Wednesday, 18 June 2014

Broadcasters cannot dictate Minimum Subscription period

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on 25th April has directed the broadcasters not to ask a direct-to-home (DTH) service provider for a minimum subscription period of three months, the tribunal has also requested the Telecom Regulatory Authority of India (TRAI) to relook at such Reference Interconnect Offers (RIOs). 


The TDSAT has given this judgment in the case of Dish TV Vs. ESPN Software India in the Petition No.836(C) of 2012. In the judgment, Tribunal has directed ESPN Software India (now Star Sports India) to modify two clauses in its Reference Interconnect Offer (RIO) agreement with DTH operator Dish TV and to enter into a fresh agreement based on the modified RIO within a period of two weeks.
The tribunal has pointed out that a broadcaster cannot ask a DTH service provider to prescribe a minimum subscription period of three months. A DTH operator, however, may prescribe a maximum of three months as the minimum period of subscription to its subscribers subscribing to a la carte channels. 
The TDSAT has, thus, directed ESPN Software to modify clause 5.6. The tribunal has also asked the sportscaster to modify clause 8.2 to make the reporting requirement in conformity with the RIO published by Dish TV on its website. 
Let us examine the facts in the case of Dish TV India Pvt. Ltd. Vs. ESPN Software India Pvt. Ltd. (Supra). The genesis of the problem is “India Cricket Pack” (ICP) being offered by the Dish TV to its subscribers. The scheme of this pack is that in some of the bouquets of channels being offered by the Dish TV to its subscribers, Sports Channel of the ESPN, 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 “Super 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., “India Cricket Pack” is one of the packs made available with this pack and is offered as follows :- 
“India Cricket Pack is an offering of any of channels showing Indian men’s 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”. 
According to ESPN, though the Dish TV has signed an RIO agreement without prejudice, it has impugned clause 5.6 and clause 8.2. Clause 5.6 of the RIO sent by the ESPN to the Dish TV is as under: 
“5.6 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.”
Clause 8.2 of the RIO which is contested by the Dish TV is as under: 
“8.2 DTH Operator shall provide to the Company complete and accurate opening and closing subscriber monthly reports for the Company’s services and the tier and/or package containing Company’s 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.” 
Background of case
The issues raised by Dish TV in its petition are the terms & conditions of the Reference Interconnect Offer (RIO) offered by the ESPN Software India Pvt Ltd to the Dish TV and their compliance and conformity with applicable Interconnect Regulations and Tariff Order. The Dish TV in this petition, demanded to make the necessary changes/amendments in the 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. 
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 Dish TV is a Direct to Home operator in India providing TV signals to the subscribers. The ESPN Software Pvt Ltd is the sole and exclusive distributor of the following six TV channels, namely ESPN, Star Sports, Star Cricket, ESPN HD, Star Sports HD & Star Cricket HD.
In September, 2011, Dish TV 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 respondent’s channels namely (1) ESPN (2) Star Sports (3) Star Cricket. Dish TV 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 & conditions of the RIO. The Tribunal vide its judgment dated 10.4.2012 allowed the petition of Dish TV 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 above judgment of the Tribunal was challenged by the ESPN Software Pvt Ltd vide Civil Appeal No. 4187 of 2012 before the Hon. Supreme Court.  That was rejected on 17.7.2012. 
On 05.11.2012, the ESPN had 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 ESPN Software Pvt Ltd, the present petition was filed on 20.11.2012. 
Tribunal orders
Telecom Disputes Settlement and Appellate Tribunal (TDSAT) in their findings gave the following order.  
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 respondent’s 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 Tribunal’s 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 petitioner’s 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. 
During MediaPro times cricket channels were distributed by both the parties as a la carte or in a special cricket package not comprising of any other channels. However, after disintegration of MediaPro, both Zee Group and Star Group are offering the sports channels as part of their general bouquet as well taking full advantage of TRAI’s tariff order on aggregators where only one broadcaster group’s channels can be part of bouquet. Forming of MediaPro as JV between these two rivals groups just before the digitalisation started enabled the companies to create large monopolies in the DAS areas forcing all their channels on MSOs. The regulator became a mute spectator of this game and did nothing till many complaints from non-integrated MSOs as well as independent MSOs reached them and cases started filling in the TDSAT. However, its Tariff Order on aggregator came too late after the first two phases of digitalisation were declared completed. By that time enough damage was already done to smaller players, both small broadcasters and small MSOs. Since most of the TRP towns are covered in the first two phases, both Zee and Star hardly find any advantage of the MediaPro JV now their DTH companies Dish TV and Tata Sky will take care of the rest of the country, being mostly semi-urban and rural where large MSOs have a disadvantage.  
Source: http://cablequest.org/articles/item/5169-broadcasters-cannot-dictate-minimum-subscription-period.html
Source: http://cablequest.org/articles/item/5169-broadcasters-cannot-dictate-minimum-subscription-period.html

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