MAM
TDSAT-Ad cap: 2nd amicus curiae done, channels turn now
MUMBAI: The second amicus curiae Aman Ahluwalia continued his arguments today in the TDSAT-ad cap hearing. After giving the legal perspective yesterday, today he focused on the commercial implications of the ad cap regulation.
Ahluwalia said that the Telecom Regulatory Authority of India (TRAI) has the power to implement licensing under section 11 (1) (a) of the TRAI Act as well as enforcing it on broadcasters through section 7 (11) of the Cable TV Networks (CTN) Act. There is no need for it to choose the CTN act. The TRAI’s procedure may have been faulty but the bench should not strike down the ad cap regulation on account of this.
The bench wondered that when a licence is issued, the terms and conditions need to be read properly, and if the ad cap regulation issued by TRAI adds anything to section 7 (11) of the CTN act, then should it be accepted. The agreement between the licensor and licensee is only for section 7 (11) and if points like clock hour and reporting to TRAI come into the picture, it is in excess of the section.
The bench said that one cannot change, modulate or supplement the terms of the licence. If TRAI had implemented it under sections 11 and 12 of the TRAI Act that address the issue of licensing and advertisements then such problems wouldn’t have come up.
The amicus curiae read out the final draft report of the convergence bill which gives the definition of ‘broadcasting services,’ as it doesn’t have an exact one. He said that content, distribution and technical components all come under the TRAI act and content and distribution together mean carriage. By reading out reports such as the Nariman report, he chose to interpret broadcasting services to include content.
Ahluwalia then proceeded to the commercial aspects. He told the bench that after reading the code in the UK, he saw that the ad cap may work for GECs while the news channels that have less viewership will be most affected by it. The only way revenue can be raised is either by digitisation when subscription revenue will go up, or by raising advertising rates. However, if subscription rates are jacked up, viewers may not pay, and resort to cord cutting, resulting in lower viewership, and comitantly lower ad revenues as they depend entirely on viewership.
To support his statement, he also produced financial reports of Zee TV and the Sun Network which showed that their ad revenues were high as compared to news channels. Sponsored shows could be a way out for news channels to generated additional revenues but this could turn out to be dangerous as news could become coloured. And thus he suggested that genres should be dealt with differently.
According to him, English news channels will be the most affected because advertisers will start turning the screws on them as viewership will quite likely drop off the cliff. The scenario could improve when DAS is implemented completely all over the country as by then subscription and ad revenues each will contribute equally to a company’s top line.
Reading from an Ofcom (independent regulator and competition authority for the UK communications industries) report, he emphasized that TRAI’s ad cap regulation needs to be more precise in terms of the number of ads per half an hour, duration of the promos etc. Till DAS isn’t complete, it should not be implemented as, under Article 19 of the Constitution, broadcasters have the right to disseminate information and viewers have the right to receive plurality of information giving them the power to choose.
If the regulation comes into effect now, many smaller news channels may shut down and the existing ones will generate less revenue and hence news could end up being coloured as only a limited number will be left to provide news.
After Ahluwalia concluded, the News Broadcasters Association (NBA) counsel presented the rejoinder. He argued that TRAI’s analysis of the ad cap violations was incorrect.
His second argument was that TRAI has the power to implement the terms and conditions between the licencee and licensor under section 4 A of the Telegraph Act that talks about teleport licences. It cannot implement it on the basis of the uplinking and downlinking policies.
Teleport licences do not mention the CTN act at all and when TRAI is enforcing it on the basis of licensing then its line of reasoning needs to be read in the context of teleport licensing.
The NBA counsel stated that TRAI cannot act against broadcasters under the uplinking/downlinking policy since it falls under the ambit of the Ministry of Information and Broadcasting.
During its arguments, TRAI mentioned that broadcasters had suppressed documents related to licensing. The NBA counsel clarified that the data was about OB vans and teleports, which was available in the public domain.
