TRAI, Intervenors defend Tariff Order and Interconnection Regulations in Madras HC

The case concerning the Tariff Order and Interconnection Regulations introduced last year by the Telecom Regulatory Authority of India (TRAI) appears to progressing as per schedule. Justice MM Sundresh had commenced hearing the matter in the first week of April..Following arguments presented for Star India, Vijay TV and TRAI, the judge on Monday heard arguments presented on behalf of intervenors in the matter..The jurisdiction of TRAI to introduce the impugned provisions was reasserted, inter alia, by placing reliance on Section 11 (1) (b) and (2) of the TRAI Act, 1997..It was submitted that over the years, the law had evolved so as to make it imperative that there be transparency and non-discrimination when it comes to the provision of such services, as also emphasised in the NSTPL case. To this end, it was argued that the impugned provisions seek to ensure transparent disclosure so that there is no scope for discrimination..TRAI Tariff Order and Copyright Act operate in different fields.Notably, Senior Counsel G Masilamani, appearing for intervenor, Videocon d2H, argued that TRAI provisions do not infringe upon an occupied field, contrary to the petitioners’ stance..To buttress this position, Masilamani argued extensively on the contours of the field covered by the Copyright Act, 1957 to distinguish the field amenable to regulation by TRAI..Among other submissions, it was emphasised that Broadcast Reproduction Rights (BRR) is not the same as a copyright. Referring to Section 37 of the Copyright Act, it was contended that the nature of the right is much narrower..BRR only involves preventing a third party from rebroadcasting the subject matter for a period of 25 years. It is exercised subject to the terms under which the BRR is granted. Therefore, Masilamani argued that BRR is not protected in the same way a copyright is under the Copyright Act..Further, it was argued that the relation between the platform owner/Broadcaster and the ultimate consumer is not regulated by the Copyright Act. In this regard, Masilamani queried as to whether there was any provision indicating that tariff regulation would fall under the Copyright Act..The case against Illusory Pricing.“Nobody will sell property for a loss”, argued Masilamani..This remark was made in context of submissions made indicating that the broadcasters were interfering with the free market process. The contention is based on the premise that the broadcasters could artificially inflate prices for individual channels (a-la-carte channels), so that a channel bouquet would appear more attractive for consumers at a relatively discounted price..Masilamani pointed out that the TRAI regulations would ensure that honest prices were given for the a-la-carte channels, so that consumers were not fooled into opting for channel bouquets. He also queried as to what possible loss would be suffered by broadcasters on account of the TRAI order/regulations mandating that the price of a bouquet should not be less than 85% of the price of the a-la-carte channels..Submissions made on behalf of TRAI by Senior Counsel P Wilson also emphasise that the challenged TRAI provisions were introduced to prevent illusory pricing of a-la-carte channels, which would otherwise force consumers to take a bouquet..In written submissions filed on behalf of TRAI, it has been argued,.“...the prices of the a-la-carte channels are inflated purposefully so as to dissuade the consumer from choosing a channel a-la-carte…In fact, as per the study undertaken by TRAI during the consultative process and observing the market, it is clear what the Petitioner is doing is in fact boosting up/jacking up the a-la-carte price to an illusory price and then creating the fiction of a discount.“.More analogies for thought.Whereas rose bouquets and restaurants were used to advance the petitioners’ case, the respondents have not disappointed in offering alternative analogies to represent their case..In arguments made on Monday, Senior Advocate Masilamani referred to the manner is which a compilation of short stories would be priced by a publisher. Whereas the author may have certain rights over his stories, it is the publisher who ultimately decides the price at which the compiled book is sold..In the meanwhile, a hypothetical fish vendor finds mention in written submissions filed on behalf of TRAI, to explain its case against illusory pricing of channels..“For example, take a fish vendor who has a basket of fish worth about Rs 30/kg in the prevailing market. The vendor does not disclose the real price of the fish. Instead, in his rate card, he writes the rate as Rs. 100/- per kg. When a consumer approaches, he says, ‘The price of this fish is actually Rs 100/- per kg but I will give it to you for Rs 40/- if you take it along with this other fish from me’..…it may be a business strategy of the fish vendor to jack up his price and then offer an illusion of price reduction through a discount. However, at the end of the day, the buyer’s choice is not real since the real price is not disclosed to the buyer. Therefore, to bring about the real price of the channel, the bouquet – a-la-carte relationshop is defined in the impugned regulations and tariff order. .Further, unlike the fish market example, when it comes to broadcasting, TRAI has a statutory as well as a constitutional duty to protect the interests of the subscriber. This is because the predominant right of the subscriber to receive information takes precedence to the broadcaster’s right to monetize as per the ratio in the Cricket Association of Bengal case. “.Arguments in the matter will continue on Tuesday.