on the
reach of various other Acts, it is a little important to deal with
the same.
39. Dr. Singhvi relied heavily upon the Sports Act. The
Statement of Objects and Reasons of this Act makes it clear
that the distribution of broadcasting signals of sporting events of
public interest is not disseminated to persons who do not have
access to satellite and Cable TV, most of whom are in rural
areas. Since the downlinking and uplinking policy guidelines of
the Government have been challenged in courts as lacking
statutory sanction, it has become necessary that sporting
events of national importance reach the general public on a free
to air basis. It is for this reason that the definitions of
“broadcaster”, “broadcasting”, etc. refer to content. The
following are certain relevant terms as defined under the Sports
Act:
“2.(1)(a) “broadcaster” means any person who
provides a content broadcasting service and
includes a broadcasting network service provider
when he manages and operates his own television
or radio channel service;
(b) “broadcasting” means assembling and
programming any form of communication content,
like signs, signals, writing, pictures, images and
sounds, and either placing it in the electronic form
on electro-magnetic waves on specified frequencies
and transmitting it through space or cables to make
it continuously available on the carrier waves, or
continuously streaming it in digital data form on the
computer networks, so as to be accessible to single
or multiple users through receiving devices either
directly or indirectly; and all its grammatical
variations and cognate expressions;
(c) “broadcasting service” means assembling,
programming and placing communication content in
electronic form on the electro-magnetic waves on
specified frequencies and transmitting it
continuously through broadcasting network or
networks so as to enable all or any of the multiple
users to access it by connecting their receiver
devices to their respective broadcasting networks and includes the content broadcasting services and the broadcasting network services;
(d) “broadcasting networks service” means a service, which provides a network of infrastructure of cables or transmitting devices for carrying broadcasting content in electronic form on specified frequencies by means of guided or unguided electro-magnetic waves to multiple users, and includes the management and operation of any of the following:
(i) Teleport/Hub/Earth Station;
(ii) Direct-to-Home (DTH) Broadcasting
Network,
(iii) Multi-system Cable Television Network,
(iv) Local Cable Television Network,
(v) Satellite Radio Broadcasting Network,
(vi) any other network service as may be
prescribed by the Central Government;
(h) “content” means any sound, text, data, picture (still or moving), other audio-visual representation, signal or intelligence of any nature or any combination thereof which is capable of being created, processed, stored, retrieved or communicated electronically;
(i) “content broadcasting service” means the assembling, programming and placing content in electronic form and transmitting or retransmitting the same on electro-magnetic waves on specified frequencies, on a broadcasting network so as to make it available for access by multiple users by
connecting their receiving devices to the network,
and includes the management and operation of any
of the following:
(i) terrestrial television service,
(ii) terrestrial radio service,
(iii) satellite television service,
(iv) satellite radio service,
(v) cable television channel service,
(vi) community radio service,
(vii) any other content broadcasting services
as may be prescribed by the Central
Government.”
The heart of the Sports Act is contained in Sections 3 and 5
thereof, which state as follows:-
“3. Mandatory sharing of certain sports
broadcasting signals.—(1) No content rights
owner or holder and no television or radio
broadcasting service provider shall carry a live
television broadcast on any cable or Direct-to-Home
network or radio commentary broadcast in India of
sporting events of national importance, unless it
simultaneously shares the live broadcasting signal,
without its advertisements, with the Prasar Bharati
to enable them to re-transmit the same on its
terrestrial networks and Direct-to-Home networks in
such manner and on such terms and conditions as
may be specified.
(2) The terms and conditions under sub-section (1)
shall also provide that the advertisement revenue
sharing between the content rights owner or holder
and the Prasar Bharati shall be in the ratio of not
less than 75:25 in case of television coverage and
50:50 in case of radio coverage.
(3) The Central Government may specify a
percentage of the revenue received by the Prasar
Bharati under sub-section (2), which shall be utilised
by the Prasar Bharati for broadcasting other
sporting events.
5. Power of the Central Government to issue
Guidelines.—The Central Government shall take
all such measures, as it deems fit or expedient, by
way of issuing Guidelines for mandatory sharing of
broadcasting signals with Prasar Bharati relating to
sporting events of national importance:
Provided that the Guidelines issued before the
promulgation of the Sports Broadcasting Signals
(Mandatory Sharing with Prasar Bharati) Ordinance,
2007 (Ord. 4 of 2007) shall be deemed to have
been issued validly under the provision of this
section.”
