9911796707
TMI Blog2018 (10) TMI 1847X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... , and (iii) can be offered only twice in a year; h. High definition and standard definition channels cannot be in the same bouquet of television channels; i. Pay channels and free to air channels cannot be in the same bouquet. 2. The Division Bench consisting of M. Sundar, J. and Chief Justice Indira Banerjee differed in their conclusions. As per M. Sundar, J., it was held:- "8(a). Owing to the narrative, discussion and all that have been set out supra, those of the impugned provisions in the said regulations and said tariff order which touch upon content of the programmes of broadcasters are liable to be struck down as not in conformity with the parent Act / plenary Act. Therefore, clauses 6(1), second proviso to 6(1), proviso to 7(2), 7(4), first proviso to 7(4) and 10(3) of the said Regulations and clauses 3(1), 3(2)(b), second proviso to 3(2)(b), first proviso to 3(3), second proviso to 3(3), third proviso to 3(3), fourth proviso to 3(3), fifth proviso to 3(3), sixth proviso to 3(3) and 3(4) of the said tariff order are struck down as not in conformity with the parent act, i.e., TRAI Act. 8(b). With regard to the other two impugned provisions, as we were given to under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37 was correctly dealt with. This Court is of the view that the Copyright Act has rightly taken note of being the one which gives succour to the copyright holder as against the licensee, who may also be a BRR holder. It was rightly held that the provisions deal with the protection of the right of the copyright holder. It is rather pertinent to keep in mind the discussion on the Copyright Act, 1957, which is to be seen contextually qua the issue i.e., field being occupied. This Court also does not find anything wrong with the finding given on the so called concession given by the learned counsel for the TRAI being inconsequential, as the very jurisdiction of the Act itself was taken for consideration. The finding has to be seen contextually along with the other issues including the overall stand taken in the counter affidavit of respondents 1 to 4. Similarly the self imposed restrictions while invoking the extraordinary jurisdiction under Article 226 of the Constitution of India, deserves to be concurred with. 27.2. Though a submission has been made on the decision arrived at with respect to the fixation of cap at 15% discount on the MRP of the bouquet and the discounts given und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a situation where direct to home services are provided, instead of the MSO one has persons, like, for example, TATA Sky, who then beam the signal directly to the consumer via satellite. TRAI under the TRAI Act cannot restrict pricing, bundling or packaging done by the broadcaster, as TRAI's functions kick in under the Cable Television Networks (Regulation) Act, 1995 (hereinafter referred to as the "Cable TV Act") only after the signal reaches the Cable TV operator. According to the learned Senior Advocate, at a stage anterior to the Cable TV operator beaming signals to the consumers, the broadcasters' rights are not covered by the TRAI Act, which regulates only carriage, but by the Copyright Act, 1957, which regulates content. Dr. Singhvi took us through the Statement of Objects and Reasons for the TRAI Act, the Preamble thereof, and in particular Sections 2(1)(k), 11 and 36, to contend that this Act is "carriage-centric", and is thus limited to regulation of service in transmission alone and does not extend to or include the subject matter or content of the transmission. The Copyright Act, on the other hand, is "content-centric" and deals with intellectual property rights which b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the MSO of the Cable TV Operator. According to him, in substance, the impugned Regulation and Tariff Order went beyond the jurisdiction of TRAI under the TRAI Act in that they sought to regulate "content" which would mean the original work such as a book, which could then be made into a film and finally broadcast by the appellants. Anything which impinges upon the aforesaid "content" in terms of making, buying, packaging or marketing, including licensing and assignment, would directly be covered by the Copyright Act and would, therefore, be outside the jurisdiction of the TRAI Act. He also strongly relied upon the judgment of this Court in Petroleum and Natural Gas Regulatory Board v. Indraprastha Gas Ltd., (2015) 9 SCC 209, to state that in a parallel fact circumstance, no tariff could be fixed by the Board for the commodity in question, but only for carriage of the said commodity through pipelines. 7. Shri Rakesh Dwivedi, learned Senior Advocate appearing on behalf of TRAI, countered each of these submissions. According to the learned Senior Advocate, a reading of the TRAI Act, together with the Statement of Objects and Reasons, would show that it was an Act conceived in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... content of the matter contained in the television channel that is beamed. As an example, he stated that neither the Regulation nor the Tariff Order interferes with what could be beamed by the broadcaster, but only to the manner of such beaming, keeping the interest of both the broadcaster as well as the ultimate consumer in mind. He also took us through the consultation papers which preceded the draft regulation which was framed, and pointed out that most of what was contained in the impugned Regulation and Tariff Order, was either requested by the broadcasters themselves or suggested by them to safeguard their interests, which TRAI has in principle followed. What is interesting to note is that it was only at a later stage, before the draft regulation was made, that references to content and the Copyright Act were made solely as an afterthought. He also relied upon the Cable TV Act and stated that it was important to note that it was the same regulator, namely, TRAI, who had to regulate the same signal from broadcaster to MSO, MSO to Cable TV operator and Cable TV operator to consumer. It would be extremely anomalous to find that from Cable TV operator onwards regulations such as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of broadcasters and consumers. 