Indian Broadcasting Foundation (IBF) moves SC against HC’s NTO 2.0 verdict

On 30 June, Bombay HC had upheld constitutionality of the new tariff order.

New Delhi: The Indian Broadcasting Foundation (IBF) has filed a petition in the Supreme Court against the Bombay high court verdict, which had upheld the constitutionality of the amended New Tariff Order (NTO 2.0) passed by the Telecom Regulatory Authority of India (Trai).

After a legal tussle that lasted over a year, Trai had managed to get a green signal from the court on 30 June on the implementation of amended NTO 2.0 passed in January, 2020. The division bench of the high court stated that the challenge to the constitutional validity of the 2020 rules and regulations of Trai does not hold any water. At the same time, it termed one of the twin conditions "arbitrary", according to which the maximum retail price of an a-la-carte channel could not be more than one third of the maximum rate of a channel in the bouquet.

The court had passed the judgement on petitions filed by several broadcasters under the umbrella of the Indian Broadcasting Foundation (IBF) including Zee Entertainment, Star India, TV18, and Sony Pictures Network India (SPN) who had opposed the order, challenged the tariff order and termed it "arbitrary and in violation of their fundamental right."

According to broadcasters, the new order could lead to a drop in the subscription revenue, especially now, when the industry is reeling under pandemic-induced low advertising revenue. NTO 2.0 has prescribed linkage between a-la-carte price and bouquet, and reduced the price cap on the subscription fees for pay channels. So, TV broadcasters can include a channel in a pack only if it is priced at Rs 12 or less than that. Earlier, this limit was Rs. 19.

The broadcasters only got partial relief when the high court struck down one of the twin conditions relating to the average pricing of a channel in a bouquet terming it as ‘arbitrary’. This will allow broadcasters to increase the number of channels they want to provide in the bouquet and enhance the value delivered to consumers.

According to the condition the a-la-carte rates of each pay channel (MRP), forming part of a bouquet, shall in no case exceed three times the average rate of a pay channel of that bouquet. So, if the maximum price of a channel in a pack was Rs.12, a broadcaster could not charge more than four rupees for an a-la-carte channel.

The high court had also extended its previous interim order, asking Trai not to take any coercive action against the broadcasters, if they did not implement the new tariff order. The order was extended for the next six weeks.

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