40. Shri Dwivedi is therefore right that the object of the Sports
Act has nothing to do with the validity of the Regulation and
Tariff Order made by TRAI under the TRAI Act. Content is
referred to in the Sports Act only for the reason stated in the
Objects and Reasons. Secondly, as has correctly been argued
by Shri Dwivedi and as has been held by us above, the TRAI
Act, as well as the Regulation and Tariff Order, do not in any
manner affect the content of the TV channels that are
broadcast by the broadcasters in these cases.
41. Dr. Singhvi then relied upon the Cable TV Act as follows:
“2.(a-i) “Authority” means the Telecom Regulatory
Authority of India established under sub-section (1)
of Section 3 of the Telecom Regulatory Authority of
India Act, 1997 (24 of 1997);
(a-ii) “Broadcaster” means a person or a group of
persons, or body corporate, or any organisation or
body providing programming services and includes
his or its authorised distribution agencies;
(a-iii) “cable operator” means any person who
provides cable service through a cable television
network or otherwise controls or is responsible for
the management and operation of a cable television
network and fulfils the prescribed eligibility criteria
and conditions;
(b) “cable service” means the transmission by
cables of programmes including re-transmission by
cables of any broadcast television signals;
(c) “cable television network” means any system
consisting of a set of closed transmission paths and
associated signal generation, control and
distribution equipment, designed to provide cable
service for reception by multiple subscribers;
4-A. (3) If the Central Government is satisfied that it is necessary in the public interest so to do, and if not otherwise specified by the Authority, it may direct the Authority to specify, by notification in the Official Gazette, one or more free-to-air channels to be included in the package of channels forming basic service tier and any one or more such channels may be specified, in the notification, genre-wise for providing a programme mix of entertainment, information, education and such other programmes and fix the tariff for basic service tier which shall be offered by the cable operators to the consumers and the consumer shall have the option to subscribe to any such tier:
Provided that the cable operator shall also offer the channels in the basic service tier on a la carte basis to the subscriber at a tariff specified under this subsection.
(4) The Central Government or the Authority may specify in the notification referred to in sub-section (3), the number of free-to-air channels to be included in the package of channels forming basic service tier for the purposes of that sub-section and different numbers may be specified for different States, cities, towns or areas, as the case may be.
Explanation.—For the purposes of this section—
(a) “addressable system” means an electronic
device (which includes hardware and its
associated software) or more than one
electronic device put in an integrated system
through which signals of cable television
network can be sent in encrypted form, which
can be decoded by the device or devices,
having an activated Conditional Access
System at the premises of the subscriber within the limits of authorisation made, through the Conditional Access System and the subscriber management system, on the explicit choice and request of such subscriber, by the cable operator to the subscriber;
(b) “basic service tier” means a package of free-to-air channels to be offered by a cable operator to a subscriber with an option to subscribe, for a single price to subscribers of the area in which his cable television network is providing service;
(c) “encrypted”, in respect of a signal of cable television network, means the changing of such signal in a systematic way so that the signal would be unintelligible without use of an addressable system and the expression “unencrypted” shall be construed accordingly;
(d) “free-to-air channel”, in respect of a cable television network, means a channel for which no subscription fee is to be paid by the cable operator to the broadcaster for its retransmission on cable;
(e) “pay channel”, in respect of a cable television network, means a channel for which subscription fees is to be paid to the broadcaster by the cable operator and due authorisation needs to be taken from the broadcaster for its re-transmission on cable;
(f) “subscriber management system” means a system or device which stores the subscriber records and details with respect to name, address and other information regarding the hardware being utilised by the subscriber, channels or bouquets of channels subscribed
to by the subscriber, price of such channels or
bouquets of channels as defined in the
system, the activation or deactivation dates
and time for any channel or bouquets of
channels, a log of all actions performed on a
subscriber's record, invoices raised on each
subscriber and the amounts paid or discount
allowed to the subscriber for each billing
period.
5. Programme code.—No person shall transmit or
re-transmit through a cable service any programme
unless such programme is in conformity with the
prescribed programme code:
[***]”
42. He then referred to Rule 6 of the Cable Television
Networks Rules, 1994, as follows:-
“6. Programme Code. –
(1) No programme should be carried in the cable
service which:-
(a) Offends against good taste or decency:
(b) Contains criticism of friendly countries;
(c) Contains attack on religions or
communities or visuals or words
contemptuous of religious groups or which
promote communal attitudes;
(d) Contains anything obscene, defamatory, deliberate, false and suggestive innuendos and half truths;
(e) Is likely to encourage or incite violence or contains anything against maintenance of law and order or which promote-anti-national attitudes;
(f) Contains anything amounting to contempt of court;
(g) Contains aspersions against the integrity of the President and Judiciary;
(h) Contains anything affecting the integrity of the Nation;
(i) Criticises, maligns or slanders any individual in person or certain groups, segments of social, public and moral life of the country ;
(j) Encourages superstition or blind belief;
(k) Denigrates women through the depiction in any manner of the figure of a women, her form or body or any part thereof in such a way as to have the effect of being indecent, or derogatory to women, or is likely to deprave, corrupt or injure the public morality or morals;
(l) Denigrates children;
(m) Contains visuals or words which reflect a slandering, ironical and snobbish attitude in the portrayal of certain ethnic, linguistic and regional groups;
(n) Contravenes the provisions of the Cinematograph Act, 1952.
