Indiantelevision.com Team

(26 May 2007 3:30 pm)

NEW DELHI: The final arguments in the case between broadcast regulator Trai and Harish Thawani's Neo Sports have concluded, with the sector tribunal reserving judgment and expected to deliver it after the summer vacation ends on 1 July.

During the closing arguments on Thursday, the Telecom Disputes Settlement Appelate Tribunal (TDSAT) grilled the channel's senior counsel as to why till date it had not been able to show the survey that was to establish that the pricing of Neo Sports at Rs 58.50 was justified.

The tribunal noted also that Neo had said it would commission the survey only after Trai had decided to correct their price from RS 58.50 to RS 37.25, which is according to the regulation at par with channels of a similar genre (sports) and language (English), as rival channel ESPN Star Sports.

The Trai order in January this year came by way of an 'intervention' under the relevant provisions of the original order of price freezing in October 2004, and this intervention had been challenged by Neo Sports.

The tribunal asked also: "If you want in the future to change the content of your channel to any other game, can you do it?"

This question was asked in the context of Neo senior counsel Gopal Jain arguing repeatedly over the past two days that the special pricing for Neo Sports was because it is a cricket-centric channel, which is different even within the genre of sports.

The tribunal asked: "The way cricket is going, it is unpopular, and in fact, football is fast picking up. So, if you see that football is having better demand, can you change from being cricket-centric to football centric?"

Jain asserted that Neo will not do so, which did not satisfy the judge, who asked, "The question is not 'will not' but 'can you'?" To this Jain said Neo cannot do so because the entire business plan and financial arrangements have been made precisely on the basis that it is a cricket-centric channel.

Jain pointed out that Neo had bid $612 million for the rights to all cricket matches in India, and the pricing had been done scientifically, and was not aimed at making 'windfall profits'.

The basic premise under which Neo had sought to challenge the January 2007 Trai order correcting the channel price to bring it down to RS 37.25 was that Trai had issued the order under section 13 of the Act, whereas that could not be done and hence the order is bad in law.

Neo had argued that tariff orders can be given under 11 (2) b of the Act, which Trai had not done.

Jain argued that they had reported to Trai they were launching a new channel and pricing it at RS 58.50, but Trai had written back to them that the price appears to be on the higher side.

Jain argued also said they had written to Trai that if they were not satisfied, they could still get in touch with them.

Jain held that after this, Trai simply did not discuss with them anything but issued an order without specifying on what basis it had done so.

Neo's argument was also that this was bad conduct, as Trai had been silent for 82 days after the Neo response and suddenly clamped down on the price, which went against all provisions of transparency and Trai did so knowing fully well that the matches were at hand and Neo had spent tonnes of money.

Trai's senior counsel's argument over the two days of arguments was that the tribunal need not take the order of January 2007 in isolation, but go back to the root of that order.

That root lay in the tariff freeze order of October 1, 2004, which said that pricing of all channels would be frozen to those existing on December 26, 2003.

This Order gave Trai two sets of powers, (a) to fix tariff and (b) other regulatory powers under section 11 (1) b, which includes intervention.

The power to fix tariff was exercised by Trai by freezing the rates to those existing on December 31, 2006, and the order also meant that new channels would be priced on the model of prices of similar channels, and they would have to report the price they fix within seven days of doing so.

However, the order also gave Trai some other regulatory authorities under section 11 (1) b, which includes the right to intervene and issue directions for correcting price it Trai found them anomalous, and this could be done under section 13.

Malhotra said that consequent upon the Order, an amendment was made on July 31, 2006, which clarified that 'similarity' of channels would be decided upon under two factors: genre and language.

Malhotra argued that both the Principle Order and the amendment had been done after protracted consultation with all stakeholders and this had been admitted by Neo as well.

He said that that Order had never been challenged in any court, and the period (30 days) within which this could have been challenged is over.

Malhotra said that it had evidence that the price of ESPN channels worked out to RS 37.50 and since Neo Sports was a similar channel, in terms of both genre (sports) and language (English), it was correct in slating down the price to that amount.