1. The issues that arise for consideration in this petition are the terms and conditions of the Reference Interconnect Offer (RIO) offered by the respondent to the petitioner and their compliance and conformity with applicable Interconnect Regulations and Tariff Order. The prayer in this petition, inter-alia, is to direct the respondent to make the necessary changes/amendments in its Reference Interconnect Offer including clause 5.6 and 8.2 thereof, so as to bring the same in compliance, and in conformity, with the applicable Interconnect Regulations and the Tariff Order.
2. There is a history of litigation between the parties and in order to understand the present dispute, it is necessary to go into the same briefly. The petitioner is a Direct to Home operator in India providing TV signals to the subscribers. The respondent is the sole and exclusive distributor of the following six TV channels :-
2. Star Sports
3. Star Cricket
4. ESPN HD
5. Star Sports HD
6. Star Cricket HD
3. In September, 2011, the petitioner approached the Tribunal by filing Petition No. 382 (C) of 2011. At that point of time, there was an agreement between the parties on a fixed fee deal for three of the respondents channels namely (1) ESPN (2) Star Sports (3) Star Cricket. The petitioner wanted to migrate from the existing agreement to the RIO (Reference Interconnect Offer) based agreement but could not do so due to dispute between the parties that included terms and conditions of the RIO. The respondent, in turn, filed Petition No. 398 (C) of 2011 praying, inter-alia, for specific performance of the existing agreement. The Tribunal vide its judgment dated 10.4.2012 allowed the petition of the petitioner and directed the parties to enter into an agreement with effect from 1.9.2011 which was to be governed by the modified RIO. The petition filed by ESPN Software, the respondent in the present case, was dismissed.
The above judgment of the Tribunal was challenged by the respondent vide Civil Appeal No. 4187 of 2012 before the Hon. Supreme Court. The application for interim relief, however, stands rejected by the Honble Supreme Court vide order dated 17.7.2012.
4. On 05.11.2012, the respondent issued a public notice under clause 4.3 of the Interconnect Regulations on the ground of non-signing of the agreement and breach of applicable regulations including reporting requirements. Another public notice under clause 4.3 was issued on 12.11.2012 on the ground of non-payment of subscription fee and breach of the TDSAT order dated 10.4.2012 and failure to permit the statutory audit. Aggrieved by this action of the respondent, the present petition was filed on 20.11.2012.
5. While restraining the respondent from giving effect to its public notices vide order dated 23.11.2012 , the Tribunal observed that the dispute between the parties seems to be on the following aspects:
(a) Reconciliation of accounts based on the audit of the SMS system of the petitioner
(b) Signing of the agreement
(c) Introduction of India Cricket Pack by the petitioner
In terms of the Tribunals order dated 10.04.2012 in Petition No.382(c) of 2011, the petitioner was entitled to the restitution of the amount which was paid to the respondent for the months of September 2011 onwards. This amount was to be determined on the basis of SMS reports. The parties were directed to reconcile their respective accounts on this behalf. Instead of reconciling the accounts the petitioner itself, based on its own record, determined that an amount of Rs. 19.68 crores was payable by the respondent to the petitioner in terms of the orders of this Tribunal. It started adjusting this amount from the subscription amount to be paid by it to the respondent. The entire amount of Rs.19.68 crores was adjusted out of the subscription amount to be paid by the petitioner to the respondent till September 2012. For the month of October 2012, an amount of Rs. 1.56 crores was paid to the respondent. The respondents contention is that the petitioner has not allowed the audit of its SMS system by the representatives of the respondent. Until and unless, the audit is allowed, it is not possible to determine the exact amount to be refunded to the petitioner in terms of the order of this Tribunal.
According to the respondent, the petition had formulated one India Cricket Pack which is a hybrid pack. This pack has been provided in such a way that subscribers opting for that pack get sports channels for the period of special sports events and where India is playing on one side. It will be available for the period of 5-10 days and whenever the match is complete, the channel will get disconnected. According to the respondent such practice is causing huge loss to it as the subscribers getting such facility will not be recorded and reported to the respondent On 23.11.2012, The following interim arrangement was made by the Tribunal :-
œ10. The parties have been heard for interim prayer extensively. I am of the opinion that the interest of justice will be sub-served if following directions are issued to the parties :
(a) The respondent will send its representatives to the petitioner for conducting audit in terms of the regulations and the same will be completed within a period of two weeks. The petitioner will provide full cooperation to the representatives of the respondent.
b) The petitioner will produce all the relevant records before the representatives of the respondent conducting the audit. It will also produce the records to show the manner in which œIndia Cricket Pack? is maintained.
