Media & Entertainment
TRAI Tariff Order and Interconnection Regulations for Broadcasting and Cable Services
The Telecom Regulatory Authority of India (‘TRAI’) has on March 3, 2017, issued two sets of regulations governing, inter alia, the pricing of television channels by broadcasters and distributors, namely the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017 (‘Tariff Order’) and the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 (‘Interconnection Regulations’), which repeal certain related regulations applicable to pricing and addressable systems.
The Tariff Order and the Interconnection Regulations specify the framework for tariffs to be charged by broadcasters and distributors and also govern the arrangements between various service providers engaged in broadcasting services, and inter alia:
(i) provide that broadcasters are required to declare a monthly maximum retail price for a-la-carte channels; (ii) prescribe the amounts distributors may charge for channels as the capacity fee per network; (iii) manner in which charges may be levied by broadcasters and distributors for channel bouquets; and (iv) manner in which discounts and carriage fees may be applied by broadcasters and distributors.
Star India and Vijay Television have filed a writ petition in the Madras High Court (‘Madras HC’) challenging TRAI’s authority to regulate pricing of content on television channels. During the pendency of these proceedings, the Supreme Court (‘SC’) has granted TRAI leave to notify regulations (including the Tariff Order and Interconnection Regulations), while observing that the new cause of action arising from the notification of the regulations may be taken up with the Madras HC.
TRAI Regulations on Standard of Quality of Service and Consumer Protection for Broadcasting and Cable Services
TRAI has issued the Telecommunication (Broadcasting and Cable) Standards of Quality of Services and Consumer Protection (Addressable Systems) Regulations, 2017 (‘QoS Regulations’) on March 3, 2017, which repeals the Direct to Home Broadcasting Services (Standards of Quality and Redressal of Grievances) Regulations 2007, the Standards of Quality of Service (Digital Addressable Cable TV Systems) Regulations, 2012 and the Consumer Complaint Redressal (Digital Addressable Cable TV Systems) Regulations, 2012. The objective of the QoS Regulations is to provide a common framework for quality of service standards across different platforms by inter alia prescribing requirements in connection with mandatory offering of a-la-carte channels and bouquets, maintenance of distributor websites and connection suspension rights for customers.
Diverging John Doe orders in relation to blocking URLs
The Bombay High Court (‘Bombay HC’) recently passed a number of orders dated June 16, 2016, July 1, 2016 and July 22, 2016 that have narrowed down the scope of John Doe orders. The Bombay HC refused to pass orders that would result in wholesale blocking of hundreds of websites that allegedly offered and hosted illicit links to the movies ‘Udta Punjab’, ‘Great Grand Masti’ and ‘Dishoom’. The Bombay HC held that an order to block entire website without demonstrating that the entire website contains infringing material cannot be granted and that specific uniform resource locators (‘URL’) containing infringing material must be identified and established.
On the other hand, in the case of Department of Electronics and Information Technology v. Star India Private Limited, a division bench of the Delhi High Court (‘Delhi HC’), by its judgement dated July 29, 2016, upheld a sweeping John Doe order for blocking 73 websites on the grounds that if only a single URL is blocked, the same website can very easily provide access to the blocked content through another URL.
 Balaji Motion Picture Limited & Anr. v. Bharat Sanchar Nigam Ltd. & 49 Ors., Notice of Motion (L) No. 1783 of 2016 in Suit (L) No. 633 of 2016.
 Balaji Motion Pictures Ltd. & Anr. v. Bharat Sanchar Nigam Ltd. & Ors., Notice of Motion (L) No. 1940 of 2016 in Suit (L) No. 694 of 2016.
 Eros International Media Ltd. and Anr. v. Bharat Sanchar Nigam Limited & Or., Notice of Motion (L) No. 2147 of 2016 in Suit (L) No. 751 of 2016.
 Department of Electronics and Information Technology v. Star India Private Limited, R.P.131/2016 in FAO (OS) 57/2015.
