On 22nd August a huge gathering of cable operators took place in the city of Rajkot where a very important aspect of Digitisation was discussed at length. Prominent persons present there were Roop Sharma, president, Cable Operators Federation of India, Pramod Pandya, President, Gujarat Cable Operators Association, Dilip Sinh, who hosted the meet, Bharat Bhai, Suresh Trivedi, Bharat Chatpatwala, Dalsukh Bhai, Abdulla Hakani & Ashok Patel (See the picture on top).
Operators showed their anger on the adverse impact of mandatory digitisation regulations that put their business under the control of large MSOs who would decide on their revenue, control their subscribers and even are trying to collect subscriptions from their subscribers directly.
Operators have decided now to approach the Supreme Court to protect their fundamental Right to earn a living. The Writ Petition prepared for the purpose on behalf of Association of cable T.V. Services operators, Ahmedabad which has 2500 members. The petition highlights the infringement of their fundamental rights guaranteed under Articles 14,16, 19(1)(g) and 21 of the Constitution of India to make a living.
The Respondent in the case are the Central Government of India responsible for issuing regulations under the Telecom Regulatory Authority of India Act, 1997 and the Telecom Regulatory Authority of India established under Telecom Regulatory Authority Act 1997.
The Association is approaching the Court under Article 32 of the Constitution challenging the propriety and legality of the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff (First Amendment) Order, 2012 (No. 3 of 2012) dated 30.04.2012 and the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations , 2012 (No. 9 of 2012) dated 30.04.2012, and praying that the said Order and Interconnection Regulations be declared as ultra vires the Constitution being violative of Articles 14,16,19(1) (g) and 21. According to the petition, the following provisions, in particular, which have been introduced in the order, are discriminatory and arbitrary and seeks to eliminate the Local Cable Operators:
Firstly, Clause 4(a) and Clause 4(b) of the Tariff Order that dictates a revenue share arrangement:
In clause 5 of the principal Tariff Order, the following proviso shall be inserted, namely:— " Provided that in case the multi-system operator and the local cable operator fail to arrive at mutual agreement, the charges collected from the subscribers shall be shared in the following manner:-
(a) The charges collected from the subscription of channels of basic service tier, free to air channel and bouquet of free to air channels shall be shared in the ratio of 55:45 between multi-system operator and local cable operator respectively; and
(b) The charges collected from the subscription of channels or bouquet of channels or channels and bouquet of channels other than those specified under clause (a) shall be shared in the ratio of 65:35 between multi-system operator and local cable operator respectively."
Thus, as per Clause 4(a) & (b) of the Tariff Order dated 30.04.2012, the ratio of revenue sharing between the MSO and the LCO has been fixed as 55:45 respectively towards the subscription charges with respect to Free to Air channels and 65:35, with respect to pay channels. This is highly discriminatory and prejudicial to the interests of the Local Cable Operators.
Secondly, Clause (IB) of 6(1) of the Tariff Order
(IB) It shall be open to the subscriber to choose any combination of free to air channels up to one hundred channels, in lieu of the basic service tier offered by the multi-system operator.
Provided that it shall be open to the MSO to specify a minimum monthly subscription, not exceeding One Hundred Rupees (excluding taxes) per subscriber, towards the basic service tier or the Free to Air channels chosen by the subscriber in lieu of the basic service tier.
Thirdly, Clause (ID) of 6(1) of the Tariff Order:
In clause 6 of the principal Tariff Order—
(ID) It shall be open to, the subscriber of the digital addressable 'cable TV to subscribe to basic service tier or basic service tier and one or more pay channel or only free to air channels or only pay channels or pay channels and free to air channels.
Thus, as per Clause 1(D) of 6(1) of the Tariff Order dated 30-04-2102, an option has been given to the subscriber of the Digital Addressable Cable TV to subscribe to basic services tier or basic service tier and one or more pay channels or only free to Air channels or only pay channels or pay channels and free to air channels and thus not making it obligatory on them to take Free to Air channels.
Fourthly, Clause 6(1E) of the Tariff Order:
(IE) If a digital addressable Cable TV subscriber subscribes to the pay channel, in a-la-carte or bouquet or a combination of a-la-carte and bouquet, with or without free to air channels, it shall be open to the multi-system' operator to specify a minimum monthly subscription, not exceeding one hundred and fifty rupees (exclusive of taxes) per month".
The following provisions, in particular, which have been introduced in Chapter IV (Interconnection Agreements) of the Interconnection Regulations, are discriminatory and arbitrary:
(14) The interconnection agreement between the multi system operator and its linked local cable operator shall clearly earmark the responsibility of generation of subscribers’ bill by the multi system operator and the roles and responsibilities of the multi system operator and its linked local cable operator on conformance to the quality of service regulations issued by the Authority from time to time.
(15) It shall be open to a multi system operator to decide the packaging of the channels offered to the subscribers from bouquet of channels provided to it by the broadcaster :
Provided that in case the multi system operator does not offer to a subscriber the entire bouquet of channels provided to it by the broadcaster but only certain channels of such bouquet or packages the channels of such bouquet in a manner resulting in different subscriber base for different channels of such bouquet, the payment to the broadcaster for such bouquet shall be calculated on the basis of the subscriber base for that channel of the bouquet which has highest subscriber base.
Thus, as per the aforesaid clauses of the Tariff Order and the Interconnection Regulations the sole discretion has been given to the MSO to raise invoices directly to the subscribers and fix the rates and to decide on the revenue to be paid to the LCO, hence the same is arbitrary and irrational.
A cumulative and disturbing effect of the above mentioned impugned provisions are that by virtue of the aforesaid Tariff Order and the Interconnection Regulations the business of the Local Cable operators and in particular ownership rights accumulated over a period of time is being taken away and transferred in favour of the Multi System Operators. Not only this but the LCOs under the said provisions will be working under the Multi System Operators as their Revenue collecting Agents while at the same time providing maintenance and services to the subscribers on behalf of the MSO’s at their own cost since the entire cable network has been laid down by them over a number of years.