STAR INDIA PRIVATE LIMITED v. DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION & ORS.

The Judgment of the Court was delivered by E R. F. NARIMAN, J.

1Copy pinpoint1. The present civil appeals raise a challenge to certain clauses of the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 (hereinafter referred to as the “Regulation”) notified on 3.3.2017 and the F Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017 (hereinafter referred to as the “Tariff Order”) dated 3.3.2017 made under the Telecom Regulatory Authority of India Act, 1997 (hereinafter referred to as the “TRAI Act”). Since regulations made under the TRAI Act were under challenge, a writ petition was filed before the Madras High Court in which the main G issues that arose before the Division Bench were as follows:- a. Whether the Telecom Regulatory Authority of India (hereinafter referred to as “TRAI”) has the power to regulate only the ‘means of transmission’, viz. the ‘carriage’ aspect of broadcasting, and H

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A does not have the power to regulate the ‘content’ of the broadcast (i.e. the channel and/or its constituent programmes)? b. Whether the impugned clauses, in fact, and in effect, regulate the content of the broadcast (i.e. the channel and/or its constituent programmes)? B c. Whether the impugned clauses have a direct effect on the pricing and marketing of a television channel by the broadcaster and hence is an illegal interference with the content of the broadcast (i.e. the channel and/or its constituent programmes)? The appellants have contended that the impugned clauses have the effect of regulating programmes and television channels, their pricing and their marketing and manner of offering/ bundling in the following illustrative manner, which is beyond the scope of TRAI’s jurisdiction of regulating “means of transmission”: a. TRAI has effectively fixed a uniform maximum retail price for each TV channel at INR 19/-; b. TRAI has stipulated that a television channel, which is individually priced at more than INR 19/- cannot be included in a collection of television channels (commonly referred to as a “bouquet”) and can only be offered on an individual/ a-la-carte/ E stand-alone basis; c. TRAI has stipulated that the price of a bouquet of television channels shall not be less than 85% of the sum of a-la-carte prices of television channels comprised in the bouquet; d. TRAI has stipulated that the sum of discount on television F channels and the distribution fee paid by broadcasters to a distributor of television channels, cannot exceed 35% of the maximum retail price of the television channel; e. Television channels cannot be priced differently for different distribution platforms; G f. Channels of one broadcaster cannot be offered by another broadcaster in their bouquet of television channels, even after obtaining due authorization;

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g. Promotional schemes (i) can only be offered on a-la-carte prices A for offering television channels and not on bouquet prices, (ii) cannot exceed 90 days at a time, 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; B i. Pay channels and free to air channels cannot be in the same bouquet.

2Copy pinpoint2. 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:- C

“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 D 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 understand in the course of the hearing that they are relevant and necessary for some other clauses also other than those which have been put in issue in the instant writ petitions, they deserve to be saved to the extent they survive and serve the purpose other than serving implementation or any other purpose of the provisions which we have struck down. Therefore, the other impugned provisions, i.e., clause 11(2) in the said Regulations as also clause 4(2) in the said tariff order will continue to be in the books, but cannot be pressed into service for anything to do with the provisions which we have struck down supra. In other words, these provisions, i.e., clause 11(2) in the said Regulations as also clause 4(2) in the said tariff order can be operated if it can be operated for other provisions of the said Regulations and said tariff order, other than those which we have struck down.”

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3Copy pinpoint3. Differing from M. Sundar, J., the learned Chief Justice held:- “69. I am unable to agree with the conclusion of M. Sundar, J. that the provisions of the impugned Regulation and the impugned Tariff Order are not in conformity with the TRAI Act. In my view the impugned provisions neither touch upon the content of B programmes of broadcasters, nor liable to be struck down. However, the clause putting cap of 15% to the discount on the MRP of a bouquet is arbitrary. The said provision is, in my view, not enforceable. In my considered view, the challenge to the impugned Regulation and the impugned Tariff Order fail.

C 70. Since we have not been able to agree, the writ petitions may be placed before a third Judge. Since the Chief Justice has delivered the dissenting judgment, the matter may be placed before the next available Judge in order of seniority for nomination of the Judge before whom the matter may be placed.”

4Copy pinpoint4. The third Judge who therefore resolved the controversy in favour of the present respondents was M.M. Sundresh, J. After an exhaustive analysis of the arguments and the Acts in question, the third learned Judge sided with the Hon’ble Chief Justice and held:- “27.1. In her short, yet clear decision, the Hon’ble Chief Justice E has held that there is sufficiency of the power under the TRAI Act as against the Indian Copyright Act, 1957. They travel in their respective paths, not intended to cross. The scope of the amendments made in the year 2012 along with Section 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 F 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. G 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 H

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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 under the tariff order, the aforesaid decision cannot be a ground to hold that the ultimate conclusion arrived at on the other issues would necessarily follow suit. After all, as a reference Court, this Court is concerned with the views expressed by either of the learned Judges on the points of difference. Accordingly, the dissenting judgment stands concurred. C

28. In the result, this reference qua points of difference stands ordered concurring with the dissenting judgment. No costs.”

5Copy pinpoint5. Dr. A.M. Singhvi, learned Senior Advocate appearing on behalf of the appellants, has referred to several statutes and judgments in the D course of his detailed submissions. According to the learned Senior Advocate, the TRAI Act was amended in 2000, as a result of which the TRAI Act was extended to broadcasting services which were undefined. By a Central Government notification dated 9.1.2004, the TRAI Act was expressly extended to broadcasting services, and certain functions were allocated to TRAI in addition to those contained in Section 11(1)(a) E of the TRAI Act, as also to specify norms and periodicity of revision of rates of pay channels. According to the learned Senior Advocate, the definition of “telecommunication service” contained in Section 2(1)(k) of the TRAI Act only enables TRAI to regulate transmission or reception of broadcasting services, which essentially relates to regulatory measures F taken for carriage of these signals. According to the learned Senior Advocate, his clients, namely, broadcasters, do not have to obtain the permission of the Government of India for uplinking their programmes with a particular satellite at a particular frequency, after which permission has to be obtained for downlinking such channels. At this point, the broadcaster, post downlinking, sends the signal to a multi-system operator G (hereinafter referred to as an “MSO”), who in turn sends the signal to a cable TV operator from which it is beamed to the ultimate consumer watching the television programmes. For this, the broadcasters pay a distribution fee and a carriage fee for transportation of such signal, then send the signals to the MSO, who in turn sends it on to the cable TV H

