SC notices to Trai, operators on ESPN petition over CAS

The Supreme Court on Tuesday issued notices to the Trai and a few multi-system operators on a plea filed by ESPN Star Sports, challenging the regulator's order to fix Rs 5 a month as the fee per pay channel under the new cable TV delivery mechanism Conditional Access System (CAS).

ESPN has also challenged the Trai's revenue sharing model, which limits channels' share in subscription fee to 45 per cent of Rs 5 while that of Multi-System Operators (MSOs) at 30 and local cable operator at 25 per cent. A bench headed by Justice S B Sinha issued notices to the Trai, Hathway Cable and Datacom Pvt Ltd and Indus Ind Media and Communications.

However, ESPN counsel Soli Sorabjee clarified that the broadcaster was not seeking a stay on the TDSAT judgement.

While challenging the TDSAT judgement that dismissed its plea, ESPN said the regulator had interfered with a "crucial commercial aspect of the satellite cable TV business to the utter detriment of the broadcasters in an arbitrary, whimsical and cavalier manner". According to the broadcaster, the Trai's tariff order dated August 31, 2006 prescribing Rs 5 as maximum subscription fee per channel per month irrespective of the genre, content, and language of any such pay channels was wrong and untenable. While challenging the Trai's powers to stipulate the maximum retail price, the channel said it cannot be compelled to charge a "measly Rs 5 for its expensive content" despite the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Ordinance 2007, making it mandatory for the general public to view major sporting events for free on Doordarshan.

ESPN argued that a sports channel cannot be equated with other news and entertainment channels as they incur heavy expenditure towards acquistion of broadcasting contents. In its petition, the channel said by regulating prices, the Trai was attempting to dislodge the |established practice of broadcasters who offer a bouquet of channels which were "attractively priced".

The broadcaster said TDSAT and the Trai also ignored its offer of providing its two channels at Rs 29 on an a-la-carte basis and Rs 32 for the bouquet of two channels, as it was providing in Chennai where CAS had been implemented.

The broadcaster also alleged TRAI and the Ministry of Information and Broadcasting were eroding its business model.

ESPN said its monthly subscription revenue before CAS was an estimated Rs 1.07 crore in three metropolitian cities of Delhi, Mumbai and Kolkata.

However, post-CAS, it expected its revenue to be Rs 21.39 lakh based on its estimate of 4,75,325 set top boxes installed in three metros, provided all of them subscribed its channels.

ESPN said it would suffer an annual revenue loss to the tune of Rs 4.50 crore after the new rate was made applicable.