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2015 Supreme(Online)(TDSAT) 14
TELECOM DISPUTES SETTLEMENT AND APPELLATE TRIBUNAL
MR. AFTAB ALAM, CJ, MR. KULDIP SINGH, J
Centre for Transforming India – Appellant
Versus
Telecom Regulatory Authority of India – Respondent
Appeal No. 1(C) of 2014 | Appeal No. 2(C) of 2014 | Appeal No. 3(C) of 2014 | Appeal No. 4(C) of 2014 | Appeal No. 5(C) of 2014 | Appeal No. 6(C) of 2014
For the Appellants/Petitioners:Mr. Aman Lekhi, Sr. Advocate, Mr. Ashok Kumar, Advocate, Mr. Arun Kathpalia, Advocate, Mr. Vivek Sarin, Advocate, Mr. Vikram Singh, Advocate, Mr. Vineet Bhagat, Advocate, Ms. Neha Jain, Advocate
For the Respondents:Mr. Saket Singh, Advocate, Mr. Meet Malhtora, Sr. Advocate, Mr. Tejveer Singh Bhatia, Advocate, Mr. Rohan Swarup, Advocate
The use of Wholesale Price Index for tariff hikes in broadcasting services was deemed arbitrary, as it lacked transparency and proper consultation with stakeholders, necessitating comprehensive analysis for future tariff formulation.
Headnote:(A) The Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Eleventh Amendment) Order, 2014 - Jurisdiction and transparency under Section 11(4) of the TRAI Act, 1997 challenged - Impugned order allowing 27.5% hike in wholesale prices deemed arbitrary and without consultation - The appellants claim violation of consumer interests and demand for adherence to transparency - The Court finds that the TRAI failed to consider all relevant factors in setting the increased prices for services - The rationale for applying Wholesale Price Index (WPI) noted to be problematic without sufficient justification or consistency in application. (Paras 1-48)
Facts of the case:
Appeals filed against the TRAI's tariff amendment orders allowing a significant inflationary hike in cable service prices, affecting consumers and service providers, with allegations of arbitrary decision-making processes and lack of transparency.
Findings of Court:
The amendments to the Principal Tariff Order were found untenable, lacking necessary consultation and justification.
Issues: The central issue relates to the appropriateness of the WPI as an index for tariff adjustments in contrast to other measures and the lack of a transparent process in determining tariff hikes.
Ratio Decidendi: The Tribunal emphasized the necessity for TRAI to conduct thorough analyses using comprehensive data from stakeholder agreements, asserting that the regulator must act transparently in tariff settings to ensure fair pricing.
Result: The amendments to the tariff orders are set aside, with implications for service pricing management moving forward.
| Table of Content |
|---|
| 1. appeals against trai's tariff orders. (Para 1) |
| 2. appellants allege arbitrary tariff hike. (Para 2 , 3 , 20 , 21 , 22 , 26 , 29) |
| 3. history of tariff orders and trai's responsibilities. (Para 4 , 5 , 6 , 7 , 11 , 31 , 32) |
| 4. concerns over wpi as appropriate measure for inflation. (Para 17 , 18 , 23 , 24) |
| 5. need for comprehensive tariff evaluation. (Para 33 , 35) |
| 6. evaluation of trai's adherence to regulatory responsibilities. (Para 40 , 46) |
| 7. court invalidates specific tariff amendments. (Para 45 , 48) |
ORDER
Kuldip Singh :
These Appeals are directed against the Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Eleventh Amendment) Order, 2014 issued by TRAI.
The Appellant in Appeal No. 1 (C) of 2014 is a Consumer Welfare Organization. The other appellants are cable operators providing free to air and pay channels to the consumers/subscribers. The appellants are aggrieved by a : None. 27.5 % inflation linked hike in wholesale prices of pay channels. The hike is provided in two installments; 15 % w.e.f. 01.04.2014 and 12.5 % w.e.f 01.01.2015.
2. Briefly stated, the contention of the Appellants is that the impugned tariff Order is without jurisdiction, and arbitrary. They allege that the impugned Order has been passed without following the requirements of transparency as ordained in section 11 (4) of the TRAI Act . It completely disregards the interest of consumers/subscribers at large and is heavily tilted towards broadcasters and distributers of channels. As per the Appellants, the impugned Order has resulted only in the continuation of price freeze stipulated by the Principal Tariff Order dated 1.10.2004.
3. Vide order dated July 8, 2014, the Tribunal allowed the applications for impleading of co-appellants and other interveners. The intervener on behalf of Indian Broadcasting Federation (IBF) supports the impugned order. The other interveners who are Direct to Home (DTH) operators, Multi System Operators ( MSOs) , Association of Cable Operators/Cable Operators oppose the impugned order on the same grounds as the Appellants.
4. The impugned order has been issued under Sub Clause (ii), (iii) and (iv) of Clause (b) of sub-section (1) and sub-section (2) of Section 11 of the TRAI Act , 1997 (24 of 1997). Prior to 09.01.2004, Broadcasting & Cable services were not in the purview of TRAI. On 09.01.2004, the Government of India issued Notification No. 39 [S.O. 44 (E) and 45 (E)] whereby definition of ‘Telecommunication Services’ was expanded to include ‘Broadcasting & Cable Services’. On 15.01.2004, a tariff order “Telecommunication (Broadcasting & Cable) Services Tariff Order 2004 (1 of 2004) ” was issued by TRAI freezing the charges payable by a subscriber to a cable operator, a cable operator to a MSO, and a MSO to a broadcaster as prevalent on 26.12.2003. Since then six tariff orders and a number of amendments to these have been issued.
On 01.10.2004, ‘The Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004 (6 of 2004)’ , also known as the ‘Principal Tariff Order’, was issued repealing the Tariff Order dated 15.01.2004. While fixing the ceiling for the rates as prevailing on 26.12.2003, this Tariff Order also provided for proportionate increase and decrease of the price in case the channels were added or reduced after 26.12.2003. Fourteen amendments have since been made to this Tariff Order.
5. Another Tariff Order titled ‘The Telecommunication (Broadcasting and Cable) Services (Third) (CAS areas) Tariff Order, 2006 (6 of 2006)’ was issued on 31.08.2006 in respect of addressable systems. Three amendments have since been issued to this order.
6. ‘The Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable system) Tariff Order, 2010 (1 of 2010)’ was issued on 21.07.2010. Four amendments to this order have since been issued. Two more Tariff Orders, ‘The Telecommunication (Broadcasting and Cable) Services (Fifth) (Digital Addressable Cable TV System) Tariff Order,