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A operator, who beams the signal to the ultimate consumer. Distribution fee, carriage fee and networking capacity fee are all payable by the broadcaster, with which the broadcaster can have no quarrel. Equally, in 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 B 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 broadcasters have in the form of both copyright, as well as broadcast reproduction right inter alia under Section 37 of the Copyright Act. He E relied heavily on the 2012 amendment to the Copyright Act, and in particular on Chapter 8 of the said Act. According to him, tariff, which relates to content, is governed by the Copyright Act and not by the TRAI Act, whereas transmission and delivery to the consumer, namely, carriage, alone pertains to TRAI’s jurisdiction. According to him, the impugned clauses of the Regulation as well as the Tariff Order impact and have F the effect of regulating pricing and terms and conditions of licensing of TV channels, including their packaging, bundling and other manner of offering the said channels and their underlying programmes, being films, TV shows, etc., which are all aspects of intellectual property rights covered by the Copyright Act. He relied heavily upon the Sports G Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 (hereinafter referred to as the “Sports Act”), by way of contrast, and stated that in this Act the definitions of “broadcaster”, “broadcasting”, “broadcasting service” and “content” made it clear that the reach of this Act was not merely confined to transmission of signal but extended to content as well, and argued that the difference therefore in the definitions H

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contained in the Sports Act would show that the reach of the TRAI Act A in contrast was limited and did not go to content. He also relied strongly upon the Cable TV Act and in particular on the definitions of “broadcaster” and “cable operator” therein, as well as Section 4A and 5 thereof, read with the Rules framed thereunder, which would show that “content” could certainly be regulated by TRAI under the Sports Act, but only in B the manner provided by that Act and from the stage of the cable TV operator to the consumer and not before. It is thus clear that this being the case, the aforesaid regulations are outside the power of TRAI under the TRAI Act and must thus be struck down.

6Copy pinpoint6. Shri P. Chidambaram, learned Senior Advocate appearing on behalf of some of the appellants, argued in support of Dr. Singhvi. He C referred, in particular, to the definitions contained in Sections 2(dd) and 2(ff) of the Copyright Act and stated that “broadcast” would only mean keeping in readiness a set of TV channels, which may or may not be further carried 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. F

7Copy pinpoint7. 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 the public interest in order to protect the interests of both G service providers like the broadcasters here, as well as the consumers. Interest of the consumers of broadcasting services is therefore one of the paramount considerations when one comes to the authority or jurisdiction of TRAI under the said Act. According to the learned Senior Advocate, from the stage of the teleport from which a TV channel is H

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A uplinked by a broadcaster to a satellite and then downlinked to an MSO, permissions of the Central Government have to be taken for both uplinking and downlinking, under guidelines issued, which he took us through. The said guidelines would show that content is certainly regulated at this stage, as TV channels which are contrary to the security of the state, for example, would not be allowed to be beamed. According to him, regardless of whether the teleport from which the broadcaster’s signal is uplinked to a satellite is owned by the broadcaster, or is beamed by a person other than the broadcaster, a licence under Section 4 of the Telegraph Act and Section 5 of the Wireless Telegraphy Act is a sine qua non for operating a teleport and that therefore it is wholly fallacious to say that broadcasters need not be licencees under the Telegraph Act when they broadcast signals, either from their own teleport, or in conjunction with the owner of a teleport, which reach the ultimate consumer in India. According to the learned Senior Advocate, therefore, a constricted reading of the TRAI Act would stultify the nature of the beneficial legislation contained therein, which is to look after consumer interests as well. It is clear therefore that the definition of “telecommunication service” in Section 2(1)(k) cannot be read in the manner suggested by Dr. Singhvi, and would include, when it comes to broadcasters, beaming and transmission of signals from the teleport onwards right up till the stage of the MSO and the cable TV operator thereafter. He stressed upon Section 11(1)(b) in particular and stated that in order to ensure effective interconnection between different service providers, it was necessary to lay down regulations made under Section 36 of the Act that balanced the interest of broadcasters with the interest of consumers. He was at pains to point out that at no stage does either the Regulation or the Tariff Order seek to regulate, directly or indirectly, the 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 H

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to content and the Copyright Act were made solely as an afterthought. A 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 those made by TRAI in the present case would pass muster, but not from the stage of broadcaster to MSO and MSO to Cable TV operator. He made it clear that the Sports Act would have no application in the present case as it dealt with the compulsory broadcast of certain sports events by broadcasters, which was why content was referred to in the said Act. He reiterated that at no stage does TRAI seek to or in fact regulate content of what is broadcasted so that any reference to this Act would be wholly irrelevant for the purpose of deciding this case. He also strongly relied upon Sections 3AA and 4 of the Telegraph Act to buttress his submission. According to him, since the Copyright Act operates in a distinct and separate field from the TRAI Act, equally the red herring of the Copyright Act would have no real relevance to the powers and functions of TRAI acting under the TRAI Act. He also cited certain decisions which will be referred to later in this judgment.