(o) is not suitable for unrestricted public
exhibition
Provided that no film or film song or film promo or film trailer or music video or music albums or their promos, whether produced in India or abroad, shall be carried through cable service unless it has been certified by the Central Board of Film Cetification (CBFC)) as suitable for unrestricted public exhibition in India.
Explanation – For the purpose of this clause, the expression “unrestricted public exhibition” shall have the same meaning as assigned to it in the Cinematograph Act, 1952 (37 of 1952);
(2) The cable operator should strive to carry programmes in his cable service which project women in a positive, leadership role of sobriety, moral and character building qualities.
(3) No cable operator shall carry or include in his cable service any programme in respect of which copyright subsists under the Copyright Act, 1972 (14 of 1972) unless he has been granted a licence by owners of copyright under the Act in respect of such programme.
(4) Care should be taken to ensure that programmes meant for children do not contain any bad language or explicit scenes of violence.
(5) Programmes unsuitable for children must not be carried in the cable service at times when the largest numbers of children are viewing.
(6) No cable operator shall carry or include in his cable service any television broadcast or channel, which has not been registered by the Central Government for being viewed within the territory of India
PROVIDED that a cable operator may continue to
carry or include in his cable service any Television
broadcast or channel, whose application for
registration to the Central Government was made
on or before 11th May, 2006 and is under
consideration, for a period upto 31st May, 2008 or
till such registration has been granted or refused,
whichever is earlier
PROVIDED further that channels uplinking from
India, in accordance permission for uplinking
granted before 2nd December, 2005, shall be
treated as registered television channels and can be
carried or included in the cable service.”
43. The argument of Dr. Singhvi is that since this Act
regulates content downstream from the Cable TV operator to
the consumer, its absence in the TRAI Act is eloquent
testimony to the fact that content cannot be the subject matter
of the TRAI Act. As has been held by us hereinabove, the
same answer must obtain, namely, that this Act is also
irrelevant in the present case as the TRAI Act does not, as has
been held by us above, regulate the content of the TV channels
that are broadcasted by the broadcaster.
44. The main thrust of the arguments of both Dr. Singhvi and
Mr. Chidambaram were also by copious reference to the
Copyright Act, 1957, which, according to them, showed that
once the Copyright Act steps in, TRAI must necessarily step
out. They referred to certain provisions of this Act stage-wise.
The Copyright Act, 1957 as originally enacted stated in its
Objects and Reasons that: “it is necessary to enact an
independent self-contained law on the subject of copyright in
the light of growing public consciousness of the rights and
obligations of authors and in the light of experience gained in
the working of the existing law during the last forty years. New
and advanced means of communications like broadcasting,
litho-photography, etc., also call for certain amendments in the
existing law”, as a result of which certain rights akin to copyright
are conferred on broadcasting authorities in respect of
programmes broadcast by them. In this Act, as originally
enacted, Section 2(v) defined “radio-diffusion” as follows:
“2(v). “radio-diffusion” includes communication to
the public by any means of wireless diffusions
whether in the form of sounds or visual images or
both.”
45. Section 37, as originally enacted, recognised a broadcast
reproduction right by radio-diffusion only by the Government or
any other Authority of Government as follows:
“37. Broadcast Reproduction Right
(1) Where any programme is broadcast by radio-
diffusion by the Government or any other
broadcasting authority, a special right to be known
as “broadcast reproduction right” shall subsist in
such programme.
(2) The Government or other broadcasting
authority, as the case may be, shall be the owner of
the broadcast reproduction right and such right shall
subsist until twenty-five years from the beginning of
the calendar year next following the year in which
the programme is first broadcast.
(3) During the continuance of a broadcast
reproduction right in relation to any programme, any
person, who,-
(a) without the licence of the owner of the
right-
(i) rebroadcasts the programme in
question or any substantial part thereof
or
(ii) causes the programme in question
or any substantial part thereof to be
heard in public; or
(b) without the licence of the owner of the
right to utilise the broadcast for the purpose of
making a record recording the programme in
question or any substantial part thereof,
makes any such record, shall be deemed to
infringe the broadcast reproduction right.”
