INDIA BUSINESS WORLD - APRIL 2007
The Month that was ...

BROADCASTERS CAN'T GIVE MSO EXCLUSIVE RIGHTS, SAYS APEX COURT

The Supreme Court has ruled that broadcasters cannot appoint agents who are part of the network or competitors to others who receive signals. In simple terms, the broadcasters cannot appoint Multi System Operator (MSO) as their agents for exclusive distribution of signals in an area.

The apex court rejected the plea of appellant Star India Pvt. Ltd that under the Interconnection Regulation, 2004 of Trai there is no prohibition in matter of appointment of any MSO as its agent on exclusive basis for an area.

A bench comprising Justice Arijit Pasayat and Justice SH Kapadia said, "The difficulty arose when the broadcaster appoints or enters into an agreement with a distributor who in turn is an MSO and who in turn has his own business because in such a case such an agent-cum-distributor is also a competitor of the MSO who seeks signals from the broadcaster."

"If under the Interconnection Regulation, an MSO is entitled to receive signals directly from a broadcaster, if directed to approach his competitor MSO then discrimination comes in," said the court.

The court gave its reasons for such discrimination. "The exclusive agent of a broadcaster has his own subscriber base. His base is different from another MSO in the same area. If that other MSO has to depend on the feed to be provided by the exclusive agent of the broadcaster then the very object of Interconnection Regulation stands defeated," said the court. The court said that one of the main issues which arose for determination was the difference between 'transmission' including re-transmission of signals on the one hand and the expression 'providing TV channels' on the other, which finds place under the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation, 2004.

Star India under an agreement appointed Moon Network as its exclusive agent for Agra region. At the same time, the agreement recognized the status of Moon Network as an MSO engaged in business of transmission of TV channels through ground cables. Against that another MSO Sea TV Network and others went to TDSAT which asked Star India to supply signals of its bouquet of channels on reasonable terms and conditions to the petitioners. Against Tribunal order, Star India came in appeal to the apex court which dismissed it.

"We do not find any error in judgment which has held that in providing signals to a distributor through an agent who is also in turn a distributor is per se discriminatory," said court while upholding Tribunal order.