He added that, according to Ofcom, UK channels were allowed ad commercials of 9-12 minutes averaging and not per clock hour. Also, if TRAI were to enforce the ad cap, it should be under the teleport licence under section 4 A of the Telegraph Act.
The NBA will continue its rejoinder tomorrow as well.
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The Fundamental Difference People Overlook
A working capital limit, often structured as an overdraft or a revolving credit facility, gives you access to funds up to a pre-approved ceiling. You draw what you need, pay interest on what you use, and replenish it as receivables come in. It is designed for short-term, recurring needs like paying suppliers or covering payroll gaps.
A term loan disbursed quickly, on the other hand, drops a fixed amount into your account. You repay it in instalments over a set period, with a clear end date. The interest rate is typically fixed or at least predictable. These two products solve different problems, and treating them as interchangeable is where businesses get into trouble.
When Speed and Certainty Matter More Than Flexibility
Here’s a scenario that plays out constantly. A retailer gets an opportunity to buy inventory at a steep discount, but the supplier wants full payment within 48 hours. The retailer’s working capital limit is already partially drawn. The available balance might cover part of the order, but not all of it. Requesting a limit enhancement takes days, sometimes weeks, because the bank reassesses your financials.
An instant business loan solves this cleanly. You apply, get approval quickly, and the full amount lands in your account. You buy the inventory, sell it at full margin, and repay the loan over the next few months. The cost of interest on that loan is far less than the profit you would have lost by passing on the deal.
This pattern repeats across industries. A logistics company needs to repair a critical vehicle immediately. A restaurant has to replace kitchen equipment before the weekend rush. A manufacturer lands a large order but needs raw materials upfront. In each case, the need is urgent, specific, and finite. A revolving facility wasn’t built for these moments.
The Hidden Cost of Over-Relying on Working Capital Limits
There’s a psychological trap with revolving credit. Because it’s always available, business owners tend to lean on it for everything, including expenses that really should be financed separately. When you use your overdraft to fund a one-time capital purchase, you reduce the buffer available for daily operations. Then, when a genuine cash flow gap appears the following week, you’re scrambling.
Worse, many working capital limits come with annual renewal. If your financials have dipped, the bank can reduce your limit or decline renewal altogether. If you’ve been using the facility for purposes it wasn’t designed for, your utilisation patterns can actually work against you during the review.
A distinct term loan keeps your working capital limit clean. Your revolving facility handles day-to-day operations. Your loan handles the one-off expense. This separation makes your balance sheet easier to read and your banking relationship easier to manage.
Interest Rate Math That Favours Term Loans
Working capital limits often carry floating interest rates pegged to the bank’s benchmark. The rate adjusts, and over time, especially when monetary policy tightens, your cost of borrowing can creep up without you noticing because you’re only looking at the small daily interest debit.
A fixed-rate term loan gives you certainty. You know exactly what each instalment will be, which makes cash flow forecasting more accurate. For a specific expense with a known amount and a defined payback period, this predictability matters. You can map the repayment against the revenue that expense is expected to generate.
A working capital loan structured as a revolving facility makes sense when your borrowing needs fluctuate week to week. But when you know exactly how much you need and roughly how long it will take to pay back, a term product is almost always cheaper in total interest cost. The discipline of fixed repayments also prevents the slow balance creep that plagues overdraft users.
When Your Facility Is Maxed and Opportunity Knocks
Perhaps the most compelling case is the simplest one. Your existing limit is fully utilised. Business is good, money is coming in, but right now the account is stretched. A new opportunity appears. You can either let it pass or find additional funding fast.
Waiting for a limit increase is not a strategy when timing matters. Applying for a separate short-term loan, getting approval the same day or the next, and funding the opportunity directly is a concrete action with a measurable return. You are not adding long-term debt to your balance sheet. You are financing a specific transaction that pays for itself.
The smartest business owners don’t treat all credit as the same. They match the product to the need. Revolving facilities handle rhythm. Term loans handle moments. Getting that distinction right is one of the quieter advantages a well-run business holds over its competitors.