46. Section 38, as originally enacted prescribed as under :
“38. Other provisions of this Act to apply to
broadcast reproduction rights.
(1) Sections 18, 19, 30, 53, 55, 58, 64, 65 and 66
shall, with any necessary adaptations and
modifications, apply in relation to the broadcast
reproduction right in any programme as they apply
in relation to the copyright in a work :
47. Sections 18 and 19 of the Copyright Act deal with
assignment of copyright and royalty or other consideration
payable to the owner for such assignment. Section 30 of the
Copyright Act refers to the right to licence any interest in
copyright by the author or his duly authorised agent.
48. By the 1983 amendment to the Copyright Act, Section
2(v) defining radio-diffusion was deleted and instead Section
2(dd) was inserted defining “broadcast” as follows:
“2(dd). “broadcast” means communication to the
public –
(i) By means of wireless diffusion, whether in
any one or more of the forms or signs, sounds
or visual images; or
(ii) By wire,
and includes re-broadcast.”
49. Section 2(ff) was also inserted, defining “communication
to the public” as follows:
“2(ff) “communication to the public” means
communication to the public in whatever manner,
including communication through satellite.”
50. Consequently, Section 37 was also amended so as to
replace the expression “radio-diffusion” with the expression
“broadcast”.
51. In 1994, consequent to treaty obligations imposed upon
India, broadcast reproduction rights were expanded to include
private broadcasting organisations. The Statement of Objects
and Reasons for the aforesaid amendment made it clear that:
“… The law relating to copyright and related rights
has been under comprehensive review of the
Government for some time, taking into account the
difficulties expressed by different groups of
copyright owners and others, the experience gained
from the administration of the existing law and the
situation created by various technological
developments that have taken place.
2. The Copyright Act, 1957 amended and
consolidated the law relating to copyright in India. It
was further amended by the Copyright
(Amendment) Acts of 1983 and 1984 and certain
improvements were effected. By the Copyright
(Amendment) Act, 1992 the term of copyright was
further extended by a period of ten years. Now, it is
considered appropriate to further amend the
provisions of the Copyright Act, 1957-
to further clarify the law in respect of cable,
satellite and other means of simultaneous
communication of works to more than one
household or private place of residence,
including the residential rooms of a hotel or
hostel.
to further improve the functioning of the
Copyright Board;
to simplify and improve the law relating to
copyright and related rights, in the interests of
the general public, and in particular of the
users as well as the owners of such rights.”
52. Section 2(ff) defining “communication to the public” was
substituted with a more comprehensive definition as follows:
“2(ff) “communication to the public” means making
any work available for being seen or heard or
otherwise enjoyed by the public directly or by any
means of display or diffusion other than by issuing
copies of such work regardless of whether any
member of the public actually sees, hears or
otherwise enjoys the work so made available.
Explanation: For the purpose of this clause,
communication through satellite or cable or any
other means of simultaneous communication to
more than one household or place of residence
including residential rooms or any hotel or hostel
shall be deemed to be communication to the public.”
53. Section 37 was entirely recast as follows :
“37. Broadcast reproduction right. - (1) Every
broadcasting organisation shall have a special right
to be known as ‘‘broadcast reproduction right’’ in
respect of its broadcasts.
(2) The broadcast reproduction right shall subsist
until twenty-five years from the beginning of the
calendar year next following the year in which the
broadcast is made.
(3) During the continuance of a broadcast
reproduction right in relation to any broadcast, any
person who without the licence of the owner of the
right does any of the following acts of the broadcast
or any substantial part thereof, -
(a) re-broadcasts the broadcast; or
(b) causes the broadcast to be heard or seen
by the public on payment of any charges; or
(c) makes any sound recording or visual
recording of the broadcast; or
(d) makes any reproduction of such sound
recording or visual recording where such initial
recording was done without licence or, where
it was licensed, for any purpose not envisaged
by such licence; or
(e) sells or hires to the public, or offers for
such sale or hire, any such sound recording or
visual recording referred to in clause (c) or
clause (d),
shall, subject to the provisions of section 39, be
deemed to have infringed the broadcast
reproduction right.”
54. Section 38 was substituted with a new Section 39A as
follows:
“39A. Other provisions applying to broadcast
reproduction right and performer’s right.