(c) Based on the audit report, both the parties will meet and reconcile their accounts.
11. Till further hearing in this matter, the respondent is directed not to give effect to its public notices dated 5.11.2012 and 12.11.2012.?
6. On 17.12.2012, the respondent filed a Miscellaneous Application (M.A. No. 707 of 2012) on the ground of non-cooperation of the petitioner in the conduction of the audit and violation of the Tribunals order dated 23.11.2012. On 18.12.2012, the Tribunal pending detailed hearing of the application directed the petitioner to provide full access to the respondents representative to audit its Subscriber Management System (SMS), CAS and other systems.
7. On 23.7.2013, the respondent filed a Miscellaneous Application (M.A. No. 108 of 2013 in Petition No. 382 (C) of 2012) under Sections 19 and 20 of the TRAI Act, 1997 for violation and contravention of the directions given by the Tribunal in its judgment dated 10.4.2012. The respondent/applicant took the plea that the petitioners manner of offering the œIndia Cricket Pack? is in breach of the RIO and RIO agreement. As per the respondent/applicant, its channels can be offered either on a-la-carte basis or as a bouquet. It was submitted by the respondent that in terms of the Tribunals judgment dated 10.4.2012 the petitioner was bound to comply with the terms of the RIO which it has not done.
8. The genesis of the problem is œIndia Cricket Pack? (ICP) being offered by the petitioner to its subscribers. The scheme of this pack is that in some of the bouquets of channels being offered by the petitioner to its subscribers, Sports Channel of the respondent, which is telecasting the cricket matches in which Indian team is participating, is also shown only for the duration of such matches. For example, as per the brochure of the petitioner, it is offering a bouquet called œSuper Gold? which carries channels of various genres such as Hindi movies, English movies, general entertainment , international , educational, devotional, Hindi news, life style fashion, sports etc., œIndia Cricket Pack? is one of the packs made available with this pack and is offered as follows :-
œIndia Cricket Pack is an offering of any of channels showing Indian mens cricket match in a-la-arte mode. The channel provided at a given point of time will be the channel which is airing India playing cricket matches at that given point of time i.e. under this offering at any point of time only one channel will be provided in a-la-carte mode to the subscriber. When no India playing matches are available, the default channel will be TEN Sports?.
9. As per the respondent, though the petitioner has signed an RIO agreement without prejudice, it has impugned only clause 5.6 and clause 8.2 whereas the operation of ICP also violates clause 6 of the RIO agreement which obligates the petitioner to :-
(a) Provide the services of respondent without any interruption;
(b) Provide the services of respondent on a non-discriminatory basis;
(c) Cause continuous distribution of the services to all its subscribers without blacking it out;
(d) Package the services as per applicable law and to ensure that none of the services are disadvantaged or otherwise treated less favorably with respect to competing services on a genre basis.
10. The respondent submitted that the Regulations and Tariff Order framed under the TRAI Act specify the manner of offering of channels and method of calculation of the charges between the broadcaster of signals, distributor of signals and the subscribers. The summary of its submission is as under :-
(i) The petitioner is unjustly enriching itself by charging the consumer and not paying the broadcaster;
(ii) Unlike the telecom sector where the consumption of services is in minutes or bytes, in Broadcasting, the TV channels are to be provisioned on a 24x7 per subscriber per month continuous basis;
(iii) Under the statutory framework, TV channels can be offered either on a-la-carte basis or on a bouquet basis. The concept of limited period offering of TV channels confined to a particular sporting event is alien. ICP is being offered in the guise of a TV channel even though in reality, it is an event/program based on limited tenure offering;
(iv) A-la-carte offering has the following facets:-
(a) Identity of specific channel;
(b) Standalone individual offering of identified channels;
(c) Specific rate for the standalone channel.
