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2018 (10) TMI 1847 - SC - Indian LawsChallenge to certain clauses of the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017notified on 3.3.2017 and the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017 dated 3.3.2017 made under the Telecom Regulatory Authority of India Act, 1997. HELD THAT - In Secretary, Ministry of Information Broadcasting, Govt. of India Ors. v. Cricket Association of Bengal, (1995) 2 SCC 161, this Court referred to the pressing need to create a comprehensive enactment regulating airwaves, being public property. Public interest demanded that service providers be regulated and the usage of the airwaves through frequencies be regulated. A direction was thus issued to the Government of India to formulate a comprehensive enactment after noting the inadequacies that were felt in the Indian Telegraph Act, 1885 - the Government formulated a National Telecom Policy in 1994 and then decided to promulgate an ordinance which led to the enactment of the TRAI Act. Since the Regulation made under Section 36 of the said Act is under challenge, it must first be stressed that a restrictive meaning cannot be given to the words regulation or regulate , as otherwise the very object of the Act would be stultified - under Section 36 of the TRAI Act, the Authority is empowered to carry out the purposes of the said Act as can be discerned from the Preamble to the Act. What is clear from the amended Preamble to the Act is that the interests of service providers and consumers are of paramount importance, both of which have a role to play when regulations are framed under Section 36. It is clear that only a person who is licensed under Section 5 of the Indian Wireless Telegraphy Act can use a teleport from India from which a TV channel is to be uplinked to a satellite. Equally, to be uplinked to a satellite and thereafter downlinked from such satellite to an MSO, permission would be required from the Central Government. This would be clear from a reading of the separate guidelines for uplinking and downlinking channels issued by the Government of India. The provisions of the TRAI Act have to be viewed in the light of protection of the interests of both service providers and consumers. This being so, it is clear that no constricted meaning can be given to the provisions of this Act. It is important to remember that under Section 11(1)(a)(iv), one of the functions of the Authority, though recommendatory, is to facilitate competition and promote efficiency in the operation of telecommunication services (which includes broadcasting services) so as to facilitate growth in such services. What is also clear from Section 11(1)(b), is that terms and conditions of interconnectivity between different service providers have to be fixed, which necessarily includes terms that relate not only to carriage simpliciter as submitted by Dr. Singhvi, but to all terms and conditions of interconnectivity between broadcaster, MSO, Cable TV operator and the ultimate consumer, so as to ensure that the object of the Act is carried out, namely, that both broadcasters and consumers get a fair deal. Towards this end, Section 11(2) makes it clear that the Authority may, from time to time, notify the rates at which telecommunication services, including broadcasting services, within India and outside India, shall be provided under this Act - It is only when TRAI issued a second consultation paper dated 4.5.2016 that Star India submitted its response in June, 2016 where it raised for the first time the issue relating to the Copyright Act as an afterthought. What is important to notice is that even in this response, Star India reiterated that discount caps should be provided for as this checks discriminatory behavior during negotiation and will facilitate designing of discount criteria based on intelligible differentia which will help serve the diverse needs of consumers. In a third response to the draft regulations and tariff order, Star India raised jurisdictional issues of TRAI. The Regulation and the Tariff Order have been made keeping the interests of the stakeholders and the consumers in mind and are intra vires the regulation power contained in Section 36 of the TRAI Act. Consequently, we agree with the conclusion that these writ petitions deserve to be dismissed. If in exercise of its regulatory power under the TRAI Act, TRAI were to impinge upon compensation payable for copyright, the best way in which both statutes can be harmonized is to state that, the TRAI Act, being a statute conceived in public interest, which is to serve the interest of both broadcasters and consumers, must prevail, to the extent of any inconsistency, over the Copyright Act which is an Act which protects the property rights of broadcasters. We are, therefore, of the view that, to the extent royalties/compensation payable to the broadcasters under the Copyright Act are regulated in public interest by TRAI under the TRAI Act, the former shall give way to the latter - Appeal dismissed.
Issues Involved:
1. Whether TRAI has the power to regulate only the 'means of transmission' and not the 'content' of the broadcast. 2. Whether the impugned clauses regulate the content of the broadcast. 3. Whether the impugned clauses affect the pricing and marketing of television channels by the broadcaster, constituting illegal interference. Detailed Analysis: 1. Whether TRAI has the power to regulate only the 'means of transmission' and not the 'content' of the broadcast: The appellants argued that TRAI's jurisdiction is limited to regulating the 'means of transmission' and not the 'content' of broadcasts, which includes channels and their constituent programs. They contended that the TRAI Act, as amended, extended to broadcasting services but only to regulate transmission aspects, not content, which is governed by the Copyright Act, 1957. The appellants emphasized that TRAI cannot interfere with pricing, bundling, or packaging of channels, which are matters of content and intellectual property rights under the Copyright Act. The court analyzed the TRAI Act, highlighting that it aims to protect both service providers and consumers, ensuring fair competition and efficient service provision. The court emphasized that the TRAI Act's regulatory scope includes fixing terms and conditions of interconnectivity, which encompasses more than mere carriage of signals, extending to overall service provision, including pricing. The court concluded that TRAI's regulatory power under Section 36(1) is broad and not restricted by Section 11, allowing it to regulate aspects impacting both broadcasters and consumers. 2. Whether the impugned clauses regulate the content of the broadcast: The appellants listed several clauses they believed impinged on content regulation, such as mandatory a-la-carte offerings, restrictions on bundling free-to-air and pay channels, and limitations on promotional schemes. They argued that these clauses interfere with broadcasters' freedom to package and price their channels, which should be governed by the Copyright Act. The court found that the impugned clauses do not regulate the content of the broadcasts but rather the manner of offering and pricing channels to ensure consumer choice and prevent monopolistic practices. The court noted that TRAI's regulations aim to balance the interests of broadcasters and consumers, ensuring fair pricing and preventing forced bundling of unwanted channels. The court held that these regulations do not interfere with the content itself but with the business practices surrounding the distribution of that content. 3. Whether the impugned clauses affect the pricing and marketing of television channels by the broadcaster, constituting illegal interference: The appellants argued that the clauses directly impact the pricing and marketing strategies of broadcasters, which should be free from regulatory interference. They contended that TRAI's stipulations on maximum retail prices, discount caps, and bundling restrictions overstep its jurisdiction and infringe on broadcasters' rights under the Copyright Act. The court examined the consultation process leading to the regulations, noting that broadcasters, including the appellants, had initially supported several measures now being challenged. The court emphasized that the regulations were designed to prevent anti-consumer practices like excessive bundling discounts, which force consumers to purchase unwanted channels. The court held that TRAI's regulations are within its jurisdiction, aiming to protect consumer interests and ensure fair competition without unlawfully interfering with broadcasters' rights. Conclusion: The court concluded that TRAI's regulations and tariff orders are within its jurisdiction under the TRAI Act, focusing on ensuring fair practices in the broadcasting sector. The regulations do not interfere with the content of broadcasts but address the manner of offering and pricing channels to protect consumer interests. The appeal was dismissed, upholding the validity of TRAI's regulations and tariff orders.
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