9. Shri K.V. Vishwanathan, learned Senior Advocate appearing on behalf of the multi-system operators, placed strong reliance on Regulations 3(1) and 3(2) of the impugned Regulation, which, according to him, have not been challenged by the appellants. These regulations make it clear that the broadcasters have to offer TV channels on a non-discriminatory basis. The only reason why pricing is referred to in the impugned Regulation is to fulfil Regulation 3(2), which is to ensure that the offer made is non-discriminatory and, therefore, the Regulation and the Tariff Order read as a whole would, in fact, not impact content at all but be regulations for carriage of the signals stricto senso. He relied on judgments which held that TRAI's regulatory powers are extremely wide. He also relied upon several provisions of the Copyright Act, including Section 52(1)(b), which made it clear that there would be no infringement of copyright, assuming the arguments of the appellants to be correct, when there is transient or incidental storage of a work or performance purely in the technical process of electronic transmission or communication to the public. 10. Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... private agencies. What is further, the electronic media is the most powerful media both because of its audiovisual impact, and its widest reach covering the section of the society where the print media does not reach. The right to use the airwaves and the content of the programmes therefore, needs regulation for balancing it and as well as to prevent monopoly of information and views relayed, which is a potential danger flowing from the concentration of the right to broadcast/telecast in the hands either of a central agency or of few private affluent broadcasters. That is why the need to have a central agency representative of all sections of the society free from control both of the Government and the dominant influential sections of the society. xxx xxx xxx 120. … Hence every citizen has a right to use the best means available for the purpose. At present, electronic media, viz., T.V. and radio, is the most effective means of communication. … xxx xxx xxx 122. We, therefore, hold as follows: [i] The airwaves or frequencies are a public property. Their use has to be controlled and regulated by a public authority in the interests of the public and to prevent the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountry has stood still, rooted in the Telegraph Act of 1885. Except Section 4(1) and the definition of telegraph, no other provision of the Act is shown to have any relevance to broadcasting media. It is, therefore, imperative that the parliament makes a law placing the broadcasting media in the hands of a public/statutory corporate or the corporations, as the case may be. This is necessary to safeguard the interests of public and the interests of law as also to avoid uncertainty, confusion and consequent litigation." 13. Accordingly, 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. The Statement of Objects and Reasons of this Act stressed: "1. In the context of the National Telecom Policy, 1994, which amongst other things, stresses on achieving the universal service, bringing the quality of telecom services to world standards, provisions of wide range of services to meet the customers demand at reasonable price, and participation of the companies registered in India in the area of basic as well as value added telecom services as also making arrangements for protection and promotio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have an inbuilt dispute settlement mechanism including procedure to be followed in this regard as well as a scheme of punishment in the event of non-compliance of its order. 6. The Authority will have to maintain transparency while exercising its powers and functions. The powers and functions would enable the Authority to perform a role of watchdog for the telecom sector in an effective manner. 7. In order that the Authority functions in a truly independent manner and discharges its assigned responsibilities effectively, it is proposed to vest the Authority with a statutory status. 8. As the Parliament was not in session, the President promulgated the Telecom Regulatory Authority of India Ordinance, 1996 on the 27th January, 1996 for the aforesaid purpose. 9. The Bill seeks to replace the said Ordinance." (Emphasis supplied.) 14. The said Act was amended by Act 2 of 2000, which substituted the Preamble of the TRAI Act thus: "An Act to provide for the establishment of the Telecom Regulatory Authority of India and the Telecom Disputes Settlement and Appellate Tribunal to regulate the telecommunication services, adjudicate disputes, dispose of appeals and to protect the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be used by the service providers after inspection of equipment used in the network; (vii) measures for the development of telecommunication technology and any other matter relatable to telecommunication industry in general; (viii) efficient management of available spectrum; (b) discharge the following functions, namely:- (i) ensure compliance of terms and conditions of licence; (ii) notwithstanding anything contained in the terms and conditions of the licence granted before the commencement of the Telecom Regulatory Authority of India (Amendment) Act, 2000, fix the terms and conditions of inter-connectivity between the service providers; (iii) ensure technical compatibility and effective inter-connection between different service providers; (iv) regulate arrangement amongst service providers of sharing their revenue derived from providing telecommunication services; (v) lay-down the standards of quality of service to be provided by the service providers and ensure the quality of service and conduct the periodical survey of such service provided by the service providers so as to protect interest of the consumers of telecommunication service; (vi) lay-down and ensu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to the Central Government its recommendation after considering the reference made by that Government. After receipt of further recommendation if any, the Central Government shall take a final decision. (2) Notwithstanding anything contained in the Indian Telegraph Act, 1885 (13 of 1885), the Authority may, from time to time, by order, notify in the Official Gazette the rates at which the telecommunication services within India and outside India shall be provided under this Act including the rates at which messages shall be transmitted to any country outside India: Provided that the Authority may notify different rates for different persons or class of persons for similar telecommunication services and where different rates are fixed as aforesaid the Authority shall record the reasons therefor. (3) While discharging its functions under subsection (1), or sub-section (2) the Authority shall not act against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality. (4) The Authority shall ensure transparency while exercising its powers and discharging its functions. xxx xxx x ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Without prejudice to the provisions contained in clause (a) of sub-section (1) of section 11 of the Act, to make recommendation regarding - (a) the terms and conditions on which the 'addressable systems' shall be provided to customers. Explanation - For the purposes of this clause, 'addressable system' with its grammatical variation, means an electronic device or more than one electronic devices put in an integrated system through which signals of cable television network can be sent in encrypted or unencrypted form, which can be decoded by the device or devices at the premises of the subscriber within the limits of authorisation made, on the choice and request of such subscriber, by the cable operator for that purpose to the subscriber. (b) the parameters for regulating maximum time for advertisements in pay channels as well as other channels. (2) Without prejudice to the provisions of subsection (2) of section 11 of the Act, also to specify standard norms for, and periodicity of, revision of rates of pay channels, including interim measures. [Notification No. 39 issued by Ministry of Communication and Information Technology, dated 9 January 2004, S.O. No. 45(E) issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscount shall not be considered a pre-condition. (4) No broadcaster shall propose, stipulate or demand for, directly or indirectly, packaging of the channel in any particular bouquet offered by the distributor of television channels to subscribers. (5) No broadcaster shall propose, stipulate or demand for, directly or indirectly, guarantee of a minimum subscriber base or a minimum subscription percentage for its channel or bouquet. Explanation: For removal of doubt, it is clarified that the subscription percentage of a channel or bouquet refers to the percentage of subscribers subscribing to a specific channel or bouquet out of average active subscriber base of a distributor. xxx xxx xxx 6. Compulsory offering of channels on a-la-carte basis. - (1) Every broadcaster shall offer all its television channels on a-la-carte basis to the distributors of television channels: Provided that the broadcaster may also offer its pay channels, in addition to offering of pay channels on a-la-carte basis, in form of bouquet: Provided further that such bouquet shall not contain- (a) any 'free-to-air channel'; and (b) High definition (HD) and Standard Definition (SD) variants of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay channel or bouquet of pay channels, as the case may be: Provided further that offer of discounts, if any, to distributors of television channels, shall be on the basis of fair, transparent and non-discriminatory terms: Provided also that the parameters of discounts shall be measurable and computable. (5) Every broadcaster of pay channel shall mention in its reference interconnection offer the names of persons, telephone numbers, and e-mail addresses designated to receive request for receiving interconnection from distributors of television channels and grievance redressal thereof. (6) The terms and conditions mentioned in the reference interconnection offer shall include all necessary and sufficient provisions, which make it a complete interconnection agreement on signing by other party, for distribution of television channels. (7) The Authority, suo-motu or otherwise, may examine the reference interconnection offer submitted by a broadcaster and on examination if the Authority is of the opinion that the reference interconnection offer is not in conformance with the provisions of the regulations and the tariff orders notified by the Authority, it may, after giving an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (b) of this sub-regulation are located. (2) It shall be permissible to the multi-system operator to distribute the channels beyond the areas agreed under sub-regulation (1), by giving a written notice to the broadcaster, after thirty days from the date of receipt of such written notice by the broadcaster and the said notice shall deemed to be an addendum to the existing interconnection agreement: Provided that such areas fall within- (a) the registered area of operation of the multi-system operator; and (b) the states or union territories in which the multi-system operator has been permitted to distribute the signals of television channels under the interconnection agreement. (3) Nothing contained in sub-regulation (2) shall apply if written objections with reasons from the broadcaster have been received by the multisystem operator during the said thirty days notice period: Provided that any objection by the broadcaster, which is unreasonable, shall be deemed to constitute a denial of provisioning of signals beyond the areas agreed under the clause (b) of sub-regulation (1)." 18. The relevant clauses of the Tariff Order with which we are directly concerned are set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time: Provided further that the frequency of any such scheme by the broadcaster shall not exceed twice in a calendar year: Provided further that the price(s) of a-la-carte pay channel(s) offered under any such promotional scheme shall be considered as maximum retail price(s) during the period of such promotional scheme: Provided also that the provisions of Regulations and Tariff Orders notified by the Authority shall be applicable on the price(s) of a-la-carte pay channel(s) offered under any such promotional scheme. (5) Every broadcaster, before making any change in the nature of a channel or in the maximum retail price of a pay channel or in the maximum retail price of a bouquet of pay channels or in the composition of a bouquet of pay channels, as the case may be, shall follow the provisions of all the applicable Regulations and Orders notified by the Authority, including but not limited to the publication of Reference Interconnection Offer. 4. Declaration of network capacity fee and manner of offering of channels by distributors of television channels.--- (1) Every distributor of television channels shall declare network capacity fee, per month, payable by a subscri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and declare distributor retail price(s) , per month, of such bouquet(s) payable by a subscriber: Provided that such bouquet shall not contain any pay channel for which maximum retail price per month declared by the broadcaster is more than rupees nineteen: Provided further that the distributor retail price per month of such bouquet of pay channels shall not be less than eighty five percent of the sum of distributor retail prices per month of a-la-carte pay channels and bouquet(s) of pay channels forming part of that bouquet: Provided further that the distributor retail price per month of a bouquet of pay channels offered by a distributor of television channels shall, in no case, exceed the sum of maximum retail prices per month of a-la-carte pay channels and bouquet(s) of pay channels, declared by broadcasters, forming part of that bouquet: Provided further that such bouquet shall not contain any free-to-air channel: Provided also that such bouquet shall not contain both HD and SD variants of the same channel. Explanation: For the removal of doubt it is hereby clarified that a distributor of television channels while forming bouquet under this clause shall not break a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adcaster under Copyright Act. 3. Proviso to 7(2) - Bundling of third party channels prohibited. Impinges upon broadcaster's ability to package a TV channel. No such restriction on broadcaster under Copyright Act. 4. 