(v) Bouquet offering is an assortment of distinct channels offered together as a Group or as a Bundle. ICP comprises of several channels and is therefore a bouquet and cannot be a-la-carte within a bouquet. Statutory framework also does not permit any hybrid offering;
(vi) Since ICP is a package, which is a part of the bouquet, payment to the broadcaster is also to be made for the entire duration of the package and not limited only to the period when the channel is activated. Consumer pays for the bouquet which includes the ICP package and yet the distributor denies payment to the respondent when its channel is not activated;
(vi) Statutory scheme requires non-discrimination of channel offerings within the genre. Channels in a bouquet cannot have differential terms of offer. Amongst the Sports Channels, only Star Sports channels (channels of the respondent) are activated when the India Cricket matches are played while all other sports channels remain active throughout the validity period of the subscription package;
(vii) While payment to the respondent for offering of Star Sports Channels by Dish TV is due for the entire duration of the Package, in the alternative it is submitted that it cant be for less than three months. This issue stands concluded on account of two successive judgments of this Honble Tribunal as under:
Tata Sky v/s ESPN dated 5.4.2011
Dish TV v/s ESPN dated 10.4.2012
These have attained finality. Dish TV is precluded from collaterally challenging those orders in these proceedings since the issue is no longer res integra. Constructive res-judicata is not relevant since the petitioner is stopped from contending that it was not aware of the decision of this Honble Tribunal in this regard even though it was itself an affected party;
(viii) Dish has enjoyed benefit of an interim order since 23.11.2012 based on its categorical denial that there is no activation or de-activation of Star Sports Channels for 5-10 days linked to an event. It now contends to the contrary. It is therefore liable for restitution;
11. Mr. Vaidyanathan, learned senior counsel appearing for the respondent referred to the definition of bouquet and submitted that the bouquet can comprise of distinct channels and not a specific program. He argued that manner of offering of ICP for the duration of specific event amounts to viewing of a particular program which is not permissible as per the regulations. He further argued that while channel of the broadcaster is subscribed by the distributor of signals, for showing of a particular program the rights of the same have to be procured.
We are, however, unable to agree with this submission. The offer made by the petitioner is not for a particular program but for a limited period. We may note that specific programs are offered on demand basis to the subscriber, and on the subscribers authorizing the same using the remote control, SMS or any other means, the particular program is activated and the subscriber billed for the same. The same mechanism is also followed for services, such as Video on demand. In this case, some movies or video programs are offered on payment basis and charged for when the subscriber authorizes the same. Such kind of offering programs is commonly called œpay per view?. In the ICP pack being offered by the petitioner, the whole channel is offered albeit for a short duration when the Indian cricket team is participating in a cricket match and is certainly different from œpay per view? arrangement.
Clause 3(c) of The Telecommunication (Broadcasting and cable) Services (Fourth) (Addressable Systems) Tariff Order, 2010, defines a-la-carte as follows:
œ3(c). œalacarte? with reference to offering of a TV channel means offering the channel individually on a standalone basis;
We may note that in a-la-carte offering, the subscriber can definitely exercise the choice to receive such channels for a limited duration. Though Mr. Maninder Singh, Ld. Sr. Counsel appearing on behalf of the petitioner would have us believe that the ICP is being offered as a bouquet, in our view, the only thing that ICP pack does is that it facilitates the subscriber to order the channel showing cricket match in which Indian team is participating, in advance, for the duration that this event is taking place. It is definitely not the case that subscriber watches and pays only for a particular program. The activation of a particular channel for the specific period when subscriber wants the same is nothing but a-la-carte mode of offering. We now examine the issue of whether such a-la-carte offering can be combined with a bouquet and if so, what should be the minimum duration.
While interconnect regulations (Telecom, Broadcasting and Cable Service Interconnect Regulations, 2004) make it mandatory on the part of the broadcasters to offer pay channels on a-la-carte basis to the DTH operators, packaging of these channels by the DTH operators for subscriber is left to the DTH operators. As per clause 13.2A.11, the respondent is mandated to offer its channels on a-la-carte basis to the petitioner and while it may offer the same additionally in the form of bouquets, the petitioner may decide packaging of the channels from these bouquets. The clause is as under:
13.2A.11 It shall be mandatory on the part of the broadcasters to offer pay channels on a-la-carte basis to direct to home operators and such offering of channels on a-la-carte basis shall not prevent the broadcaster from offering such pay channels additionally in the form of bouquets:
Provided that no broadcaster shall, directly or indirectly, compel any direct to home operator to offer the entire bouquet or bouquets offered by the broadcaster to such operator in any package or scheme being offered by such direct to home operator to its direct to home subscribers (emphasis supplied).
13.2A.13 Every direct to home operator, who, after the commencement of the Telecommunication (Broadcasting and Cable Services) Interconnection (Fourth Amendment) Regulation, 2007 (9 of 2007), opts for one bouquet or more bouquets (hereafter referred to as the opted bouquet) offered by a broadcaster, may decide the packaging of the channels from such bouquet or bouquets which may be offered by it to its direct to home subscribers (emphasis supplied).:
Provided that in a case where a direct to home operator--
(a) does not offer such opted bouquet as a whole to its direct to home subscribers but offers to such subscribers only certain channels comprised in such opted bouquet ; or
(b) packages the channels comprised in such opted bouquet in a manner resulting in different subscriber base for different channels comprised in such opted bouquet, then, the payment, to the broadcaster for such entire opted bouquet by the direct to home operator, shall be calculated on the basis of the subscriber base for the channel which has the highest subscriber base amongst the channels comprised in that bouquet.?.