8Copy pinpoint8. Shri Vikas Singh, learned Senior Advocate also appearing on behalf of TRAI, referred to Section 2(1)(k) of the TRAI Act in order to explain that the main provision and the proviso had to be harmonised in the manner suggested by the Delhi High Court in Star India Pvt. Ltd. v. TRAI, (2018) 146 DLT 455, and that, so harmonised, it is clear that the main provision did not include broadcasting services only for the time being. The proviso which was added by the Amendment Act of 2000 made it clear that the time had come to include broadcasting services as well. He further argued that the appellants in the present case had been taking contradictory stands throughout. As an example of such stand, he referred to an Order of the Competition Commission of India dated 27.2.2018, in which he referred to the stand of the appellants stating that the Competition Commission had no jurisdiction to look into pricing and the manner of offering TV channels, which lies in the domain of the sectoral regulator TRAI and is, therefore, an occupied field. He also referred to how the analogue system led to great leakages which led to less revenue and how the movement towards digitisation, therefore, gave broadcasters a great fillip in their revenue. He also referred to the consultations that went on between all stakeholders and consumers which H

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A led up to the impugned Regulation, which was a Regulation which balanced the interests of broadcasters and consumers.

9Copy pinpoint9. 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.

10Copy pinpoint10. Shri Shyam Divan, learned Senior Advocate, appeared on behalf of direct-to-home companies. He referred to and relied upon various provisions of the Copyright Act, in particular, Section 37 thereof, making it clear that the broadcast reproduction right referred to is born only after the broadcast which has passed down from the broadcaster through the MSO to the cable operator to the consumer and/or through the DTH service provider to the consumer is over. He stressed the fact that this right comes in only when a re-broadcast or a subsequent second broadcast takes place after the original broadcast, which would not be covered by the Regulation or the Tariff Order in the present case.

11Copy pinpoint11. Shri Krishnan Venugopal, learned Senior Advocate appearing for some of the consumers, referred to the Standing Committee of Parliament, in which it was pointed out that digitisation of cable TV G services, by switching from the older analogue system in phases from 2012 onwards, had greatly increased the revenue of broadcasters and stated that these benefits could not possibly be denied by the broadcasters. In addition, the selfsame broadcasters have been regulated throughout and are raising questions relating to jurisdiction only after the present H Regulation and Tariff Order have been made largely with their consent. He also cited certain decisions on the reach of TRAI under the TRAI Act.

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12Copy pinpoint12. Having heard learned counsel for the parties, it is important to first deal with the TRAI Act. 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. This Court stated: “Per Sawant, J.: C

78. There is no doubt that since the airwaves/frequencies are a public property and are also limited, they have to be used in the best interest of the society and this can be done either by a central authority by establishing its own broadcasting network or regulating the grant of licences to other agencies, including the private agencies. What is further, the electronic media is the most powerful media both because of its audio-visual 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. F

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. … G 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 H

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A the interests of the public and to prevent the invasion of their rights. Since the electronic media involves the use of the airwaves, this factor creates an in-built restriction on its use as in the case of any other public property. [ii] The right to impart and receive information is a species of the right of freedom of speech and expression guaranteed by Article 19(1)(a) of the Constitution. A citizen has the fundamental right to use the best means of imparting and receiving information and as such to have an access to telecasting for the purpose. However, this right to have an access to telecasting has limitations on account of the use of the public property, viz., the airwaves, involved in the exercise of the right and can be controlled and regulated by the public authority. This limitation imposed by the nature of the public property involved in the use of the electronic media is in addition to the restrictions imposed on the right to freedom of speech and expression under Article 19(2) of the Constitution. [iii] The Central Government shall take immediate steps to establish an independent autonomous public authority representative of all sections and interests in the society to control and regulate the use of the airwaves. E [iv] Since the matches have been telecast pursuant to the impugned order of the High Court, it is not necessary to decide the correctness of the said order. Per Jeevan Reddy J.:

F 201.1.(b) Airwaves constitute public property and must be utilised for advancing public good. No individual has a right to utilise them at his choice and pleasure and for purposes of his choice including profit… 201.1.(c) Broadcasting media is inherently different from Press or other means of communication/ information. The analogy of G press is misleading and inappropriate. This is also the view expressed by several Constitutional Courts including that of the United States of America. xxx xxx xxx H

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201.4. The Indian Telegraph Act, 1885 is totally inadequate to govern an important medium like the radio and television, i.e., broadcasting media. The Act was intended for an altogether different purpose when it was enacted. This is the result of the law in this country not keeping pace with the technological advances in the field of information and communications. While all the leading democratic countries have enacted laws specifically governing the broadcasting media, the law in this country 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.”

13Copy pinpoint13. Accordingly, the Government formulated a National Telecom D 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 promotion of consumer interest and ensuring fair competition, there is a felt need to separate regulatory functions from service providing functions which will be in keeping with the general trend in the world. In the multi-operator situation arising out of opening of basic as well as value added services in which private operator will be competing with Government operators, there is a pressing need for an independent telecom regulatory body for regulation of telecom services for orderly and healthy growth of telecommunication infrastructure apart from protection of consumer interest.

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A 2. In view of above, it was proposed to set up an independent Telecom Regulatory Authority as a non-statutory body and for that purpose the Indian Telegraph (Amendment) Bill, 1995 was introduced and then passed by Lok Sabha on 6th August, 1995. At the time of consideration of the aforesaid Bill in Rajya Sabha, having regard to the sentiments expressed by the Members of B Rajya Sabha and of the views of the Standing Committee on Communication which expressed a hope that steps will be taken to set up a Statutory Authority, it is proposed to set up the Telecom Regulatory Authority of India as a statutory authority.

3. The proposed Authority will consist of a Chairperson and C minimum two and maximum four members. A person who is or has been a Judge of the Supreme Court or Chief Justice of a High Court will be eligible to be appointed as a Chairperson of the authority. A member shall be a person who has held as the post of Secretary or Additional Secretary to the Government of India D or any equivalent post in the Central Government or the State Government for minimum period of three years.

4. The powers and functions of the Authority, inter alia, are- (i) ensuring technical compatibility and effective inter- relationship between different service providers; E (ii) regulation of arrangement amongst service providers of sharing their revenue derived from providing telecommunication service; (iii) ensuring compliance of licence conditions by all service providers; (iv) protection of the interest of the consumers of telecommunication service; (v) settlement of disputes between service providers; (vi) fixation of rates for providing telecommunication service within India and outside India; (vii) ensuring effective compliance of universal service obligations.

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5. The Authority shall 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. C

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.” D

(Emphasis supplied.)

