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a consequence, Set says, the tariff order
enables MSOs to charge / levy a carriage fee,
which is not regulated and which is tantamount
to unjust enrichment of MSOs at the cost of
broadcasters.
It
says too that the price freeze slab structure
imposed by the Authority gives a handle
to MSOs / LCOs to arm-twist broadcasters
/ new broadcasters who wish to add channels.
Among
the other grounds on which the order has
been challenged are as follows:
- The
basis of the tariff order is irrational
as the Authority has fixed different prices
for the same content.
-
Trai has been arbitrary and discriminatory
and failed to serve the objective of fixing
a proper/correct price, though it is well
settled that price fixation should be
based on relevant material and should
be fair and reasonable and that not a
minimum but a reasonable profit margin
is permissible.
- The
Authority proceeded on the erroneous premise
that the market does not have sufficient
level of competition, though there is
sufficient competition to let market forces
determine prices.
- The
authority has failed to take into account
the ground realities and the change in
scenario, with the advent of various alternative
addressable platforms and new channels.
- The
authority has acted in violation of the
mandatory provisions of S. 11(4) of the
Trai Act.
Set
has also sited the decision given by the
Supreme Court in its judgment Ashoka
Smokeless Coal India (P) Ltd. v. Union of
India [Ref: (2007) 2 SCC 640] where
it was held that prices are required to
be fixed keeping in mind the market forces
as in a market governed by free economy
where competition is the buzzword, producers
may fix their own price and that demand
and supply are a relevant factor while fixing
tariffs.
Set
has contended that the 4 October order goes
contrary to this.
The
broadcaster has averred that the tariff
order will have a direct bearing and impact
the investments in new channels resulting
in poor/low quality of programmes which
will eventually affect the consumer/public
interest.
"The
basic function of the Authority while fixing
tariffs is to collect accurate data and
analyze the same to balance competing interests,"
it has held.
"The
Authority has failed to balance interests
and its tariff fixation will impact the
content providers.
"It
is well known that the popularity of a channel
depends on the quality of its content, which
in turn Is dependent on the investments
made by broadcasters for developing appropriate
content," Set Discovery says.
The
tariff order will have an adverse impact
on the level of investment, which in turn
will affect the quality of programmes and
eventually consumer interest.
The
tariff order has failed to address the root
cause of the problem in this sector which
is under declaration. In January 2004 the
authority had imposed a blanket price freeze/cap.
Interestingly,
Set has challenged the order on the ground
that the Authority has applied principles
from the telecom sector to the broadcasting
sector in fixing tariffs, though there is
a fundamental difference between the two
- both in terms of nature of business and
the dynamics.
While
the broadcaster has prayed that the order
be quashed and in the interim, the execution
of the order be stayed, MSOs say that they
had been urging the broadcasters to jointly
work out channel grouping and other formulations.
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