(1) Sections 18, 19, 30, 53, 55, 58, 64, 65 and 66
shall, with any necessary adaptations and
modifications, apply in relation to the broadcast
reproduction right in any broadcast and the
performers’ right in any performance as they apply
in relation to copyright in a work:
55. Sections 33 and 33A, which have been relied upon by the
learned counsel for the appellants, read as follows:
“33. Registration of copyright society.— (1) No
person or association of persons shall, after coming
into force of the Copyright (Amendment) Act, 1994
commence or, carry on the business of issuing or
granting licences in respect of any work in which copyright subsists or in respect of any other rights conferred by this Act except under or in accordance with the registration granted under sub-section (3):
Provided that an owner of copyright shall, in his individual capacity, continue to have the right to grant licences in respect of his own works consistent with his obligations as a member of the registered copyright society:
Provided further that the business of issuing or granting licence in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recordings shall be carried out only through a copyright society duly registered under this Act:
Provided also that a performing rights society functioning in accordance with the provisions of Section 33 on the date immediately before the coming into force of the Copyright (Amendment) Act, 1994 shall be deemed to be a copyright society for the purposes of this Chapter and every such society shall get itself registered within a period of one year from the date of commencement of the Copyright (Amendment) Act, 1994.
(2) Any association of persons which fulfils such conditions as may be prescribed may apply for permission to do the business specified in subsection (1) to the Registrar of Copyrights who shall submit the application to the Central Government.
(3) The Central Government may, having regard to the interests of the authors and other owners of rights under this Act, the interest and convenience of the public and in particular of the groups of persons who are most likely to seek licences in respect of the relevant rights and the ability and
professional competence of the applicants, register such association of persons as a copyright society subject to such conditions as may be prescribed:
Provided that the Central Government shall not ordinarily register more than one copyright society to do business in respect of the same class of works.
(3-A) The registration granted to a copyright society under sub-section (3) shall be for a period of five years and may be renewed from time to time before the end of every five years on a request in the prescribed form and the Central Government may renew the registration after considering the report of Registrar of Copyrights on the working of the copyright society under Section 36:
Provided that the renewal of the registration of a copyright society shall be subject to the continued collective control of the copyright society being shared with the authors of works in their capacity as owners of copyright or of the right to receive royalty:
Provided further that every copyright society already registered before the coming into force of the Copyright (Amendment) Act, 2012 shall get itself registered under this Chapter within a period of one year from the date of commencement of the Copyright (Amendment) Act, 2012.
(4) The Central Government may, if it is satisfied that a copyright society is being managed in a manner detrimental to the interest of the authors and other owners of right concerned, cancel the registration of such society after such inquiry as may be prescribed.
(5) If the Central Government is of the opinion that in the interest of the authors and other owners of right concerned or for non-compliance of Section
33-A, sub-section (3) of Section 35 and Section 36
or any change carried out in the instrument by
which the copyright society is established or
incorporated and registered by the Central
Government without prior notice to it, it is necessary
so to do, it may, by order, suspend the registration
of such society pending inquiry for such period not
exceeding one year as may be specified in such
order under sub-section (4) and that Government
shall appoint an administrator to discharge the
functions of the copyright society.
33A. Tariff scheme by copyright societies.— (1)
Every copyright society shall publish its tariff
scheme in such manner as may be prescribed.
(2) Any person who is aggrieved by the tariff
scheme may appeal to the Appellate Board and the
Board may, if satisfied after holding such inquiry as
it may consider necessary, make such orders as
may be required to remove any unreasonable
element, anomaly or inconsistency therein:
Provided that the aggrieved person shall pay to the
copyright society any fee as may be prescribed that
has fallen due before making an appeal to
the Appellate Board and shall continue to pay such
fee until the appeal is decided, and the Board shall
not issue any order staying the collection of such
fee pending disposal of the appeal:
Provided further that the Appellate Board may after
hearing the parties fix an interim tariff and direct the
aggrieved parties to make the payment accordingly
pending disposal of the appeal.”
56. Equally, Section 39, as substituted by the amending Act
of 1994, reads as follows:
“39. Acts not infringing broadcast reproduction
right or performer's right.— No broadcast
reproduction right or performer's right shall be
deemed to be infringed by—
(a) the making of any sound recording or
visual recording for the private use of the
person making such recording, or solely for
purposes of bona fide teaching or research; or
(b) the use, consistent with fair dealing, of
excerpts of a performance or of a broadcast in
the reporting of current events or for bona fide
review, teaching or research; or
(c) such other acts, with any necessary
adaptations and modifications, which do not
constitute infringement of copyright under
Section 52.”
57. The 2012 amendment to the Copyright Act was relied
upon and placed with great emphasis by learned counsel
appearing on behalf of the appellants. The Statement of
Objects and Reasons of this amendment Act stated as follows :
“The Copyright Act, 1957 was enacted to amend
and consolidate the law relating to copyrights in
India. To meet with the national and international
requirements and to keep the law updated, the Act
has been amended five times since then, once each
in the years 1983, 1984, 1992, 1994 and 1999. The
1994 amendment was a major one which
harmonized the provisions of the Act with the Rome
Convention, 1961 by providing protection to the
rights of performers, producers of phonographs and
broadcasting organizations. It also introduced the concept of registration of Copyright Societies for collective management of the rights in each category of copyrighted works. The last amendment in 1999 introduced a few minor changes to copy with the obligations under the Trade Related Aspects of Intellectual Property Rights (TRIPS).