14Copy pinpoint14. The said Act was amended by Act 2 of 2000, which substituted the Preamble of the TRAI Act thus: E “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 interests of service providers and consumers of the telecom sector, to promote and ensure orderly F growth of the telecom sector and for matters connected therewith or incidental thereto” (Emphasis supplied.)

15Copy pinpoint15. The Amendment Act of 2000 added a proviso to the definition of “telecommunication service” under Section 2(1)(k), permitting the G Central Government to notify other services to be telecommunication services including broadcasting services. The relevant provisions of the TRAI Act are, therefore, set out hereinbelow:

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A “2(1) In this Act, unless the context otherwise requires,- xxx xxx xxx (e) “licensee” means any person licensed under sub-section (1) of Section 4 of the Indian Telegraph Act, 1885 (13 of 1885) for providing specified public telecommunication services; B (ea) “licensor” means the Central Government or the telegraph authority who grants a licence under Section 4 of the Indian Telegraph Act, 1885; xxx xxx xxx C (j) “service provider” means the Government as a service provider and includes a licensee; (k) “telecommunication service” means service of any description (including electronic mail, voice mail, data services, audio tax services, video tax services, radio paging and cellular mobile D telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electromagnetic means but shall not include broadcasting services. E Provided that the Central Government may notify other service to be telecommunication service including broadcasting services. xxx xxx xxx

11. Functions of Authority.— (1) Notwithstanding anything contained in the Indian Telegraph Act, 1885 (13 of 1885), the F functions of the Authority shall be to— (a) make recommendations, either suo motu or on a request from the licensor, on the following matters, namely:— (i) need and timing for introduction of new service provider; G (ii) terms and conditions of licence to a service provider; (iii) revocation of licence for non-compliance of terms and conditions of licence; (iv) measures to facilitate competition and promote efficiency in the operation of telecommunication services so as to H facilitate growth in such services;

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(v) technological improvements in the services provided by the service providers; (vi) type of equipment to 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; C (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; D (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; E

(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; F

(vi) lay-down and ensure the time period for providing local and long distance circuits of telecommunication between different service providers; (vii) maintain register of inter-connect agreements and of all G such other matters as may be provided in the regulations; (viii) keep register maintained under clause (vii) open for inspection to any member of public on payment of such fee and compliance of such other requirement as may be provided in the regulations; H

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A (ix) ensure effective compliance of universal service obligations; (c) levy fees and other charges at such rates and in respect of such services as may be determined by regulations; (d) perform such other functions including such administrative B and financial functions as may entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act: Provided that the recommendations of the Authority specified in clause (a) of this sub-section shall not be binding upon the Central C Government: Provided further that the Central Government shall seek the recommendations of the Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of new licence to be issued to a service provider and the Authority D shall forward its recommendations within a period of sixty days from the date on which that Government sought the recommendations: Provided also that the Authority may request the Central Government to furnish such information or documents as may be E necessary for the purpose of making recommendations under sub- clauses (i) and (ii) of clause (a) of this sub-section and that Government shall supply such information within a period of seven days from receipt of such request: Provided also that the Central Government may issue a licence to F a service provider if no recommendations are received from the Authority within the period specified in the second proviso or within such period as may be mutually agreed upon between the Central Government and the Authority: Provided also that if the Central Government, having considered G that recommendation of the Authority, comes to a prima facie conclusion that such recommendation cannot be accepted or needs modifications, it shall refer the recommendation back to the Authority for its reconsideration, and the Authority may, within fifteen days from the date of receipt of such reference, forward to the Central Government its recommendation after considering H

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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 sub-section (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 xxx E

36. Power to make regulations.— (1) The Authority may, by notification, make regulations consistent with this Act and the rules made thereunder to carry out the purposes of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of F the following matters, namely :— (a) the times and places of meetings of the Authority and the procedure to be followed at such meetings under sub-section (1) of Section 8, including quorum necessary for the transaction of business; G (b) the transaction of business at the meetings of the Authority under sub-section (4) of Section 8; (c) [* * *]

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A (d) matters in respect of which register is to be maintained by the Authority under sub-clause (vii) of clause (b) of sub-section (1) of Section 11; (e) levy of fee and lay down such other requirements on fulfilment of which a copy of register may be obtained under sub-clause B (viii) of clause (b) of sub-section (1) of Section 11; (f) levy of fees and other charges under clause (c) of sub-section (1) of Section 11.”

16Copy pinpoint16. The proviso to section 2(1)(k) was challenged in the Delhi High Court, which challenge was repelled by the Delhi High Court in C Star India Private Limited v. TRAI & Ors., (supra.). An SLP from the said judgment was also dismissed. Acting under Section 2(1)(k), the Central Government issued two notifications on 9.1.2004. S.O.44(E) reads as follows:- “S.O. 44(E). – In exercise of the powers conferred by the proviso D to clause (k) of sub-section (1) of section 2 of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997), the Central Government hereby notifies the broadcasting services and cable services to be telecommunication service. [Notification No. 39 issued by Ministry of communication and E Information Technology dated 9 January 2004. S.O. No. 44(E) issued by TRAI, vide F.No. 13-1/2004]” S.O.45(E) reads as follows:- “S.O.45(E). – In exercise of the powers conferred by clause (d) of sub-clause (1) of section 11 of the Telecom Regulatory Authority F of India Act, 1997 (24 of 1997) (hereinafter referred to as the Act), the Central Government hereby entrusts the following additional functions to the Telecom Regulatory Authority of India, established under Sub-section (1) of Section 3 of the Act, in respect of broadcasting services and cable services, namely:- G (1) 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. H

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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 sub-section (2) of section C 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 by TRAI, vide F.No. 13-1/2004]” D

