Calcutta High Court Withholds Stay on Trai New Tariff Order as Cable Operators Oppose the Mandate

Cable Operators in Calcutta HC have alleged that the new Trai mandate has transferred the ownership of customers from cable operators to feed providers

Highlights
  • Trai responded by saying that the revenue distribution is fair and just under the new tariff scheme.
  • The regulator says that cable operators will enjoy just negotiation power with MSOs.

In a new turn of events, Calcutta High Court has said that it will be pondering over the allegations made by the cable operators regarding the new Trai tariff order. The allegations state that the new tariff order passes the ownership of the customers from cable operators to the feed providers. The court will also decide whether it will lift the stay on the implementation of Trai’s new TV channel regulations after it has made sure that the cable operators genuinely have a right along with the means and resources to negotiate with the feed providers. After cable operators made these allegations, the Calcutta High Court came to this conclusion.

Cable Operators Argue Against the Just Nature of Trai Tariff Model

As Ultra News has highlighted, the feed providers were a much later evolution in India, thus meaning that the customers conventionally belonged to the cable operators and not to the feed providers. Feed providers came into the cable distribution scene much later, when thousands of cable operators strung cables from one location to other. The cable operators concluded that instead of each cable operator having a separate ‘head-end’ it would be a much more pragmatic decision to have a centralised facility that collects the TV signal from several dish antennas. The cable operators then decided to borrow the signal from one such player who was solely dedicated to providing signals to these cable operators. Following this, the COs started dismantling their head-ends and began sourcing their signals from “Multi System Operators” (MSOs).

As per the association’s words, the new rule mandates that now the bill will be made in the name of MSOs instead of the cable operators thus indicating that the customers will now be under these MSOs, not the cable operator. Currently, the cable operators have the right to go ahead and sign an agreement with a different MSO or even set up their own head-end. In response to this, Calcutta High Court in its order said, “Referring to Schedule VI [the advocate for the cable operators] points out, the agreement will provide for billing of subscribers to be in the name of Multi System Operators (MSO). MSO will receive payment of subscriptions paid by subscribers. Revenue share per clause 12.1 of the agreement shall be paid by MSO to local cable operator (LCO) on receipt of an invoice from LCO.”

Trai Responds to Allegations Saying New Model is Accurately Balanced

The Telecom Regulatory Authority of India (Trai) which has introduced the new mandate responded to these claims saying that the Schedule VI was just a ‘model agreement’ and that the cable operators were free to sign an agreement with any of the MSOs if they wished to do so. The advocate for the cable operators, however, countered this argument as he said that Trai had made this ‘model agreement’ more favourable for the MSOs.

Adding to his words, the advocate also said that that the new mandate has been drafted in such a way that out of every Rs 100 collected, the feed provider would keep Rs 55, and the cable operator which is the original owner of the network would get to keep Rs 45 only. Citing these numbers, the advocate claimed that the revenue share ratio is also not viable for his clients.

On Wednesday, Trai approached the court urging them to lift the stay on the mandate. However, the court decided to keep a halt on it and added that if it could be convinced that the negotiation power which the cable operators enjoy is real and not imaginary, then the stay will be lifted. Court also said that if the stay is to be lifted then the cable operators should have the power to make a just deal with the MSOs.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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Chinmay
Chinmay

So what is the implication of High Court order? So what will happen to TRAI order which is supposed to be live tomorrow?

Visakh
Visakh

TRAI order won’t come to effect as long as stay is withheld.

Rinu
Rinu

As long as the new TRAI order does not come into effect, we can see any of the pay and free channels at a very low rate.

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