A plain reading of the above regulations shows that packaging of the channels is left to the choice of the DTH operators and a mechanism for the payment of these channels to the broadcasters is specified. We are, therefore, convinced that offering of respondents channels in œICP? within the bouquets offered for subscription does not violate the regulations.
12. Mr. Vaidyanathan, learned senior counsel submitted that while the petitioner is providing all other sports channels in the ICP pack on continuous basis, the channels of the respondents are the only ones being discriminated against. In this regard, he referred to the clause relating to delivery and security in Schedule III of the Interconnect Regulations [inserted vide Telecommunication (Broadcasting and Cable Services) Interconnection (Fifth Amendment) Regulations, 2009, this schedule provides for terms and conditions which should compulsorily form part of Reference Interconnect Offers for interconnection for the Direct to Home platform and for other addressable platforms]and submitted that the channels of the respondents cannot not be worse off than the other broadcasters channels within the same genre on the petitioners DTH platform. The relevant clause is as under:
œDelivery and Security : All ____________(name of the Broadcaster) Channels must be delivered by DTH operator to subscribers in a securely encrypted manner and without any alteration.
The uplink specifications, satellite capacity and infrastructure allocated by DTH operator in respect of the broadcast signal of the ____s (name of the Broadcaster) Channels by DTH operator to its subscribers shall be no worse than that of the broadcast signal of any other channel within the same genre on its DTH platform.?
We are unable to agree with the submission of the Ld. Sr. Counsel as the clause in question clearly relates to the quality and security of the channel and not the commercial arrangement on which the same is to be provided. The clause will come into play in case any channel of the respondent was not securely encrypted or the infrastructure allocated by the petitioner to the respondents channel was different resulting in poorer quality of the same. Clearly, this is not the case of the respondent. We are also unable to agree with the contention of the respondent that limited period offering of its channels is tantamount to interruption or alteration of the same. Had some program in the channel been blacked out or the channel interrupted during the period of its subscription by the subscriber it would be a different matter but limited period offering of the same with the consent of the subscriber is not the same thing.
13. We now come to the question of the minimum duration for which the respondents channels may be offered and the method for calculating the subscriber base. As per Clause 5.6 of the respondents RIO, the DTH operator shall sell the services to its subscribers for a minimum period of three months [page 247 of the paper book].
Mr. Maninder Singh, learned senior counsel submitted that the RIO provided by the respondent to the petitioner is ex-facie different from that published by it on its website. He submitted that clause 5.6 of the RIO provided to it specifies that the DTH operators shall sell the services to its subscribers for a minimum period of three months and clause 8.2 specifies reporting requirements with regard to its subscribers as per which some confidential details are asked in the guise of determining the subscriber base. These clauses are not there in the RIO published on the website. He drew our attention to clause 13.3 and more specifically 13.2A.1 and 13.2A.5 and submitted that while the parties may agree on the terms of the agreement by mutual discussion, none of the parties can vary the terms of the RIO unilaterally.
Mr. Saikrishna, however, submitted that their RIO on the website has clause 4.6 which is the same as clause 5.6 of the RIO provided to the petitioner and further clause 7 provides for the reporting requirements. Mr. Saikrishna further referred to clause 6(ii) of the Telecommunication (Broadcasting and Cable) Services (4th) (Addressable System) Tariff Order, 2010 and submitted that the respondent being a service provider can specify the minimum subscription period of three months to the petitioner, which is its subscriber and subscribes to its pay channels on a-la-carte basis. In support of his submission, he referred to the definition of service provider in clause 3(zc) of the Tariff Order and submitted that the broadcaster is also covered under the definition of the service provider. As per him, clause 5.6 is pursuant to the right conferred on the respondent by virtue of clause 6 of the Tariff Order. Mr. Saikrishna further referred to the judgment of the Tribunal in Dish TV India Pvt. Ltd. Vs. ESPN Software India Pvt. Ltd., Gurgaon and ESPN Software India Pvt. Ltd. and Vs. Dish TV India Pvt. Ltd., New Delhi (P. No. 382 (C) of 2011 and P. No. 398 (C) of 2011 delivered on 10.4.2012) and submitted that the issue of minimum period of subscription has already been settled as three months and any attempt to re-open the issue would be barred by the principal of res-judicata.
Clause 5.6 of the RIO sent by the respondent to the petitioner is as under:
œ5.6 The license fee shall be payable in full by DTH Operator to the Company irrespective of the basis of payment by the Subscribers to DTH Operator. The DTH Operator shall sell the Services to its subscribers for a minimum period of three (3) months.?