17Copy pinpoint17. We are concerned with the impugned Regulation that was framed on 3.3.2017 under Section 36 of the Act together with the Tariff Order made on the same date. The regulations with which we are directly concerned are set out hereunder: “3. General obligations of broadcasters.— (1) No broadcaster E shall engage in any practice or activity or enter into any understanding or arrangement including exclusive contracts with any distributor of television channels that prevents any other distributor of television channels from obtaining signals of television channel of such broadcaster for distribution. F (2) Every broadcaster shall, within sixty days of receipt of written request from a distributor of television channels for obtaining signals of television channel or within thirty days of signing of interconnection agreement with the distributor, as the case may be, provide, on non-discriminatory basis, the signals of television G channel to the distributor or convey the reasons in writing for rejection of the request if the signals of television channel are denied to such distributor: Provided that imposition of any term or condition by the broadcaster, which is unreasonable, shall be deemed to constitute a denial of request: H

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A Provided further that this sub-regulation shall not apply to a distributor of television channels, who requests signals of a particular television channel from a broadcaster while at the same time demands carriage fee for distribution of that television channel or who is in default of payment to the broadcaster and continues to be in such default. B (3) If a broadcaster, proposes or stipulates for, directly or indirectly, placing the channel in any specified position in the electronic programme guide or assigning a particular channel number, as a pre-condition for providing signals, such pre-condition shall also amount to imposition of unreasonable condition. C Explanation: For removal of doubt, it is clarified that if a pay broadcaster offers discount, in non-discriminatory manner, through its reference interconnect offer on the maximum retail price of pay channel, within the limit as specified in sub-regulation (4) of regulation 7, to distributors of television channels for placing the channel in any specified position in the electronic programme guide or assigning particular channel number, such offer of discount 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.

F 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

G 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 H bouquet:

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Provided further that such bouquet shall not contain— A (a) any ‘free-to-air channel’; and (b) High definition (HD) and Standard Definition (SD) variants of the same channel.

7. Publication of reference interconnection offer by B broadcaster for pay channels.— (1) Every broadcaster shall publish, on its website, reference interconnection offer, in conformance with the regulations and the tariff orders notified by the Authority, for providing signals of all its pay channels to the distributor of television channels— C (a) within sixty days of commencement of these regulations; and (b) before launching of a pay channel. and simultaneously submit, for the purpose of record, a copy of the same to the Authority. D (2) The reference interconnection offer, referred to in sub- regulation (1), shall contain the technical and commercial terms and conditions relating to, including but not limited to, maximum retail price per month of pay channel, maximum retail price per month of bouquet of pay channels, discounts, if any, offered on the maximum retail price to distributors, distribution fee, manner of calculation of ‘broadcaster’s share of maximum retail price’, genre of pay channel and other necessary conditions: Provided that a broadcaster may include in its reference interconnection offer, television channel or bouquet of pay channels of its subsidiary company or holding company or subsidiary company of the holding company, which has obtained, in its name, the downlinking permission for its television channels from the Central Government, after written authorization by them. Explanation: For the purpose of these regulations, the definition of “subsidiary company” and “holding company” shall be the same as assigned to them in the Companies Act, 2013 (18 of 2013). (3) Every broadcaster shall declare a minimum twenty percent of the maximum retail price of pay channel or bouquet of pay channels, as the case may be, as the distribution fee: H

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A Provided that the distribution fee declared by the broadcaster shall be uniform across all the distribution platforms. (4) It shall be permissible to a broadcaster to offer discounts, on the maximum retail price of pay channel or bouquet of pay channels, to distributors of television channels, not exceeding fifteen percent of the maximum retail price: Provided that the sum of distribution fee declared by a broadcaster under sub-regulation (3) and discounts offered under this sub- regulation in no case shall exceed thirty five percent of the maximum retail price of pay 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. F (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 G may, after giving an opportunity of being heard to such broadcaster, direct such broadcaster to modify the said reference interconnection offer and such broadcaster shall amend reference interconnection offer accordingly and publish the same within fifteen days of receipt of the direction. H

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(8) Any amendment to the reference interconnection offer shall be published in the same manner as provided under the sub- regulations (1), (2), (3), (4), (5) and (6) of this regulation. (9) In the event of any amendment to the reference interconnection offer by a broadcaster under sub-regulation (8), the broadcaster shall give an option to all distributors, with whom it has written interconnection agreements in place, within thirty days from the date of such amendment and it shall be permissible to such distributors to enter into fresh interconnection agreement in accordance with the amended reference interconnection offer, within thirty days from the date of receipt of such option, or continue with the existing interconnection agreement. C

xxx xxx xxx

10. Interconnection agreement between broadcaster and distributor of television channels.— (1) No broadcaster shall provide signals of pay channels to a distributor of television D channels without entering into a written interconnection agreement with such distributor of television channels. (2) No distributor of television channels shall distribute pay channels of any broadcaster without entering into a written interconnection agreement with such broadcaster. E (3) It shall be mandatory for a broadcaster and a distributor of television channels to enter into written interconnection agreement on a-la-carte basis for distribution of pay channels. xxx xxx xxx F

11. Territory of interconnection agreement.— (1) The interconnection agreement signed between a broadcaster and a multi-system operator shall include the following details for describing the territory for the purpose of distribution of signals of television channels – (a) the registered area of operation of the multi-system G operator as mentioned in the registration granted by the Central Government; (b) the names of specific areas for which distribution of signals of television channels has been agreed, initially, at the time of signing of the interconnection agreement; and H

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A (c) the names of the corresponding states/ union territories in which such agreed areas as referred in clause (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), B 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— C (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. D (3) Nothing contained in sub-regulation (2) shall apply if written objections with reasons from the broadcaster have been received by the multi-system 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 E of signals beyond the areas agreed under the clause (b) of sub- regulation (1).”