7(4) - Broadcaster can offer discounts to distributor not exceeding 15% of MRP. Directly regulates the pricing of a TV channel, thereby also regulating pricing of individual programmes. 5. First proviso to 7(4) - Sum of discount under 7(4) and distribution fee under 7(3) shall not exceed 35% of MRP. Directly regulates the pricing of a TV channel, thereby also regulating pricing of individual programmes. 6. 10(3) r/w 6(1) - Mandatory to enter into agreement with DPO on an a-la-carte basis for pay channels. Impinges upon broadcaster's freedom to offer pay channels only as a part of bouquet and not as a-la-carte. No such restriction on broadcaster under Copyright Act. 7. 11(2) - Deemed extension of geographical territory. Directly impinges the broadcaster's right under 19(2) to designate the geographical territory of exploitation. Provisions of the Tariff Order which regulate content Sl. No. Provision Ground 1. 3(1) - All channels to be o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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. In Deepak Theater v. State of Punjab, 1992 Supp (1) SCC 684, a case which related to the Punjab Cinemas (Regulation) Act, 1952 and Rules, this Court referred to the power of licensing and regulation under the said Act as follows: "5. Witnessing a motion picture has become an amusement to every person; a reliever to the weary and fatigued; a reveller to the pleasure seeker; an imparter of education and enlightenment enlivening to news and current events; disseminator of scientific knowledge; perpetuator of cultural and spiritual heritage, to the teeming illiterate majority of population. Thus, cinemas have become tools to promote welfare of the people to secure and protect as effectively as it may a social order as per directives of the State policy enjoined under Article 38 of the Constitution. Mass media, through motion picture has thus become the vehicle of coverage to disseminate cultural heritage, knowledge, etc. The passage of time made manifest t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The word 'regulation' cannot have any rigid or inflexible meaning as to exclude 'prohibition'. The word 'regulate' is difficult to define as having any precise meaning. It is a word of broad import, having a broad meaning, and is very comprehensive in scope. There is a diversity of opinion as to its meaning and its application to a particular state of facts, some courts giving to the term a somewhat restricted, and others giving to it a liberal, construction. The different shades of meaning are brought out in Corpus Juris Secundum, Vol. 76 at p. 611: '"Regulate" is variously defined as meaning to adjust; to adjust, order, or govern by rule, method, or established mode; to adjust or control by rule, method, or established mode, or governing principles or laws; to govern; to govern by rule; to govern by, or subject to, certain rules or restrictions; to govern or direct according to rule; to control, govern, or direct by rule or regulations. "Regulate" is also defined as meaning to direct; to direct by rule or restriction; to direct or manage according to certain standards, laws, or rules; to rule; to conduct; to fix or establish; to restrain; to restrict.' (See also Webster' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment in U.P. Coop. Cane Unions Federations v. West U.P. Sugar Mills Assn. [(2004) 5 SCC 430] In that case, the Court interpreted the word "regulation" appearing in the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 and observed: (SCC pp. 454-55, para 20) "20. … 'Regulate' means to control or to adjust by rule or to subject to governing principles. It is a word of broad impact having wide meaning comprehending all facets not only specifically enumerated in the Act, but also embraces within its fold the powers incidental to the regulation envisaged in good faith and its meaning has to be ascertained in the context in which it has been used and the purpose of the statute." 88. It is thus evident that the term "regulate" is elastic enough to include the power to issue directions or to make regulations and the mere fact that the expression "as may be provided in the regulations" appearing in clauses (vii) and (viii) of Section 11(1)(b) has not been used in other clauses of that sub-section does not mean that the regulations cannot be framed under Section 36(1) on the subjects specified in sub-clauses (i) to (vi) of Section 11(1)(b). In fact, by framing regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nconsistent with Section 11 of the Act. However, what has also to be seen is whether the said Regulation carries out the purpose of the Act which, as has been pointed out hereinabove, under the amended Preamble to the Act, is to protect the interests of service providers as well as consumers of the telecom sector so as to promote and ensure orderly growth of the telecom sector. Under Section 36, not only does the Authority have to make regulations consistent with the Act and the Rules made thereunder, but it also has to carry out the purposes of the Act, as can be discerned from the Preamble to the Act. If, far from carrying out the purposes of the Act, a regulation is made contrary to such purposes, such regulation cannot be said to be consistent with the Act, for it must be consistent with both the letter of the Act and the purposes for which the Act has been enacted. In attempting to protect the interest of the consumer of the telecom sector at the cost of the interest of a service provider who complies with the leeway of an average of 2% of call drops per month given to it by another Regulation, framed under Section 11(1)(b)(v), the balance that is sought to be achieved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s amended in 2004 to include Section 3(1AA). The relevant sections of this Act are set out hereinbelow: "3.(1AA) "telegraph" means any appliance, instrument, material or apparatus used or capable of use for transmission or reception of signs, signals, writing, images, and sounds or intelligence of any nature by wire, visual or other electro magnetic emissions, Radio waves or Hertzian waves, galvanic, electric or magnetic means; Explanation.