We may note that Clause 4.6 of the RIO annexed by the respondent with Miscellaneous Application [M.A. 3 of 2014 Annexure-D] is almost same as the clause 5.6 of the RIO sent by the respondent to the petitioner and also contains the stipulation to sell the Service for a minimum period of three months. The clause is as under:
œ4.6 The Monthly License Fee shall be payable in full by Affiliate to the Company irrespective of the basis of payment by the Subscribers to Affiliate.
Affiliate shall sell the Service to its subscribers for a minimum period of three (3) months.?
The TRAI Tariff Order, 2010 clause 6 is under Part III “ Retail Tariff and provides for mandatory offering of pay channels on a-la-carte basis to ordinary subscribers and charges thereof. Sub clauses (1) and (2) of Clause 6 is as under:
œ6. Mandatory offering of pay channels on a-la-carte basis to ordinary subscribers and charges therefor:- (1) Every service provider providing broadcasting services or cable services to its subscribers using an addressable system shall, from the date of coming into force of this Order, offer or cause to offer all pay channels offered by it to its subscribers on a-la-carte basis and shall specify the maximum retail price for each pay channel, as payable by the ordinary subscriber: Provided that in the case of direct to home service, a direct to home operator who is unable to offer all its pay channels to its subscribers on a-la-carte basis on the date of coming into force of this order due to any technical reason, shall offer all its pay channels on a-la-carte basis to its subscribers with effect from a date not later than the 1st day of January, 2011. (2) It shall be open to a service provider, while offering its pay channels on a-la-carte basis and specifying a-la-carte rates for each of them under clause (1), to specify a minimum subscription period, not exceeding three months, for subscribing to a pay channel on a-la-carte basis by a subscriber.?
The definition of the subscriber given in clause 3 (ze) is as under:-
œ(ze) "subscriber" means a person who receives the signals of a service provider at a place indicated by him to the service provider, without further transmitting it to any other person and includes ordinary subscribers and commercial subscribers unless specifically excluded;? (emphasis applied)
From the above definition it is amply clear that the subscribers referred to in clause 6 are the end users and not the distributor of signals and the sub-clause (ii) applies to the distributor of the signals who can specify the minimum subscription period not exceeding three months to their subscribers for a-la-carte channels. We are, therefore, unable to agree with Mr. Saikrishna that this clause gives them a right to prescribe the minimum period of three months in their RIO. We may further note that Part II of the Tariff Order relates to wholesale tariff and clause 4 of the same provides for the manner of offering of pay channels by broadcasters to distributors of TV channels using addressable system and no such minimum period is prescribed therein. The tariffs between the broadcaster and the distributor of signals i.e. the respondent and the petitioner are governed by Part II Wholesale Tariff and not by Part III Retail Tariff, which is for tariffs between the distributor of signals and the subscribers (end users). We, therefore, find that while the petitioner may prescribe a maximum of three months as the minimum period of subscription to its subscribers subscribing to a-la-carte channels, the respondent cannot do so to the petitioner and also cannot ask it to prescribe this minimum period to its subscribers, therefore, clause 5.2 of the RIO offered by the respondent to the petitioner as well as the clause 4.6 referred by Mr. Sai Krishna is not in conformity with the regulations.
With regard to the submission of Mr. Saikrishna regarding three months rule being res-judicata, Mr. Maninder Singh submitted that the respondent has not pleaded res-judicata in its reply and, therefore, cannot raise this during hearing. Mr. Maninder Singh in support of his arguments relied on Alka Gupta Vs. Narender Kumar Gupta (2010) 10 SCC 141.
Let us examine the facts in the case of Dish TV India Pvt. Ltd. Vs. ESPN Software India Pvt. Ltd. (Supra). The petitioner herein had filed the Petition No. 382 (C) of 2011 as it wanted to migrate from Fixed Fee deal for which it had entered into the MoU on or about 12.3.2009 valid for a period of four years. The respondent (same as in the present case) was, however, contesting the right of the petitioner to migrate from the MoU to RIO regime and in turn, had filed Petition No. 398 (C) of 2011 for specific performance/obligation of the same. The legality of the clause pertaining to minimum period, which was earlier specified as one year, was challenged before the Tribunal by another DTH operator in Petition No. 159 (C) of 2010 titled Tata Sky Vs. ESPN. The observation of the Tribunal in Petition No. 382 (C) of 2011 in this regard is as under :-
œ12. Legality and validity of some of the clauses of the said RIO being Clause E (V), (4) and (E) (V) (5) came to be questioned by one of the DTH operators before this Tribunal.