Interconnection Agreements Between Service Providers of Signals
The Telecom Regulatory Authority of India amended the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable television Systems) Regulations, 2012 on January 7, 2016 and March 15, 2016, whereby it is now obligatory for each broadcaster to enter into written interconnection agreements with all multi-system operators for retransmission of its pay channels (including where no subscription fees are payable).
Supreme Court Decision in the Case of Star Sports India Private Limited v. Prasar Bharati and Ors.
On May 27, 2016, SC upheld the order passed by the Delhi High Court against Star Sports India Private Limited (‘Star Sports’), in connection with a dispute relating to the mandatory sharing of feeds for television broadcast of sporting events of national importance on cable or direct-to-home (‘DTH’) networks in India.
Under Section 3 of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007, a content rights owner or holder and a television or radio broadcasting organisation (‘Broadcaster’) are prohibited from carrying live television broadcast of a sporting event of national importance on cable or DTH networks, unless it simultaneously shares the live broadcasting signals, without its advertisements, with Prasar Bharati to enable it to retransmit the same on its terrestrial and DTH network.
In the present case, live feeds being provided by Star Sports to Prasar Bharati contained commercial enhancements such as ‘logos’ and ‘on-screen credits’ (‘Logos’) inserted by the event organiser, i.e., International Cricket Council (‘ICC’). Star Sports argued that the words ‘without its advertisements’ in Section 3, relates to advertisements inserted by the Broadcaster and not by the event organiser, and therefore the Logos inserted were not prohibited under Section 3.
The SC observed that the word ‘its’ under Section 3 relates to all three categories, viz: (i) content rights owner; (ii) contents holder; and (iii) television or radio broadcasting service provider. Accordingly, the SC held that Star India is required to remove all commercial content from the feed, even if such commercial content has been included by ICC and Star Sports does not earn any revenue from such commercial content, before sharing the feed with Prasar Bharati.
Amendment in relation to Cap for Spectrum Holding
The Department of Telecommunications (‘DoT’) has, by way of a circular dated May 30, 2018 amended the guidelines for transfer/merger of various categories of telecommunications service licenses/authorization under unified license on compromises, arrangement and amalgamation of companies dated February 20, 2014.
Pursuant to this amendment, DoT has removed the cap of 50% in a particular spectrum band for access services and increased the cap on the total spectrum holding by an entity to 35% of the total spectrum assigned for access services, from the previous cap of 25%. The revised overall cap also applies to entities resulting from implementation of a scheme of compromise, arrangement or amalgamation and merger of licenses in a service area.
However, the spectrum holding cap for 700 MHz, 800 MHz and 900 MHz bands (‘Sub 1 GHz Bands’) is different. DoT has prescribed that the combined spectrum holding of an entity must not exceed 50% of the total spectrum assigned in the Sub 1 GHz Bands. However, no such limit has been prescribed for individual or combined spectrum holding of an entity above the 1GHZ band.
DoT has also notified an option for telecom licensees to choose higher number of installments for deferred payment liabilities in respect of the award of spectrum in 2012, 2013, 2014, 2015 and 2016. There is no change or modification in the moratorium period for payment of deferred payment liabilities and the instalments already paid.
Instructions for implementing Restrictive Feature for SIMs used only for Machine-to-Machine communication service
DoT released instructions on May 16, 2018 in relation to SIM cards used for Machine-to-Machine (‘M2M’) communication services (‘M2M SIMs’), along with related Know Your Customer instructions for issuing M2M SIMs to entities providing M2M communication services under the bulk category and instructions for Embedded-SIMs.
The entity providing M2M services may require SIMs from a telecom licensee authorized by the DoT for the purpose of providing connectivity for M2M services. The instructions from the DoT clarify that the ownership of all such M2M SIMs must be with the entity providing the M2M services. Further, in case of a sale or transfer of devices having M2M SIMs, the entity providing M2M services will be responsible for (i) intimating the telecom licensee(s) from which the M2M SIMs are obtained of the details of persons to whom such devices are transferred; and (ii) fulfilling the subscriber verification norms. The telecom licensees are also required to regularly update these details in their database.