- "Radio waves" or "Hertzian waves" means electro magnetic waves of frequencies lower than 3,000 giga-cycles per second propagated in space without artificial guide. xxx xxx xxx 4. Exclusive privilege in respect of telegraphs, and power to grant licences.- (1) Within India, the Central Government shall have the exclusive privilege of establishing, maintaining and working telegraphs: Provided that the Central Government may grant a license, on such conditions and in consideration of such payments as it thinks fit, to any person to establish, maintain, or work a telegraph within any part of India: Provided further that the Central Government may, by rules made under this Act and published in the Official Gazette, permit, subject to such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 28. So far as the uplinking guidelines are concerned, on 5.12.2011, the Ministry of Information and Broadcasting (Broadcasting Wing) set out detailed conditions by which the uplinking of TV channels may be made. Under Clause 5.9 of the said guidelines, the Government of India shall have the right to suspend the permission of a company for a specified period in the public interest, or in the interest of national security, to prevent misuse. 29. Similarly, insofar as the policy guidelines for downlinking of TV channels is concerned, the Ministry has given detailed guidelines of the same date, i.e., 5.12.2011. Among other things, it is stated:- "2.4. No News and Current Affairs channel shall be permitted to be downlinked if it does not meet the following additional conditions: 2.4.1. That it does not carry any advertisements aimed at Indian viewers; 2.4.2. That it is not designed specifically for Indian audiences; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified period in public interest or in the interest of National security to prevent the misuse of the channel. The company shall immediately comply with any direction issued in this regard. 5.9. The applicant company seeking permission to downlink a channel shall operationalise the channels within one year from the date of the permission being granted by the Ministry of Information and Broadcasting failing which the permission will liable to be withdrawn without any notice in this regard. However, the company shall be afforded a reasonable opportunity of being heard before such a withdrawal. 5.10. The company/channel shall adhere to the norms, rules and regulations prescribed by any regulatory authority set up to regulate and monitor the Broadcast Services in the country, 5.11. The applicant company shall give intimation to Ministry of Information and Broadcasting regarding change in the directorship, key executives or foreign direct investment in the company, within 15 days of such a change taking place. It shall also obtain security clearance for such changes in its directors and key executives. 5.12. The applicant company shall keep a record of programmes downlinked f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued that the literal language of this sub-section, which would undoubtedly bring in rates laid down in the Tariff Order, would have to be constricted by the language of the last part of the provision, viz., "including the rates at which messages shall be transmitted to any country outside India". We are afraid that this is against basic canons of construction, as the expression "including" would only refer to a part of what precedes the expression and cannot therefore constrict the part that has gone before. The plain literal language of Section 11(2) makes it clear that rates at which broadcasting services are offered within and outside India can be fixed by TRAI. It is clear therefore that when rates are fixed after several rounds of consultations between various service providers and consumers, looking to the interest of each, it is impossible to say that any broadcaster's rights have been impinged upon. Shri Dwivedi is absolutely right in saying that at no stage is content of a TV channel sought to be regulated, and that pricing relating to TV channels laid down in the Regulation and Tariff Order is a balancing act between the rights of broadcasters and the interests of consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord the reasons therefor. xxx xxx xxx 55. TRAI exercises a broad jurisdiction. Its jurisdiction is not only to fix tariff but also laying down terms and conditions for providing services. Prima facie, it can fix norms and the mode and manner in which a consumer would get the services. 56. The role of a regulator may be varied. A regulation may provide for cost, supply of service on non-discriminatory basis, the mode and manner of supply making provisions for fair competition providing for a level playing field, protection of consumers' interest, prevention of monopoly. The services to be provided for through the cable operators are also recognised. While making the regulations, several factors are, thus required to be taken into account. The interest of one of the players in the field would not be taken into consideration throwing the interest of others to the wind." (Emphasis supplied.) 34. It is interesting to note, as has been stated by Shri Dwivedi, that in Star India's response to the consultative paper of 29.1.2016, Star India itself has requested that the Regulation and Tariff Order be fixed on the basis of the principles that are now contained therein. For exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of parameters that a single broadcaster may want to drive basis various business requirements • 33% discount will be sufficient to effectively drive only a few business requirements • Any discounting cap lower than 33% will render the discounting structure ineffective/unworkable." Similarly, so far as high definition channels are concerned, Star India had this to say: "1. HD channels offer a viewer experience that is distinctly different from SD channels - The production, transmission and re-transmission of HD channels entail substantial investments. - HD channels offer distinctly superior audio and video quality to the viewers through cutting edge technology used right from shooting of content, production, post-production, transmission & re-transmission. For detailed explanation refer to Annexure B. - The consumption of HD channel requires significant investment by the consumer in an HD TV and HD set-top box. As such, these channels are aspirational and for affluent audiences who demand better content & quality offering and have the capacity to pay for it. 2. Price forbearance for HD channels should continue - HD channel can be subscribed by only thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and bundling them with Pay channels leads to price distortions by bloating the bouquet size and price, which is not in consumer interest. ▪ Creating separate pay bouquets will ensure consumers are provided true visibility of pay channel pricing." 