It was marked as Petition No.159 (C)/2010 entitled Tata Sky vs. ESPN Software India Pvt. Ltd. In its judgment dated 5.4.2011, this Tribunal noticed :-
|Clauses of the RIO||Petitioners Objection|
|Clause # (V) (4) “ the current Subscription Fee Plan is an under DTH Operators shall sell the Service to its subscribers for a minimum period of 1 year.||The Respondent cannot compel the Petitioner to sell the service of the subscribers for a Minimum period of 1 year. The subscribers are monthly paying subscribers and they pay for what they watch. Its upto them to take or drop any channels at any time and the Petitioner cannot exercise any control over the same and hence the clause is not acceptable.|
|Clause E(V) (5) “ DTH Operator shall be liable to pay to the Company all amounts due and payable irrespective of whether the ESS Subscribers have actually paid such amounts to him or whether any such ESS Subscribers are active or have been deactivated by DTH Operator.||The said clause is not acceptable to the Petitioner as the Petitioner cannot be held responsible if the subscribers of Respondents channels stop paying the concerned amount and especially when their services are deactivated. The Petitioner will pay according to the licence fee clause as enumerated in the TRAI Regulations. So in this light, this clause is redundant.|
• (xxi) On the merit of the impugned provisions of the RIO, it was urged :-
(i) Clause E (V) (4) wherein a minimum period of one year has been prescribed, a period of three months may be provided;
(ii) in the case of clause E (V) (5) also a similar period may be read;?
When the revised RIO was offered to the petitioner by the respondent on or about 06.7.2001, it was accepted by it by a letter dated 25.7.2001 and subsequently by another letter dated 25.7.2011, the petitioner had informed the respondent that clause V(iv) and clause V(v) were required to be modified in conformity with the TRAI Regulations. According to the petitioner, this letter was issued as it was not aware of the judgment. In the letter, the petitioner had contended as follows :-
œ• ¦Regarding the formality for execution of the agreement, we are also required to state here that each of the term and condition of the RIO published and thereafter revised by ESS, has to be strictly in conformity with the regulations and norms laid down by TRAI and which are required to be mandatorily followed by each of the broadcaster including by ESS. You would appreciate that the TRAI through its norms and tariff has stipulated that no DTH operator would be permitted to charge its subscribers subscription of more than 3 months for any channel being distributed by the DTH operator on ala carte basis if the subscriber chooses to not to avail the signals of such channels. As such, it is not permissible for DTH operators to recover from its subscribers subscription for any channel being distributed on ala carte basis for a period o f more than 3 months when the subscriber chooses to discontinue receiving of signals of Sports channels from the DTH operator. Furthermore, the stipulation of subscription period of minimum 3 months by a DTH operator on its subscribers is permissible only when the channel is being availed by a subscriber from a DTH operator on ala carte basis.?
While hearing the petition in that case, the Tribunal examined the contention of the parties regarding right of the petitioner to migrate to the RIO regime in view of the modified RIO published by the respondent. The petition of Dish TV (present petitioner) was allowed while that of ESPN Software (present respondent) was dismissed. Mr. Maninder Singh submitted that the minimum period of three months might have been acceptable to M/s. Tata Sky The petitioner in Petition No. 159 (C) of 2010 as they may be prescribing this minimum period of subscription to their subscribers but the same was not acceptable to it especially as the stipulation of subscription period of minimum three months by DTH operator on its subscriber is permissible only when the channel is being availed by the subscriber from a DTH operator on a-la-carte basis and since they are offering the same as part of a pack (ICP) along with the bouquet , no minimum period of subscription can be imposed . We feel that the issue cannot be deemed to be closed by the earlier order and needs to be decided on merit.
14. Mr. Vaidyanathan, learned senior counsel and Mr. Saikrishna, learned counsel appearing for the respondent referred to the calculation of license fee as given in Chapter II Schedule III of the regulations and submitted that the same is to be arrived at by adding the number of subscribers on the first and last day of the month in question and dividing the result by two. He further submitted that calculation of the subscribers is on the basis of a calendar month and for this reason offering like ICP is not permissible. As per him, though calculation of the subscriber is based on the principle of average, the petitioner cannot have a methodology of its own to compute the same and the mode of calculation is sacrosanct and implies that its channel(s) will be provided on a continuous basis. It is his contention that if the subscriber joins and leave in between the month, they will never be reflected in the subscribers calculated for license fees.
Mr. Maninder Singh, learned senior counsel appearing for the petitioner submitted that though the subscribers may be joining or leaving in between the month, for the purpose of calculation of the subscriber base such subscribers are projected to the first/last day of the month.