 Machine to Machine (M2M) Communication Services means services offered through a connected network of objects/devices with identifiers in which Machine to Machine (M2M) communication is possible with predefined back end platform(s) either directly or through some gateway. ‘M2M Communication’ refers to a communication between two or more entities (object/devices/things) based on existing and evolving communication technologies that do not necessarily need any direct human intervention.
Indian Telegraph Right of Way Rules, 2016
The DoT has, by way of a memorandum dated May 22, 2018, extended the benefit of the Indian Telegraph Right of Way Rules, 2016 (‘ROW Rules’) to Infrastructure Providers Category I (‘IP-1’), by clarifying that under clause 2(d) of the ROW Rules, the term “licensee” includes IP-1s authorised to establish and maintain assets such as dark fibres, right of way, duct space and tower for the purpose of granting the same on lease/ rent/ sale basis to the telecom services providers licensed under Section 4 of the Indian Telegraph Act, 1885 on mutually agreed terms and conditions.
The erstwhile ROW Rules did not cover IP-1s within the ambit of ROW Rules. However, the right of way was effectively permitted to IP-1s in their respective registration certificate(s) creating ambiguity. With the aforesaid clarification provided by DoT, this ambiguity has been removed.
Clarification and Amendments regarding Internet Telephony
The DoT issued a clarification on June 19, 2018 stating that internet telephony service is an un-tethered service from the underlying access network and such service can be provided by access service provider to the customer using the internet services provided by other service providers. As a step further on this clarification, DoT has amended the telecom licenses, including the unified license, to incorporate certain provisions in relation to internet telephony service. Some of the salient features of the amendment are:
i. internet telephony calls originated by international out roamers from international locations need to be handed over at international gateway of licensed international long distance operators. The international termination charges must be paid to the terminating access service provider;
ii. the mobile numbering series should be used for providing internet telephony by a licensee. The same number may be allocated for cellular mobile service as well as internet telephony service;
iii. telecom licensees are required to comply with all the interception and monitoring related requirements as specified in the respective licence (as amended from time to time);
iv. IP address assigned to a subscriber for this service must conform to IP addressing scheme of Internet Assigned Numbers Authority; and
v. the licensees providing internet service may facilitate access to emergency number calls using location services. This is not a mandatory requirement presently.
Competition Commission of India Orders Probe Against Star India, Sony Pictures and Indian Broadcasting Foundation
On July 27, 2018, CCI directed the DG to investigate allegations against Star India Pvt. Ltd. (‘Star India’), Sony Pictures Network India Pvt. Ltd. (‘Sony Pictures’) and Indian Broadcasting Foundation (‘IBF’) (collectively, ‘Broadcasters ’) for engaging in unfair business practices with regard to pricing of television channels.
Information was filed by Noida Software Technology Park Ltd. (‘NSTP’), a public limited company, which is a ‘distributor’ of television channels, has been issued a license to establish, install, operate and maintain Head-End In The Sky (‘HITS’) project for digital cable services in India. NSTP alleged collusion between the Broadcasters in determining prices and supply to distributors in contravention of Section 3(3) of the Act. It also alleged (i) price discrimination by Broadcasters in the supply of television content to it in comparison to similarly placed Multi System Operators (‘MSOs’)/distributors/ operators under Section 4 of the Act; and (ii) anti-competitive vertical agreements under Section 3(4) of the Act in the form of ‘refusal to deal.’
CCI rejected allegations under Section 4 of the Act against the Broadcasters, holding that the Act does not envisage the concept of ‘collective dominance.’ Absent credible evidence, CCI found allegations of collusion as being conjecture. CCI specifically held that forming an association or taking a favourable stand by such association before a regulatory authority cannot, in and of itself, be deemed anti-competitive. CCI also noted the lack of evidence re exchange of business sensitive information amongst Broadcasters. On this basis, CCI dismissed allegations of a cartel under Section 3(3) of the Act.