35. 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. 36. Pursuant to these and other inputs, TRAI has in its explanatory memorandum given reasons for the Tariff Order as follows:- "64. The Authority has noted that at present the uptake of channels on a-la-carte basis is negligible as compared to the bouquet subscriptions. Analysis yields ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of pay channels. In order to ensure that prices of the a-la-carte channels are kept reasonable, the maximum discount permissible in formation of a bouquet has been linked with the sum of the a-lacarte prices of the of pay channels forming that bouquet. A broadcaster can offer a maximum discount of 15% while offering its bouquet of channels over the sum of MRP of all the pay channels in that bouquet so as to enable customer choice through a-la-carte offering and also prevent skewed a-la-carte and bouquet pricing (refer example 1). The bouquet(s) offered by the broadcasters to subscribers shall be provided by the distributors of television channels to the subscribers without any alteration in composition of the bouquet(s). In case a broadcaster feels that more discount can be provided in formation of the bouquet, it indirectly means that a-la-carte prices at the first stage has been kept high and there is a need to revise such a-la-carte prices downwardly. Full flexibility has been given to broadcasters to declare price of their pay channels on a-la-carte basis to correct such situations, if it may come. 66. Some stakeholders are of the opinion that limiting the discount to subscri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 30 30 Total price of 35 a-la-carte pay channels 80 80 80 80 80 Price of bouquet of 35 pay channels (with discount on sum of a-la-carte prices) 20 32 44 56 68 The above table clearly indicates that in case the amount of discount offered by the broadcaster, over the sum of a-la-carte prices of pay channels, while forming the bouquet of those pay channels is very high (75%), the price of bouquet becomes much lower than the sum of a-la-carte prices to the extent that it is almost equal to a-la-carte price of one driver channel. Such amount of discount is anti customer/subscriber as it discourages a-la-carte selection of channels. As the amount of discount on formation of bouquet decreases, the difference between the prices of bouquet and the sum of a-lacarte prices also decreases. In case the amount of discount is fixed at 15%, the price of bouquet becomes higher than the sum of a-la-carte prices of driver channels; thereby encouraging a subscriber to choose a-la-carte channels of his choice. 67. In the present regulatory framework incidences have come to the knowledge where discount upto 90% on the declared RIO prices has been given by broadcasters. Obviously such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnel having MRP of more than ₹ 19/- cannot become part of any bouquet. The amount of ₹ 19/- has been prescribed keeping in view the prevailing highest genre wise ceilings of ₹ 15.12 for all addressable systems between broadcaster & DPOs at wholesale level and further enhancing it 1.25 times to account for DPOs distribution fee. Broadcasters also have complete freedom to price their pay channels which do not form part of any bouquet and offered only on a-la-carte basis. Similar conditions will also be applicable to DPOs for formation of the bouquets. However, the Authority will keep a watch on the developments in the market and may review the manner in which a channel can be provided as part of a bouquet, in a time period of about two years." (Emphasis supplied.) 37. It can thus be seen that both the Regulation as well as the Tariff Order have been the subject matter of extensive discussions between TRAI, all stake holders and consumers, pursuant to which most of the suggestions given by the broadcasters themselves have been accepted and incorporated into the Regulation and the Tariff Order. The Explanatory Memorandum shows that the focus of the Authority has alw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion of the learned Chief Justice and the third learned Judge of the Madras High Court that these writ petitions deserve to be dismissed. 38. Since submissions have been made by Dr. Singhvi on the reach of various other Acts, it is a little important to deal with the same. 39. Dr. Singhvi relied heavily upon the Sports Act. The Statement of Objects and Reasons of this Act makes it clear that the distribution of broadcasting signals of sporting events of public interest is not disseminated to persons who do not have access to satellite and Cable TV, most of whom are in rural areas. Since the downlinking and uplinking policy guidelines of the Government have been challenged in courts as lacking statutory sanction, it has become necessary that sporting events of national importance reach the general public on a free to air basis. It is for this reason that the definitions of "broadcaster", "broadcasting", etc. refer to content. The following are certain relevant terms as defined under the Sports Act: "2.(1)(a) "broadcaster" means any person who provides a content broadcasting service and includes a broadcasting network service provider when he manages and operates his own t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of any of the following: (i) terrestrial television service, (ii) terrestrial radio service, (iii) satellite television service, (iv) satellite radio service, (v) cable television channel service, (vi) community radio service, (vii) any other content broadcasting services as may be prescribed by the Central Government." The heart of the Sports Act is contained in Sections 3 and 5 thereof, which state as follows:- "3. Mandatory sharing of certain sports broadcasting signals.