18Copy pinpoint18. The relevant clauses of the Tariff Order with which we are directly concerned are set out hereunder: “3. Manner of offering of channels by broadcasters.— (1) F Every broadcaster shall offer all its channels on a-la-carte basis to all distributors of television channels. (2) Every broadcaster shall declare —— (a) the nature of each of its channel either as ‘free-to-air’ or G ‘pay’; and (b) the maximum retail price, per month, payable by a subscriber for each of its pay channel offered on a-la-carte basis: Provided that the maximum retail price of a pay channel shall be H more than ‘zero’:

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Provided further that the maximum retail price of a channel shall be uniform for all distribution platforms. (3) It shall be permissible for a broadcaster to offer its pay channels in the form of bouquet(s) and declare the maximum retail price(s), per month, of such bouquet(s) payable by a subscriber: Provided that, while making a bouquet of pay channels, it shall be permissible for a broadcaster to combine pay channels of its subsidiary company or holding company or subsidiary company of the holding company, which has obtained, in its name, the downlinking permission for its television channels, from the Central Government, after written authorization by them, and declare maximum retail price, per month, for such bouquet of pay channels payable by a subscriber: Provided that such bouquet shall not contain any pay channel for which maximum retail price per month is more than rupees nineteen: D Provided further that the maximum retail price per month of such bouquet of pay channels shall not be less than eighty five percent of the sum of maximum retail prices per month of the a-la-carte pay channels forming part of that bouquet: Provided further that the maximum retail price per month of such E bouquet of pay channels shall be uniform for all distribution platforms: Provided further that such bouquet shall not contain any free-to- air channel: F Provided also that such bouquet shall not contain both HD and SD variants of the same channel. Explanation: For the purpose of this Order, the definition of “subsidiary company” and “holding company” shall be the same as assigned to them in the Companies Act, 2013 (18 of 2013). G (4) It shall be permissible for a broadcaster to offer promotional schemes on maximum retail price(s) per month of its a-la-carte pay channel(s): Provided that period of any such scheme shall not exceed ninety days at a time: H

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A 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 B 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. C (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 D 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 E capacity fee, per month, payable by a subscriber for availing a distribution network capacity so as to receive the signals of television channels: Provided that the network capacity fee, per month, for network capacity upto initial one hundred SD channels, shall, in no case, exceed rupees one hundred and thirty, excluding taxes: F Provided further that the network capacity fee, per month, for network capacity in the slabs of twenty five SD channels each, beyond initial one hundred channels capacity referred to in first proviso to sub-clause (1), shall, in no case, exceed rupees twenty excluding taxes: G Provided also that one HD channel shall be treated equal to two SD channels for the purpose of calculating number of channels within the distribution network capacity subscribed. (2) Every distributor of television channels shall offer all channels H available on its network to all subscribers on a-la-carte basis and

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declare distributor retail price, per month, of each pay channel A payable by a subscriber: Provided that the distributor retail price, per month, payable by a subscriber to a distributor of television channels for subscribing to a pay channel shall, in no case, exceed the maximum retail price, per month, declared by the broadcasters for such pay channel. B (3) Every distributor of television channels shall offer to all subscribers each bouquet of pay channels offered by a broadcaster, and for which interconnection agreement has been signed with that broadcaster, without any alteration in its composition and declare the distributor retail price, per month, for such bouquet payable by a subscriber: Provided that the distributor retail price, per month, payable by a subscriber to a distributor of television channels for subscribing to a bouquet of pay channels offered by the broadcaster shall in no case exceed the maximum retail price, per month, declared by the broadcasters for such bouquet of pay channels: Provided further 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 such bouquet shall not contain any free-to- E air channel: Provided also that such bouquet shall not contain both HD and SD variants of the same channel. (4) It shall be permissible for a distributor of television channels to F offer bouquet(s) formed from pay channels of one or more broadcasters 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: G

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: H

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A 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: B 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 C distributor of television channels while forming bouquet under this clause shall not break a bouquet of pay channels offered by a broadcaster to form two or more bouquet(s) at distribution level. (5) It shall be permissible for a distributor of television channels to offer bouquet(s) formed from free-to-air channels of one or more D broadcasters. (6) No distributor of television channels shall charge any amount, other than the network capacity fee, from its subscribers for subscribing to free-to-air channels or bouquet(s) of free-to air channels. E (7) Within the distribution network capacity subscribed, in addition to channels notified by Central Government to be mandatorily provided to all the subscribers, a subscriber shall be free to choose any free-to-air channel(s), pay channel(s), or bouquet(s) of channels offered by the broadcaster(s) or bouquet(s) of channels offered by distributors of television channels or a combination thereof: Provided that if a subscriber opts for pay channels or bouquet of pay channels, he shall be liable to pay an amount equal to sum of distributor retail price(s) for such channel(s) and bouquets in addition to network capacity fee. (8) Subject to sub-clause (1) of clause 4, a distributor of television channels shall not increase the network capacity fee for a period of six months from the date of such notification: Provided that a distributor of television channels, before making any change in the H

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network capacity fee, shall at least thirty days prior to the scheduled A change— (a) inform the Authority; and (b) inform the subscribers by running scroll on the channel.”

19Copy pinpoint19. In the judgment of Sundar,J., in the Division Bench of the B Madras High Court, a useful table is set out which not only states the provisions that have been challenged, but the specific ground on which they have been challenged. We, therefore, reproduce this table in our judgment:- “Provisions of the Interconnection Regulation which Regulate C content S l. P ro visio n G round N o.

1. 6(1) A ll c hann el s (p a y Imp inge s upon broadca st er's cha nnels a nd free -to -ai r abil it y to pa ckage a T V chan ne l. cha nnels) t o be offered on No such restric tion on b roadcast er a-l a-ca rte ba si s. und er C opyright Ac t. D

2. S ec ond proviso to 6(1) Imp inge s upon broadca st er's - B ouquet of pay c hannel s abil it y to pa ckage a T V chan ne l. shal l not h av e free-to-air No such restric tion on b roadcast er c hann el s. und er C opyright Ac t. - H D and S D varia n t of sam e channe l ca nnot be in sam e bo uq uet . E

3. P roviso to 7(2) - B undl ing Imp inge s upon broadca st er's of thi rd pa rty chann e ls abil it y to pa ckage a T V chan ne l. prohibi ted. No such restric tion on b roadcast er und er C opyright Ac t.