The clause regarding license fee as provided in the regulations is as under:
œLicence Fee : The Monthly Average Subscriber Level is equal to the sum of the number of subscribers on the first and last day of the month in question divided by two.
For the purpose of calculation of the Monthly Licence Fee payable to ____(name of the Broadcaster), Subscriber means, for any calendar month, each Set Top Box, which is availing the Channel(s) of __________(name of the Broadcaster) through the DTH operator.
Though we cannot agree with Mr. Saikrishna that the petitioner is prevented from offering œICP?, which in our view is an innovative package, to its subscribers , we however, agree with the submission that if subscribers, joining or leaving in between the month are not accounted for, it may lead to an undue loss of revenue for the respondent. We partly agree with the submission of Mr. Vaidyanathan that if a-la-carte channels are offered in packages, then the payment to the broadcaster for each of the a-la-carte channel shall be calculated on the basis of subscriber base of the package in which such opted a-la-carte channel has been placed but we do not agree that it should be for the full duration of the package.
Hearing the contentions of the rival parties, we find that interest of justice will be sub-served if it is directed that for any month or part thereof, when the respondents channel is showing cricket matches in which Indian team is participating and the same is activated as part of the ICP, the calculation of subscribers of such a channel shall be based on the total number of subscribers subscribing to all such bouquets that offer œICP? for the whole month irrespective of the fact when the channel is activated or de-activated. Further, the calculation will be on the calendar month basis and if the matches being played on the channel, due to which the channel is activated as part of ICP, spill over to the next calendar month, the subscribers will be counted for both the months. Let us clarify this with an example. Supposing the matches in which Indian cricket team is playing start on 15th of a month and end on 25th of the same month and the channel of the respondent showing these matches is activated as part of the ICP, the total number of subscribers subscribing to the bouquets which contain ICP shall be counted for this channel for one full month. However, if these matches start say on 25th of a month and continue till 7th of the next month and the channel of the respondent showing these matches is activated as part of the ICP, the total number of subscribers subscribing to the bouquets which contain ICP shall be counted for this channel for two full months. Needless to say that it will be in addition to the subscribers of such channel of the respondent who subscribe to it separately on a-la-carte basis.
15. We now come to the question of clause 8.2 of the RIO [page 250 of the paper book]. It is the contention of the petitioner that this clause provides for reporting requirement asking details of its subscribers and is not only different from the RIO published by the respondent on its web site but also not in conformity with the regulations.
Clause 8.2 of the RIO which is contested by the petitioner is as under:
œ8.2 DTH Operator shall provide to the Company complete and accurate opening and closing subscriber monthly reports for the Companys services and the tier and/or package containing Companys services within seven(7) days from the end of each month in the format provided by the company detailing :
(i) The total no subscribers authorized , including their names and addresses and the Subscribed Channels on the first day and the last day of the month subscribed to:
(ii) The total no of subscribers on the network
(iii) The total no of subscribers subscribing to a particular service at any particular date:
(iv) The details of channels opted by subscriber on a-la-carte basis;
(v) The package wise details of the channels in the package;
(vi) The package wise subscriber numbers.
(vii) The aging of the subscriber on the particular channel or package;
(viii) The history of all the above mentioned data for the period of the last 2 years.?
This is different from the clause œ7 REPORTS? in the RIO referred to by Mr. Sai Krishna. The relevant part is in clause 7.2 [Annexure-D of M.A. No 3 of 2014 in petition no 836 ( C ) of 2012]which is as under:
œ7.2 DTH operator shall provide to the Company complete and accurate opening and closing sibsciber mothly reports for the Channels and the tier and/or package containing the Channels within seven (7) days from the end of each month in the format provided by the Company and set out in Schedule D. Such reports shall be system generated only through SMS and CAS and ¦¦¦¦¦¦¦¦¦¦¦..?
As per clause 13.2A.1 of the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations substituted by Notification No. F.3-21/2009-BandCS dated 17th March, 2009, every broadcaster is required to intimate to the DTH operators existing on that date about its interconnect offer containing , inter-alia, the technical and commercial terms and conditions. We agree with the contention of Mr. Maninder Singh that Reference Interconnect Offer cannot be different to different DTH operators and any modification of the same can only be in accordance with clause 13.2A.5 of the regulations. The RIO offered by the respondent to the petitioner can, therefore, not be different from the one published on its website. In this regard, we may note clause 13.2A.6(1) of the regulations, which is as under :-
œ13.2A.6 (1) The Reference Interconnect Offer of a broadcaster referred to in clause 13.2A.1 or 13.2A.3 or 13.2A.5, as the case may be, and intimated to the direct to home operators and published by the broadcaster on its website shall be the basis for all interconnection agreements to be entered into between the broadcaster and direct to home operators:
Provided that the broadcaster may enter, on non discriminatory basis, into agreements with different direct to home operators modifying the Reference Interconnect Offer on such terms and conditions as may be agreed upon between them (emphasis supplied):
Provided further that in case a broadcaster had entered, before the commencement of the Telecommunication (Broadcasting and Cable Services) Interconnection (Sixth Amendment) Regulation, 2010 (4 of 2010), into an agreement with any direct to home operator and publishes, subsequently, its Reference Interconnect Offer (including its modifications) under said regulations, such broadcaster shall, after publication of the said offer, give an option to such direct to home operator to either enter into an agreement in accordance with these regulations or continue with the agreement entered before such commencement till its validity.?