- (1) No content rights owner or holder and no television or radio broadcasting service provider shall carry a live television broadcast on any cable or Direct-to-Home network or radio commentary broadcast in India of sporting events of national importance, unless it simultaneously shares the live broadcasting signal, without its advertisements, with the Prasar Bharati to enable them to re-transmit the same on its terrestrial networks and Direct-to-Home networks in such manner and on such terms and conditions as may be specified. (2) The terms and conditions under sub-section (1) shall also provide that the advertisement revenue sharing between the content rights owner or holder and the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l generation, control and distribution equipment, designed to provide cable service for reception by multiple subscribers; xxx xxx xxx 4-A. (3) If the Central Government is satisfied that it is necessary in the public interest so to do, and if not otherwise specified by the Authority, it may direct the Authority to specify, by notification in the Official Gazette, one or more free-to-air channels to be included in the package of channels forming basic service tier and any one or more such channels may be specified, in the notification, genre-wise for providing a programme mix of entertainment, information, education and such other programmes and fix the tariff for basic service tier which shall be offered by the cable operators to the consumers and the consumer shall have the option to subscribe to any such tier: Provided that the cable operator shall also offer the channels in the basic service tier on a la carte basis to the subscriber at a tariff specified under this subsection. (4) The Central Government or the Authority may specify in the notification referred to in sub-section (3), the number of free-to-air channels to be included in the package of channels forming basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each billing period. xxx xxx xxx 5. Programme code.-No person shall transmit or re-transmit through a cable service any programme unless such programme is in conformity with the prescribed programme code: [***]" 42. He then referred to Rule 6 of the Cable Television Networks Rules, 1994, as follows:- "6. Programme Code. - (1) No programme should be carried in the cable service which:- (a) Offends against good taste or decency: (b) Contains criticism of friendly countries; (c) Contains attack on religions or communities or visuals or words contemptuous of religious groups or which promote communal attitudes; (d) Contains anything obscene, defamatory, deliberate, false and suggestive innuendos and half truths; (e) Is likely to encourage or incite violence or contains anything against maintenance of law and order or which promote-anti-national attitudes; (f) Contains anything amounting to contempt of court; (g) Contains aspersions against the integrity of the President and Judiciary; (h) Contains anything affecting the integrity of the Nation; (i) Criticises, maligns or slanders any individual in person or certain groups, segments of social, public and mora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registration has been granted or refused, whichever is earlier PROVIDED further that channels uplinking from India, in accordance permission for uplinking granted before 2nd December, 2005, shall be treated as registered television channels and can be carried or included in the cable service." 43. The argument of Dr. Singhvi is that since this Act regulates content downstream from the Cable TV operator to the consumer, its absence in the TRAI Act is eloquent testimony to the fact that content cannot be the subject matter of the TRAI Act. As has been held by us hereinabove, the same answer must obtain, namely, that this Act is also irrelevant in the present case as the TRAI Act does not, as has been held by us above, regulate the content of the TV channels that are broadcasted by the broadcaster. 44. The main thrust of the arguments of both Dr. Singhvi and Mr. Chidambaram were also by copious reference to the Copyright Act, 1957, which, according to them, showed that once the Copyright Act steps in, TRAI must necessarily step out. They referred to certain provisions of this Act stage-wise. The Copyright Act, 1957 as originally enacted stated in its Objects and Reasons that: "it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction right in any programme as they apply in relation to the copyright in a work : xxx xxx xxx" 47. Sections 18 and 19 of the Copyright Act deal with assignment of copyright and royalty or other consideration payable to the owner for such assignment. Section 30 of the Copyright Act refers to the right to licence any interest in copyright by the author or his duly authorised agent. 48. By the 1983 amendment to the Copyright Act, Section 2(v) defining radio-diffusion was deleted and instead Section 2(dd) was inserted defining "broadcast" as follows: "2(dd). "broadcast" means communication to the public - (i) By means of wireless diffusion, whether in any one or more of the forms or signs, sounds or visual images; or (ii) By wire, and includes re-broadcast." 49. Section 2(ff) was also inserted, defining "communication to the public" as follows: "2(ff) "communication to the public" means communication to the public in whatever manner, including communication through satellite." 50. Consequently, Section 37 was also amended so as to replace the expression "radio-diffusion" with the expression "broadcast". 51. In 1994, consequent to treaty obligations imposed upon Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction right'' in respect of its broadcasts. (2) The broadcast reproduction right shall subsist until twenty-five years from the beginning of the calendar year next following the year in which the broadcast is made. (3) During the continuance of a broadcast reproduction right in relation to any broadcast, any person who without the licence of the owner of the right does any of the following acts of the broadcast or any substantial part thereof, - (a) re-broadcasts the broadcast; or (b) causes the broadcast to be heard or seen by the public on payment of any charges; or (c) makes any sound recording or visual recording of the broadcast; or (d) makes any reproduction of such sound recording or visual recording where such initial recording was done without licence or, where it was licensed, for any purpose not envisaged by such licence; or (e) sells or hires to the public, or offers for such sale or hire, any such sound recording or visual recording referred to in clause (c) or clause (d), shall, subject to the provisions of section 39, be deemed to have infringed the broadcast reproduction right." 