4. 7(4) - B ro ad ca st er c an of fer Di rect ly re gul ate s t he pri cing of a di scounts t o dis tribut or no t TV cha nnel , the reby also ex ceedi ng 15% of MR P . regula ting pric ing of i ndividua l programm es . F

5. F irst provi so to 7 (4) - S um Di rect ly re gul ate s the pri cin g of a of discount unde r 7(4 ) a nd TV cha nn el , the reby als o di st ributi on fe e under 7(3) regula ting pric ing of i ndividua l shall not ex ce ed 35 % of programm es . M RP.

6. 10(3) r/w 6(1) - M andat ory Imp inge s upon broadca st er's t o e nter i n to ag ree m ent freedo m t o offer pay chann els w it h DP O on an a-la-c arte only a s a pa rt of bouquet and n ot G basis for pa y c hannel s. as a-la -cart e. No such re strict ion on broadca st er un der opyri ght Ac t.

7. 11(2) - D e emed ext ension irec tl y i m pinge s th e of g eo gra phica l te rritory. broadc aster's ri ght under 19(2) to designa te t he geogra phica l te rritor y o f e xplo it ati on . H

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A Provisions of the Tariff Order which regulate content Sl . P ro v is io n G round No.

1. 3 (1 ) - A l l c h a n n el s to b e Im p i n g es upon b ro ad ca s te r's o ffe red o n a-l a -c arte b a si s ab i lit y t o p a ck ag e a T V c h an n e l . No s u ch re st ri cti o n on b r o a d c a st er unde r C o p y rig h t B A c t.

2. 3 (2 )(b ) - D e cl a rat io n o f Im p i n g es upon b ro ad ca s te r's M R P o f a- l a -ca rt e ch a n n el free d o m to o ffer p a y ch a n n e ls o n ly as a p ar t o f b o u q u e t an d n o t as a-l a -ca rte. N o s u c h re st ri cti o n o n b r o a d c as te r u n d e r C o p y rig h t A c t.

3. S e co n d p r o v is o to 3 (2 )(b ) - U n d er Se cti o n 3 3A rea d w it h C M R P o f all p a y c h a n n els to R u le 5 6 o f t h e C o p yr i g h t R u l e s , be u n i fo rm ac ro s s 2 0 1 3 , b ro ad c ast er h as th e rig h t t o d is trib u t io n p la tf o rm s . d e c id e s ep a rat e MRP fo r d iff e re n t ca teg o r y o f a u di e n ce .

4. Fi rst p ro v i so t o 3 (3 ) - Im p i n g es upon b ro ad ca s te r's B u n d lin g o f th i rd p a rty ab i lit y t o p a ck ag e a T V c h an n e l . ch an n e ls p r oh i b it e d . F or e x a m p le , th i rd p a rt y ch a n n els c a n n o t b e p art o f th e sam e b o u q u et. No su c h D res tri cti o n o n b ro ad c as t er u n d e r C o p y rig h t A c t .

5. S e co n d p ro v i so to 3 (3 ) - D ire ct ly re g u la tes th e p ric in g o f M R P o f p ay c h a n n e l in a T V ch a n n e l, th e re b y a ls o b o u q u et n o t t o e x c e ed IN R reg u l ati n g p r ic i n g o f in d iv id u a l 1 9 /- p r o g ram m es .

6. T h ird p r o v is o to 3 (3 ) - D ire ct ly re g u la tes th e p ric in g o f B o u q u et p r i ce s h al l n o t b e a T V ch a n n e l, th e re b y a ls o E le s s th a n 8 5 % o f th e s u m o f reg u l ati n g p r ic i n g o f in d iv id u a l a-la -ca rt e p r ic e s of p r o g ram m es . in d iv i d u al ch a n n els in t h e b o u q u et.

7. Fo u rt h p r o v is o t o 3 (3 ) - U n d er R u l e 5 6 o f th e C o p y rig h t M R P o f a ll b o u q u et s to b e R u le s, 20 1 3 , b ro a d c as te r h as th e u n ifo rm a cro s s d is tri b u tio n rig h t to d e c id e s e p ara t e M R P fo r p lat fo r m s . d iff e re n t ca teg o r y o f a u di e n ce .

F 8. Fi fth p rov i so to 3 ( 3 ) - Im p i n g es upon b ro a d c as te r's B o u q u et o f p ay ch a n n els ab i lit y t o p a ck ag e a T V c h an n e l . s ha ll n o t h a v e fr ee -to - air No s u ch re st ri cti o n on ch an n e ls . b r o a d c a st er unde r C o p y rig h t A c t.

9. S ix th p ro v is o t o 3 ( 3 ) - H D Im p i n g es upon b ro ad ca s te r's an d SD v a ria n t o f s am e ab i lit y t o p a ck ag e a T V c h an n e l . ch an n e l ca n n o t b e i n sam e No s u ch re st ri cti o n on b o u q u et. b r o a d c a st er unde r C o p y rig h t G A c t.

10. 3 (4 ) - R e st ricti o n on A ll t h e s e r es tri cti o n s im p i n ge p ro m o ti o n of b o u q u ets , b r o a d c a st er 's ab il it y to r es tric tio n on tim e, co m m e rci a ll y m o n et ize h is r es tric tio n o n freq u e n cy . co n t en t.

11. 4 (2 ) - D is tri b u to r t o o ffe r I n d ir ec tl y im p i n g e s u p o n th e all c h a n n el s o n a -l a -ca rt e b r o a dc a s ter ' s ri gh t to o ff er h i s b a s is . c h a n n e ls to t h e cu s to m ers o n ly as H a b o u q u et an d n o t as a -la -ca rt e.”