2. The Act is now proposed to be amended with the object of making certain changes for clarity, to remove operational difficulties and also to address certain newer issues that have emerged in the context of digital technologies and the Internet. The two World Intellectual Property Organisation (WIPO) Internet Treaties, namely, WIPO Copyright Treaty (WCT), 1996 and WIPO Performances and Phonograms Treaty (WPPT), 1996 have set the international standards in these spheres. The WCT and the WPPT were negotiated in 1996 to address the challenges posed to the protection of Copyrights and Related Rights by digital technology, particularly with regard to the dissemination of protected material over digital networks such as the Internet. The member countries of the WIPO agreed on the utility of having the Internet treaties in the changed global technical scenario and adopted them by consensus. In order to extend protection of copyright material in India over digital networks such as internet and other computer networks in respect of literary, dramatic, musical and artistic works, cinematograph films and sound recordings works of performers, it is proposed amend the Act to harmonise with the provisions of the two WIPO Internet Treaties, to the extent considered necessary and desirable. The WCT deals with the protection for the authors of literary and artistic works such as writings, computer programmes; original databases; musical works; audiovisual works; works of fine art and photographs. The
WPPT protects certain “related rights” which are the
rights of the performers and producers of
phonograms. However, India has not yet signed the
above-mentioned two treaties. Moreover, the main
object to make amendments to the Act is that it is
considered that in the knowledge society in which
we live today, it is imperative to encourage creativity
for promotion of culture of enterprise and innovation
so that creative people realize their potential and it
is necessary to keep pace with the challenges for a
fast growing knowledge and modern society.
(xvii) make provision for formulation of a tariff
scheme by the copyright societies subject to
scrutiny by the Copyright Board.”
58. By this amendment, Section 2(ff) defining “communication
to the public” was replaced as follows:-
“2(ff) “communication to the public” means making
any work or performance available for being seen or
heard or otherwise enjoyed by the public directly or
by any means of display or diffusion other than by
issuing physical copies of it, whether simultaneously
or at places and times chosen individually,
regardless of whether any member of the public
actually sees, hears or otherwise enjoys the work or
performance so made available.
Explanation: For the purposes of this clause,
communication through satellite or cable or any
other means of simultaneous communication to
more than one household or place of residence
including residential rooms or any hotel or hostel
shall be deemed to be communication to the public.”
59. Certain amendments were made to Section 37(3)(e).
Section 39A was amended to extend the provisions of Sections
33 and 33A to owners of the broadcast reproduction rights as
“39A. Other provisions applying to broadcast
reproduction right and performer’s right.
(1) Sections 18, 19, 30, 30A, 33, 33A, 34, 35, 36,
53, 55, 58, 63, 64, 65, 65A, 65B and 66 shall, with
any necessary adaptations and modifications, apply
in relation to the broadcast reproduction right in any
broadcast and the performers’ right in any
performance as they apply in relation to copyright in
a work.
60. A reading of the aforesaid provisions, according to the
learned Senior Advocates for the appellants, makes it clear that
broadcasters may, in fact, be the owners of the original
copyright of a work – for example, if they themselves have
produced a serial. They may also be the copyright owners of
the broadcast of this serial which is a separate right under the
Copyright Act which they are able to exploit, and if there is a re-
broadcast of what has already been copyrighted, this again is
protected by Chapter VIII of the Copyright Act. The argument,
therefore, is that content that is carried by transmission from the
broadcasters to the ultimate consumer is, therefore, regulated
only by the Copyright Act and any royalties that can be charged
for exploitation of the three rights as aforesaid are governed
only by the Copyright Act. Further, the right to band
themselves into a society is by virtue of Section 33, which
mutatis mutandis applies to broadcasters alone. The tariff,
therefore, that may be charged under Section 33A of the
Copyright Act read with Rule 56 of the Copyright Rules is
nothing but compensation that is payable to broadcasters for
parting with their copyright in the manner indicated above.