The regulations are very clear that the RIO published by the broadcaster on its website shall be the basis of interconnection agreement entered into between the broadcaster and the DTH operators and any modification in the terms of the same can only be on non-discriminatory basis and as agreed between the parties and therefore the reporting requirements, as specified in clause 8.2, cannot be different from RIO published on its website.
16. Regulation 13.2A Inserted by Notification No. 4-54/2007-BandCS, dated 3rd September,2007. (containing sub regulations 13.2A.1 to 13.2A.13) of the Telecommunication (Broadcasting and Cable Services) Interconnect Regulations, 2004 is with regard to the Reference Interconnect Offers for direct to home service. Sub clause 13.2A.2 makes it mandatory for every Broadcaster to publish a copy of its RIO on its website. There are similar regulations for publishing Reference Interconnect Offers for interconnection with distributors of signals other than DTH operators in respect of both non-addressable as well as addressable systems.
As per regulation 13.3 Substituted by Notification 4-54/2007-BandCS, dated 3rd September, 2007, for clause 13.3 (w.e.f. 1-12-2007). Earlier clause 13.3 was inserted vide Notification No. 6-4/2006-BandCS, dated 4th September, 2006., in case the TRAI is of the opinion that the RIO requires modifications so as to protect the interest of service providers or consumers, or to promote the growth of the broadcasting and cable sectors, or the same has not been prepared in accordance with the provisions of these regulations, it may after giving an opportunity of hearing to the broadcaster require it to modify the same.
Implicit in these regulations is that the RIOs published by the broadcasters have the consent and the approval of the Regulator (TRAI) and these RIOs shall be the basis for interconnect agreements between the Broadcasters and the distributers of signals. The terms and conditions of the RIOs, not only have to be in conformity with the regulations, but also for them to be meaningful and serve their purpose, should be reasonable and representative of the industry norms. However, from the cases coming up before us, it appears otherwise and we find that the parties, either wanting to enter into agreements based on RIOs or migrate from the existing agreements to those based on RIOs, find it difficult to do so because either the terms and conditions prescribed are not in conformity with the regulations or the costs prescribed are not representative of the industry norms but on much higher side. This leads to a situation where parties are forced to negotiate the conditions of the interconnect agreements with the seeking party being at a disadvantage.
We would, therefore, urge the TRAI to have a relook at all such RIOs (which may not be very large in numbers) and if required set up a task force for the purpose so that the same may be done in a time bound manner.
17. In view of our findings in the foregoing paragraphs, we direct as under:
I. The respondent shall not ask the petitioners to sell its services for any minimum period and the clause 5.6 of RIO shall be modified accordingly.
II. Clause 8.2 of the RIO shall be modified to make the reporting requirement in conformity with the RIO published by respondent on its website.
III. The parties shall enter into the agreement based on the modified RIO as above within a period of two weeks.
IV. The number of subscribers of the respondents such channel that is shown as part of ICP shall be calculated on a calendar month basis as all the subscribers subscribing to such bouquets which contain the ICP for all such months or part thereof during which the channel is activated. The calculation shall be as detailed in para 14 of this order.
V. In terms of the Tribunals order dated 10.04.2012 in Petition No.382(c) of 2011, the petitioner was entitled to the restitution of the amount which was paid to the respondent for the months of September 2011 onwards. The parties shall reconcile their accounts by taking the number of subscribers as calculated in accordance with above and para 14 of this order. The respondent, if it so desires, may carry out an audit of the petitioners SMS and the petitioner shall fully cooperate with the respondent for the same. The audit and reconciliation of accounts shall be completed within four weeks and the past accounts settled within four weeks thereafter.
The petition is allowed to the above extent. All the miscellaneous applications as well as M.A. No. 108 of 2013 in petition no. 382(c ) of 2011 is disposed of .
Parties to bear their own costs.
Let a copy of this order be sent to TRAI also.