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20Copy pinpoint20. 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. 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 this growing imperative and the consequential need to provide easy access to all sections of the society to seek admission into theatre as per his paying capacity. Though the right to fix rates of admission is a business incident, the appellant having created an interest in the general public therein, it has become necessary for the State to step in and regulate the activity of fixation of maximum rates of admission to different classes, as a welfare weal. Thereby fixation of rates of admission became a legitimate ancillary or incidental power in furtherance of the regulation under the Act. Access to and admission into theatre is a facility and concomitant right to a cinegoing public. Classification of seats and fixation of rates of admission according to paying capacity of a cinegoer is also an integral power of regulation. Power to fix rates of admission includes power to amend and revise the rates from time to time. The statute vests that power in the licensing authority subject to control by the State G Government. The fixation of the rates of admission has thus become an integral and essential part of the power and regulation of exhibition of cinematograph.” (Emphasis supplied.) H

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21Copy pinpoint21. In BSNL v. TRAI, (2014) 3 SCC 222, this Court held: “80. After the Amendment of 2000, TRAI can either suo motu or on a request from the licensor make recommendations on the subjects enumerated in Sections 11(1)(a)(i) to (viii). Under Section 11(1)(b), TRAI is required to perform nine functions enumerated B in sub-clauses (i) to (ix) thereof. In these clauses, different terms like “ensure”, “fix”, “regulate” and “lay down” have been used. The use of the term “ensure” implies that TRAI can issue directions on the particular subject. For effective discharge of functions under various clauses of Section 11(1)(b), TRAI can frame appropriate regulations. The term “regulate” contained in sub-clause (iv) C shows that for facilitating arrangement amongst service providers for sharing their revenue derived from providing telecommunication services, TRAI can either issue directions or make regulations. xxx xxx xxx

D 83. In K. Ramanathan v. State of T.N. [K. Ramanathan v. State of T.N., (1985) 2 SCC 116 : 1985 SCC (Cri) 162] , this Court interpreted the word “regulation” appearing in Section 3(2)(d) of the Essential Commodities Act, 1955 and observed: (SCC pp. 130- 31, paras 18-20) E “18. 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. H

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“Regulate” is also defined as meaning to direct; to direct by A 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’s Third New International Dictionary, Vol. 2, p. 1913 and Shorter Oxford Dictionary, Vol. 2, 3rd Edn., p. B 1784.)

19. It has often been said that the power to regulate does not necessarily include the power to prohibit, and ordinarily the word ‘regulate’ is not synonymous with the word ‘prohibit’. This is true in a general sense and in the sense that mere regulation is not the same as absolute prohibition. At the same time, the power to regulate carries with it full power over the thing subject to regulation and in absence of restrictive words, the power must be regarded as plenary over the entire subject. It implies the power to rule, direct and control, and involves the adoption of a rule or guiding principle to be followed, or the making of a rule with respect to the subject to be regulated. The power to regulate implies the power to check and may imply the power to prohibit under certain circumstances, as where the best or only efficacious regulation consists of suppression. It would therefore appear that the word ‘regulation’ cannot have any inflexible meaning as to exclude E ‘prohibition’. It has different shades of meaning and must take its colour from the context in which it is used having regard to the purpose and object of the legislation, and the Court must necessarily keep in view the mischief which the legislature seeks to remedy. F

20. The question essentially is one of degree and it is impossible to fix any definite point at which ‘regulation’ ends and ‘prohibition’ begins. We may illustrate how different minds have differently reacted as to the meaning of the word ‘regulate’ depending on the context in which it is used and the purpose and object of the legislation. In Slattery v. Naylor [(1888) LR 13 AC 446 (PC)] G the question arose before the Judicial Committee of the Privy Council whether a bye-law by reason of its prohibiting internment altogether in a particular cemetery, was ultra vires because the Municipal Council had only power of regulating internments whereas the bye-law totally prohibited them in the cemetery in H

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A question, and it was said by Lord Hobhouse, delivering the judgment of the Privy Council: (AC p. 447) ‘A rule or bye-law cannot be held as ultra vires merely because it prohibits where empowered to regulate, as regulation often involved prohibition.’” B xxx xxx xxx

87. Reference in this connection can also be made to the 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) F on the subjects specified in sub-clauses (i) to (vi) of Section 11(1)(b). In fact, by framing regulations under Section 36, TRAI can facilitate the exercise of functions under various clauses of Section 11(1)(b) including sub-clauses (i) to (vi).

89. We may now advert to Section 36. Under sub-section (1) G thereof TRAI can make regulations to carry out the purposes of the TRAI Act specified in various provisions of the TRAI Act including Sections 11, 12 and 13. The exercise of power under Section 36(1) is hedged with the condition that the regulations must be consistent with the TRAI Act and the rules made thereunder. There is no other restriction on the power of TRAI to H

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make regulations. In terms of Section 37, the regulations are A required to be laid before Parliament which can either approve, modify or annul the same. Section 36(2), which begins with the words “without prejudice to the generality of the power under sub-section (1)” specifies various topics on which regulations can be made by TRAI. Three of these topics relate to meetings of B TRAI, the procedure to be followed at such meetings, the transaction of business at the meetings and the register to be maintained by TRAI. The remaining two topics specified in clauses (e) and (f) of Section 36(2) are directly referable to Sections 11(1)(b)(viii) and 11(1)(c). These are substantive functions of TRAI. However, there is nothing in the language of Section 36(2) C from which it can be inferred that the provisions contained therein control the exercise of power by TRAI under Section 36(1) or that Section 36(2) restricts the scope of Section 36(1).” (Emphasis supplied.)

22Copy pinpoint22. However, learned counsel for the appellants relied upon D Cellular Operators Assn. of India v. TRAI, (2016) 7 SCC 703 and, in particular, paragraph 41 thereof, which reads as follows: “41. We find that the impugned Regulation is not referable to Sections 11(1)(b)(i) and (v) of the Act inasmuch as it has not been made to ensure compliance with the terms and conditions of E the licence nor has it been made to lay down any standard of quality of service that needs compliance. This being the case, the impugned Regulation is dehors Section 11 but cannot be said to be inconsistent with Section 11 of the Act. This Court has categorically held in BSNL [BSNL v. Telecom Regulatory Authority of India, F (2014) 3 SCC 222] judgment that the power under Section 36 is not trammelled by Section 11. This being so, the impugned Regulation cannot be said to be inconsistent 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, G 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 H