To examine whether the alleged conduct may be scrutinized as a potential vertical anti-competitive arrangement under Section 3(4) of the Act, CCI clarified that the Broadcasters market power would need to be considered in a relevant market. While acknowledging that narrower markets on the basis of genres and regional preferences may exist, CCI identified the relevant market as the “market for broadcasting of television channels in India”.
While noting that the Broadcasters did not hold significant market shares in the identified relevant market, particularly as there existed over 500 channels, CCI nevertheless found that the Broadcasters enjoyed ‘significant market power’ in the relevant market of ‘sports’ and ‘entertainment’ genre in India. Relying on (i) the size and importance of the Broadcasters as compared to their competitors; (ii) commercial advantage over competitors; and (iii) consumer dependence as a result of their extensive channel portfolio in the sports and entertainment genre, CCI was of the preliminary opinion that the Broadcasters had sufficient market power.
Having determined that Broadcasters enjoyed sufficient market power, CCI turned to examining allegations of price discrimination. It was alleged that Broadcasters made disparate payments in the form of ‘carriage fees’ (to carry channels) and ‘placement fee’ (to place channels at prominent positions) to their ‘favoured’ distributors. Allegedly, these fees were often greater than the license fee ordinarily charged to distributors that significantly reduce costs for such ‘favoured’ distributors’ vis-à-vis others. While Broadcasters made channels available on an a-la-carte basis, the terms at which they were offered, including pricing, made the choice between a bouquet of channels and a-la-carte illusory.
Relying on the decision of the Telecom Disputes Settlement and Appellate Tribunal (‘TDSAT’), CCI opined that despite regulatory oversight, Broadcasters had the ability to discriminate amongst distributors. CCI rejected the Broadcasters’ contention that the very offer of channels at rates mentioned in the Reference Interconnect Offer (‘RIO’) (in Interconnect Agreements filed with the Telecom and Regulatory Authority (‘TRAI’)) negates allegations of ‘refusal to deal’. However, referring to observations of the TDSAT and TRAI’s issuance of new regulations to ensure non-discrimination, CCI was of the prima facie opinion that the RIO terms by Broadcasters may well qualify as a mechanism for refusal to deal in contravention of Section 3(4)(d) of the Act.
Finally, responding to the Broadcasters’ challenge of CCI’s jurisdiction to take cognizance of information, CCI held that its powers are in addition to, and not in derogation of, TRAI’s mandate to regulate Broadcasters. CCI also noted that as TDSAT and TRAI have decided the matter fully and recognized that Broadcasters had engaged in the practice of price discrimination/ refusal to deal, nothing precluded it from taking cognizance of this matter.
 M/s Noida Software Technology Private Limited v. M/s Media Pro Prvt. Ltd. & Ors. (Petition No. 295 (C)/ 2014 decided on 07 December 2015
Commencement of TRAI Tariff Order, Interconnection Regulations and Quality of Service Regulations for Broadcasting and Cable Services
As reported in the September 2018 issue of Inter alia, the validity of the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017 (‘Tariff Order’) and the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 (‘Interconnection Regulations’) issued by the TRAI on March 3, 3017 had been upheld by the Madras High Court. Consequently, the Tariff Order, the Interconnection Regulations and the Telecommunication (Broadcasting and Cable) Services Standards of Quality of Service and Consumer Protection (Addressable Systems) Regulations, 2017 came into effect from July 3, 2018. Subsequently, Star India preferred an appeal before the SC against the Madras High Court judgement arguing, inter alia, that the Tariff Order and the Interconnection Regulations regulated the content of the transmission, which was solely within the ambit of the Copyright Act, 1956 and fell outside the jurisdiction of the TRAI. The SC, by its judgment dated October 30, 2018, upheld the jurisdiction of the TRAI to regulate the content of transmission in light of the larger public interest involved and upheld the validity of the Interconnection Regulations and the Tariff Order in their entirety.