54. Section 38 was substituted with a new Section 39A as follows: "39A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicants, register such association of persons as a copyright society subject to such conditions as may be prescribed: Provided that the Central Government shall not ordinarily register more than one copyright society to do business in respect of the same class of works. (3-A) The registration granted to a copyright society under sub-section (3) shall be for a period of five years and may be renewed from time to time before the end of every five years on a request in the prescribed form and the Central Government may renew the registration after considering the report of Registrar of Copyrights on the working of the copyright society under Section 36: Provided that the renewal of the registration of a copyright society shall be subject to the continued collective control of the copyright society being shared with the authors of works in their capacity as owners of copyright or of the right to receive royalty: Provided further that every copyright society already registered before the coming into force of the Copyright (Amendment) Act, 2012 shall get itself registered under this Chapter within a period of one year from the date of commencement of the Copyright (Amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fair dealing, of excerpts of a performance or of a broadcast in the reporting of current events or for bona fide review, teaching or research; or (c) such other acts, with any necessary adaptations and modifications, which do not constitute infringement of copyright under Section 52." 57. The 2012 amendment to the Copyright Act was relied upon and placed with great emphasis by learned counsel appearing on behalf of the appellants. The Statement of Objects and Reasons of this amendment Act stated as follows : "The Copyright Act, 1957 was enacted to amend and consolidate the law relating to copyrights in India. To meet with the national and international requirements and to keep the law updated, the Act has been amended five times since then, once each in the years 1983, 1984, 1992, 1994 and 1999. The 1994 amendment was a major one which harmonized the provisions of the Act with the Rome Convention, 1961 by providing protection to the rights of performers, producers of phonographs and broadcasting organizations. It also introduced the concept of registration of Copyright Societies for collective management of the rights in each category of copyrighted works. The last amendment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommunication to the public" was replaced as follows:- "2(ff) "communication to the public" means making any work or performance available for being seen or heard or otherwise enjoyed by the public directly or by any means of display or diffusion other than by issuing physical copies of it, whether simultaneously or at places and times chosen individually, regardless of whether any member of the public actually sees, hears or otherwise enjoys the work or performance so made available. Explanation: For the purposes of this clause, communication through satellite or cable or any other means of simultaneous communication to more than one household or place of residence including residential rooms or any hotel or hostel shall be deemed to be communication to the public." 59. Certain amendments were made to Section 37(3)(e). Section 39A was amended to extend the provisions of Sections 33 and 33A to owners of the broadcast reproduction rights as follows:- "39A. Other provisions applying to broadcast reproduction right and performer's right. (1) Sections 18, 19, 30, 30A, 33, 33A, 34, 35, 36, 53, 55, 58, 63, 64, 65, 65A, 65B and 66 shall, with any necessary adaptations and modifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld Copyright Law, (2nd Edn.) by J.A.L. Sterling.] 126. The word "compensation", however, must have been used keeping in view the fact that if it is a statutory grant; it is a case of statutory licence. We are not unmindful of the fact in cases of other statutory licences, the word "royalty" has been used. Even the word "usually" has been used. Mr Divan himself has referred to Rule 11-A and Form II-A appended to the Rules of 1958. Clauses (10) and (11) of the form which have validly been made used the word "royalty". "10. Rate of royalty, which the applicant considers reasonable, to be paid to the copyright owner. 11. Means of the applicant for payment of the royalty." 127. The legislature therefore for all intent and purport equates "compensation" with "royalty". In the context of the Act, royalty is a genus and compensation is a species. Where a licence has to be granted, it has to be for a period. A "compensation" may be paid by way of annuity. A "compensation" may be held to be payable on a periodical basis, as apart from the compensation, other terms and conditions can also be imposed. The compensation must be directed to be paid with certain other terms and conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing into of the revised Tariff Scheme at least before two months in advance and the same shall be posted on its website." 62. At this juncture, it is of a little importance to compare and contrast Section 2(dd) of the Copyright Act with "broadcasting services" as defined in the impugned Regulation and Tariff Order. By Clause 2(j) of the impugned Regulation, "broadcasting services" is defined as follows: "2(j) "broadcasting services" means the dissemination of any form of communication like signs, signals, writing, pictures, images and sounds of all kinds by transmission of electro-magnetic waves through space or through cables intended to be received by the general public either directly or indirectly and all its grammatical variations and cognate expressions shall be construed accordingly;" 63. When the definitions of "broadcast" in Section 2(dd) of the Copyright Act and of "broadcasting services" in Clause 2(j) of the impugned Regulation are compared, what is clear is that the words "intended to be received by the general public either directly or indirectly" are completely missing from the definition of "broadcast" contained in the Copyright Act. Also, Section 52(1)(b) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nels as has been held hereinabove. We are satisfied that the impugned Regulation and Tariff Order have been passed by a regulatory authority after applying its mind to the objections of the various stakeholders involved after which the Regulation and Tariff Order have been laid down which have, by and large, been initially acceded to by the broadcasters themselves. In this view of the matter, we are of the view that the Copyright Act will operate within its own sphere, the broadcaster being given full flexibility to either individually or in the form of a society charge royalty or compensation for the three kinds of copyright mentioned hereinabove. TRAI, while exercising its regulatory functions under the TRAI Act, does not at all, in substance, impinge upon any of these rights, but merely acts, as has been stated hereinabove, as a regulator, in the public interest, of broadcasting services provided by broadcasters and availed of by the ultimate consumer. 65. As Dr. Singhvi has repeatedly stressed that fixation of rates under Section 11(2) would directly impinge upon compensation payable for copyright to the broadcasters, it is important to note that both the Copyright Act as well ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
