TRAI to seek Solicitor General's opinion on implementation of NTO 2.0

The regulator will take Solicitor General Tushar Mehta's suggestion on whether it should write letter to broadcasters to comply with NTO 2.0

e4m by Javed Farooqui
Updated: Aug 19, 2021 9:10 AM

With the broadcasters failing to get an interim relief in the new tariff order (NTO) 2.0 case heard by the Supreme Court on Wednesday, Telecom Regulatory Authority of India (TRAI) will now seek the opinion of Solicitor General Tushar Mehta on the next course of action on implementation of the amended tariff order.

The broadcasters have failed to file the Reference Interconnect Offers (RIO) even as the August 12 deadline has passed. While upholding the NTO 2.0 barring the second of the twin conditions, the Bombay High Court had ordered the TRAI to give six-week time to the broadcasters to comply with the amended tariff order.

“We will take the opinion of Solicitor General (Tushar Mehta) on the next course of action that the regulator should follow as far as NTO 2.0 is concerned,” a senior TRAI official said on condition of anonymity. “If the SG tells us that we should write to the broadcasters and ask them to comply with NTO 2.0, then we will write letters to the broadcasters.”

However, the official also said that TRAI will not take any decision in haste. The TRAI's position has been that the broadcasters have to comply with NTO 2.0 since there is no stay granted by any court of law. “The broadcasters have to decide if they want to comply with the law or not. Our view is that we don't look at a week or 10 days when it comes to regulating the broadcasting sector. We have a long-term view of the sector,” the official asserted.

According to a broadcasting sector legal expert, the broadcasters will not file RIOs as it will mean complying with the NTO 2.0 and then the plea for interim relief will be rendered meaningless. Also, the broadcasters will have a reason to rush back to the SC for interim relief if the TRAI takes any legal action.

Another source said that the TRAI has burned its hands many times in the past by directing broadcasters to comply even when the matters were sub-judice. “They have learned their lessons and which is why they are not insisting on filing of RIOs by the broadcasters,” the source added.

The broadcasters have moved the Supreme Court against the Bombay High Court order, which upheld the TRAI's powers to regulate broadcast tariff in the larger public interest. The HC also validated the amendments made to the NTO barring the second of the twin conditions which mandated that the channels included in a bouquet cannot be priced more than three times the average price per channel.

The HC allowed the TRAI's amendments like bringing down the channel MRP cap to Rs 12 from Rs 19. Any channel priced above Rs 12 cannot be part of the bouquet. The first proviso which caps the bouquet discount at 33% has also been upheld.

“The broadcasters have to decide whether they want reach by bundling all the channels in a bouquet or want to earn subscription revenue by pricing popular channels at a high price. They can't have it both ways as we get a lot of complaints from the consumers on too many ads getting aired during a programme despite paying subscription fee for the channels,” the TRAI official said.

On the allegation that TRAI is regulating prices, the official said that the regulator has given the freedom to broadcasters to charge any amount for their channels provided they are outside the bouquet. “If broadcasters are confident of their product, then they will sell it at the MRP rate. They are free to price their channels at whatever amount they feel is right,” he stated.

What SC order said

The Supreme Court issued notices to TRAI and UOI on the petitions filed by the Indian Broadcasting and Digital Foundation (IBDF), ZEEL, Sony Pictures Networks India (SPNI), TV18/Viacom18, Star India and Film and Television Guild of India against the Bombay High Court judgment upholding the NTO 2.0.

The matter has been listed for hearing on September 7 for consideration of stay on NTO 2.0. TRAI has been directed to file its reply before the next date of hearing. The bench of Chief Justice NV Ramana, Justice Surya Kant, and Justice Aniruddha Bose, presided over the hearing.

The bench heard senior counsel appearing for the petitioners, Tushar Mehta, Solicitor General appearing for the Union of India (UoI) and Rakesh Dwivedi, senior counsel appearing for the TRAI. SG Tushar Mehta and Rakesh Dwivedi accepted and waived formal notice on behalf of the respondents.

“So far as the prayer for grant of interim relief is concerned, taking into consideration the rival submissions made by the learned senior counsel appearing for the parties, we are not inclined to grant the same at this stage,” the court said in its order.

The bench directed the TRAI and UOI to file their respective counter affidavits in the matters well before the next date of hearing. The broadcasters have also been permitted to file reply to the counter affidavits, if any, well in advance, and both the parties are directed to file the counter affidavits & rejoinder affidavits in a convenience volume, the bench said.

Background of the case

The IBDF along with member broadcasters has challenged the validity of NTO 2.0 contending that the capping of channel pricing will restrict the fundamental right of free speech and expression of the broadcasters. The broadcasters also fear that the Bombay High Court order will give powers to the TRAI to micro-manage the broadcasting sector.

The biggest grouse that the broadcasters have against the Bombay HC order is that it has incorrectly read into Article 19(2) by applying an additional requirement of public interest when it comes to interpreting a broadcaster’s right to freedom of speech and expression under Article 19(1)(a).

The broadcasters have also argued that the Bombay HC order is erroneous and is liable to be set aside. They have also urged that the operationalisation of NTO 2.0 would require the broadcasters and distribution platforms to execute over 100,000 agreements, and it would be virtually impossible to roll back the effect of the said change, in the event its appeal succeeds.

The petitioners have also said that the TRAI will not suffer any prejudice or hardship if the court grants an interim stay. Therefore, the IBDF argued that the balance of convenience lies in favour of the broadcasters, since they stand to be subjected to greater inconvenience if there is no interim relief.

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