This being the case, when TRAI fixes rates and/or interferes
with content, it is trespassing into the exclusive domain set out
by Parliament under the Copyright Act. Since the TRAI Act
and the Copyright Act, both being Acts passed by Parliament,
have to be harmonised, such harmony can only be maintained
if TRAI is kept out altogether from the domain covered by the
Copyright Act. Learned counsel for the appellants also strongly
relied upon the observations contained in Entertainment
Network (India) Ltd. v. Super Cassette Industries Ltd.,
(2008) 13 SCC 30, in which this Court explained as under:
“125. Are the terms “royalty” and “compensation”
not synonymous? “Royalty” means the
remuneration paid to an author in respect of the
exploitation of a work, usually referring to payment
on a continuing basis (e.g. 10% of the sale price)
rather than a payment consisting of a lump sum in
consideration of acquisition of rights. It may also be
applied to payment to performers. [See World
Copyright Law, (2nd Edn.) by J.A.L. Sterling.]
126. The word “compensation”, however, must have
been used keeping in view the fact that if it is a
statutory grant; it is a case of statutory licence. We
are not unmindful of the fact in cases of other
statutory licences, the word “royalty” has been used.
Even the word “usually” has been used. Mr Divan
himself has referred to Rule 11-A and Form II-A
appended to the Rules of 1958. Clauses (10) and
(11) of the form which have validly been made used
the word “royalty”.
“10. Rate of royalty, which the applicant
considers reasonable, to be paid to the
copyright owner.
11. Means of the applicant for payment of the
royalty.”
127. The legislature therefore for all intent and
purport equates “compensation” with “royalty”. In
the context of the Act, royalty is a genus and
compensation is a species. Where a licence has to
be granted, it has to be for a period. A
“compensation” may be paid by way of annuity. A
“compensation” may be held to be payable on a
periodical basis, as apart from the compensation,
other terms and conditions can also be imposed.
The compensation must be directed to be paid with
certain other terms and conditions which may be
imposed.”
61. Rule 56 of the Copyright Rules, 2013, also relied upon, is
set out hereunder:
“56. Tariff Scheme.— (1) As soon as may be, but
in no case later than three months from the date on
which a copyright society has become entitled to
commence its copyright business, it shall frame a
scheme of tariff to be called the “Tariff Scheme”
under section 33A of the Act setting out the nature
and quantum of royalties which it proposes to
collect in respect of the right or the set of rights in
the specific categories of works administered by it.
(2) Every copyright society shall display its Tariff
Scheme by posting it on its website.
(3) The Tariff Scheme shall indicate the separate
rates for-
(a) different categories of users;
(b) different media of exploitation, such as
telephone, broadcast or internet;
(c) different types of exploitation whether by
an individual or by groups or whether single or
multiple use or for advertising;
(d) different durations of use and territory; and
(e) any other differentiation factor indicated by
the society, as it may deem fit.
(4) While fixing the tariff the copyright society shall follow the guidelines issued by any Court or the Board, if any, and may consult the user groups.
(5) The copyright society shall collect the royalties from a licensee in advance where the Tariff Scheme provides for lump sum payment of royalties. In cases where the Tariff Scheme provides for payments in installments, each installment shall be collected in advance. However, in cases where the Tariff Scheme provides for the payment of royalties based on actual use, the copyright society may collect an advance at the time of issue of licence and settle the final payment based on actual use at the end of the period for which the licence is issued or granted.
Provided that the copyright society shall not receive any payment in the nature of minimum guarantee from a licensee whose royalty payments are based on actual use which are to be settled with the society at the end of the licence period except where, any exceptional circumstances are specifically included in the Tariff Scheme and the individual case has been approved by the Governing Council.
(6) The copyright society may revise the Tariff Scheme periodically but not earlier than a period of twelve months by following the rules. It shall publish the date of coming into of the revised Tariff Scheme at least before two months in advance and the same shall be posted on its website.”
62. At this juncture, it is of a little importance to compare and
contrast Section 2(dd) of the Copyright Act with “broadcasting
services” as defined in the impugned Regulation and Tariff
Order. By Clause 2(j) of the impugned Regulation,
“broadcasting services” is defined as follows:
“2(j) “broadcasting services” means the
dissemination of any form of communication like
signs, signals, writing, pictures, images and sounds
of all kinds by transmission of electro-magnetic
waves through space or through cables intended to
be received by the general public either directly or
indirectly and all its grammatical variations and
cognate expressions shall be construed
accordingly;”
63. When the definitions of “broadcast” in Section 2(dd) of the
Copyright Act and of “broadcasting services” in Clause 2(j) of
the impugned Regulation are compared, what is clear is that
the words “intended to be received by the general public either
directly or indirectly” are completely missing from the definition
of “broadcast” contained in the Copyright Act. Also, Section
52(1)(b) of the Copyright Act indicates that transient or
incidental storage of a work or performance purely in the
technical process of electronic transmission or communication
to the public is not an act that would constitute infringement of
copyright. Section 52(1)(b) reads as follows:
“52. Certain acts not to be infringement of
copright.- (1) The following acts shall no constitute
an infringement of copyright, namely:-
(b) the transient or incidental storage of a work or
performance purely in the technical process of
electronic transmission or communication to the
public;”
64. The picture that, therefore, emerges is that copyright is
meant to protect the proprietary interest of the owner, which in
the present case is a broadcaster, in the “work”, i.e. the original
work, its broadcast and/or its re-broadcast by him. The interest
of the end user or consumer is not the focus of the Copyright
Act at all. On the other hand, the TRAI Act has to focus on
broadcasting services provided by the broadcaster that impact
the ultimate consumer. The focus, therefore, of TRAI is that of
a regulatory authority, which looks to the interest of both
broadcaster and subscriber so as to provide a level playing field
for both in which regulations can be laid down which affect the
manner and carriage of broadcast to the ultimate consumers.
