| One
of the key aspects of the Order is that the
broadcasters have to now compulsorily offer
all channels on an a la carte basis to the
MSOs. The MSOs had hailed this as a revolutionary
step, but the broadcasters found this shocking.
In
its appeal, Zee has averred that in non-Cas
areas, there is no technological mechanism
to deliver a la-carte channel to the subscribers
and it is impossible to ascertain the exact
number of consumers receiving such individual
channels, which means revenue loss to the
broadcasters.
Zee
has sought to show Tdsat that Trai has gone
against its own stated positions in principle
Tariff Order dated 1.10.04, para 4.43 on
the "Sunset date of Price Regulation
Clause; para 4.28 on non-Cas having no choice
of channels; para 2.7, which states Trai's
vision of how TV broadcasting and distribution
should grow in the future; para 5 of the
Explanatory Memorandum to the Principle
Tariff Order, and so forth.
Para
2.8 0f the Principle Tariff Order says:
"The key element of this vision is
that the best regulatory framework is one
that allows the industry to grow so that
consumers have multiple choices giving them
freedom to choose their content and operator/platform.
"This
competition together with addressability
would empower the consumer to control his/her
expenditure on viewing television channels."
Zee
holds that the latest Order has gone against
this in as much it does not allow free competition
but compels broadcasters to make certain
offers that are detrimental to their business
interests.
Interestingly,
this is a substantially different position
from the one taken by Set Discovery, the
first broadcaster to challenge the Order,
and adds more dimensions, which is bound
to make the case more complex and Trai will
have to fight on several grounds now.
On
the issue of fixation of prices for new
channels, which is also covered in the Tariff
Regulation Order of 4 October, Zee has said
that that too violates Trai's own earlier
stated position, which it quotes as follows:
- Fixation
of prices charged for new pay channels
to consumers is difficult because of large
variations of these prices and of the
difficulty in linking these to costs.
- Further
this is a localised issue which is not
easily amenable to centralised regulation.
Prices in different parts of the country
are based on different systems using different
methodologies for fixing the subscriber
base.
-
Many of these problems will get resolved
if addressability is introduced, giving
consumers choice and making the interconnection
agreements more transparent.
-
Trai has separately sent recommendations
to the Govt. which inter alia, provide
for a framework for transition to addressability
in different situations.
-
However, in the interim period prices
will have to be regulated. This revised
tariff order provides the framework for
such regulation."
"It
is respectfully submitted that the impugned
Tariff order is without jurisdiction, perverse,
unjust, arbitrary and in fact contradictory
to the earlier Tariff Order/Recommendations
of Trai," the Zee appeal says.
The
order is in complete disregard to the prevalent
ground realities of non-addressable regime
and if implemented would only cause further
disorder in the cable market where there
already exists huge and enormous level of
under-declaration by the cable operators
already causing severe financial prejudice
to the broadcasters.
Interestingly,
Zee argues on the fact that a majority of
its revenue is from subscription, and hence,
its main income stream will be badly hit
if the order is allowed to come into operation,
with the proposed date being 1 December
2007.
It
says that Zee's subscription revenue for
the non-addressable platform is already
hurt because of under-declarations by the
MSOs and cable operators, and this Order
would affect the viability of the entire
business itself.
Also
Read:-
Set
Discovery challenges a la carte pricing
in Tdsat
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