Once the relative scope of both the enactments is understood as above, there can be no difficulty in stating that the two Acts
operate in different fields. We do not find on a reading of the
impugned Regulation as well as the Tariff Order made that
TRAI has transgressed into copyright land. This is for the
reason, as has been stated hereinabove, that regulations which
allegedly impact packaging TV channels, pricing of TV
channels and the broadcaster’s right to arrange his business as
he pleases, all have to be viewed with the lens of a regulatory
authority, which is to provide a level playing field between
broadcaster and subscriber. We have also noted how the
broadcaster is free to provide whatever content he chooses for
the TV channels that he chooses to transmit to the ultimate
consumer. We have also noted how the broadcaster is free to
arrange pricing of his TV channels so long as they are non-
discriminatory and do not otherwise have the effect of
unreasonably restricting the choice of a subscriber to choose
bouquet or a-la-carte channels as has been held hereinabove.
We are satisfied that the impugned Regulation and Tariff Order
have been passed by a regulatory authority after applying its
mind to the objections of the various stakeholders involved after
which the Regulation and Tariff Order have been laid down
which have, by and large, been initially acceded to by the
broadcasters themselves. In this view of the matter, we are of
the view that the Copyright Act will operate within its own
sphere, the broadcaster being given full flexibility to either
individually or in the form of a society charge royalty or
compensation for the three kinds of copyright mentioned
hereinabove. TRAI, while exercising its regulatory functions
under the TRAI Act, does not at all, in substance, impinge upon
any of these rights, but merely acts, as has been stated
hereinabove, as a regulator, in the public interest, of
broadcasting services provided by broadcasters and availed of
by the ultimate consumer.
65. As Dr. Singhvi has repeatedly stressed that fixation of
rates under Section 11(2) would directly impinge upon
compensation payable for copyright to the broadcasters, it is
important to note that both the Copyright Act as well as the
TRAI Act are central enactments which do not expressly
provide that the one overrides the other. In this situation, a
basic principle of interpretation of statutes is that both Acts be
harmonized in the event of any clash/conflict between the two
so that both may be given effect to. In fact, Section 38 of the
TRAI Act reads as under:-
“38. Application of certain laws. – The provisions
of this Act shall be in addition to the provisions of
the Indian Telegraph Act, 1885 (13 of 1885) and the
Indian Wireless Telegraphy Act, 1933 (17 of 1933)
and, in particular, nothing in this Act shall affect any
jurisdiction, powers and functions required to be
exercised or performed by the Telegraph Authority
in relation to any area falling within the jurisdiction of
such Authority.”
66. Since the Telegraph Authority, acting under the Telegraph
Act and the Indian Wireless Telegraphy Act, is required to act in
public interest, the jurisdiction of the said Authority is left
untrammeled by the provisions of the TRAI Act. It can thus be
seen that TRAI and the Telegraph Authority both act in public
interest. The TRAI Act, the Telegraph Act and the Indian
Wireless Telegraphy Act, being statutes in pari materia, form a
Code, insofar as wireless telegraphy and broadcasting is
concerned.
67. We are, therefore, clearly of the view that if in exercise of
its regulatory power under the TRAI Act, TRAI were to impinge
upon compensation payable for copyright, the best way in
which both statutes can be harmonized is to state that, the
TRAI Act, being a statute conceived in public interest, which is
to serve the interest of both broadcasters and consumers, must
prevail, to the extent of any inconsistency, over the Copyright
Act which is an Act which protects the property rights of
broadcasters. We are, therefore, of the view that, to the extent
royalties/compensation payable to the broadcasters under the
Copyright Act are regulated in public interest by TRAI under the
TRAI Act, the former shall give way to the latter. As there is no
merit in these appeals, the same are, therefore, dismissed.
(R.F. Nariman)
(Navin Sinha) New Delhi; October 30, 2018.