NEW DELHI: In a significant judgment that will impact the entire DTH industry, TDSAT today asked Zee Turner to make available 19 channels from its bouquets 1 and 2, observing also that Zee has not been able to convince it about a regulatory obligation of "must carry" on DTH operators.

The sector tribunal further ruled that the DTH player is well within its rights to demand only 19 channels out of the 32 in the Bouquets 1 and 2 offered by Zee.

Calling this an "explosive" decision, TataSky‘s legal experts asserted that this is a crushing defeat for Zee, which has been "trying to thrust all its channels on us".

The major issue of "must carry" has not been opined upon by the judges, as they made clear in their judgment, but legal circles here are abuzz over the implications that no broadcaster now can try to force a DTH player to take "all or none", and hence, the must carry contention, which had been one of major Zee‘s arguments, is not an obligation as per this decision.

The court, importantly, has held that in the interests of consumers being given full choice, no DTH operator can be forced to carry all the channels of all the broadcasters, because of constraints of transponder space, a major issue so long hanging fire.

The court has also asked Trai once again to fix tariff of channels on DTH platforms.

It has asked Zee Turner to supply signals of these 19 channels to TataSky at 50 per cent of the price the broadcaster offers to the cable operators, and has directed Trai once more to fix the channel tariffs for the DTH operators, a persistent TataSky demand in the present case arguments.

TDSAT has virtually demolished the arguments of Zee, especially on the issue of what the latter stated was a "must carry provision" inherent in the Trai regulations.

Zee had raised the point that clause 7.6 of the regulation implied that there is in place a "must carry" provision, which made it mandatory for the DTH players to carry all the channels a broadcaster has on offer in all its bouquets put together, which TataSky had disputed.

In its final ruling, TDSAT has said that so far as the case in hand is concerned, the issue of must carry did not arise.

However, its observations on Zee‘s arguments are scathing.

"We are unable to read a ‘must carry‘ provision in clause 7.6. A plain reading of clause 7.6 suggests that the obligation is cast on a Licensee to provide access to various content providers / channels on a nondiscriminatory basis.

"As per this clause, therefore, the Licensee is not the seeker of channels. The broadcasters or the content providers have to approach the Licensee for providing access on its platform for their channels and then the Licensee is required to do so on a nondiscriminatory basis."

This is exactly what senior counsel for TataSky, Ramji Srinivas, had stressed in the last phase of his arguments.

"This clause also does not say that a Licensee must carry all the channels of a particular content provider. Therefore, we are unable to see how an argument that a Licensee must carry all the channels of a broadcaster can be, advanced on the basis of the provision contained in clause 7.6 of the Licence," the court said.

"Further, it must be noted that the interpretation suggested by the learned counsel for the respondent in clause 7.6 of the Licence is totally irrational because it overlooks the fact that it will choke the DTH operator if it has to carry all the channels of every broadcaster.

"A DTH operator naturally will provide access to every broadcaster because every broadcaster is supposed to have some popular channels which a DTH operator is likely to include on its platform.

"If a DTH operator has to take all the channels of every broadcaster, it may not be physically possible to do so. Moreover, if every channel has to be taken it means that it will have to be paid for.

"This will increase the cost for the DTH operator. Ultimately, the cost will get passed on to the consumer. If DTH becomes expensive, consumers will keep away from it. It will not be able to compete with CAS or cable. Thus, such an interpretation of clause 7.6 may be anti consumer," the court observed.

While these are the issues that will impact the entire DTH industry and its relations with the broadcasters, the specifics of the TataSky versus Zee Turner case, which centred around the latter insisting that TataSky was obliged to take all its 32 channels, the court ruled in favour of the latter.

"… during the course of hearing we repeatedly asked the counsel appearing for respondents, if there is any documentary evidence to show that Zee Turner had offered 32 channels comprising five bouquets to the petitioner at any time before the TDSAT judgment dated 14th July, 2006 in Petition No.136 (C ) of 2006 ASC Enterprises Ltd. vs. Star India Private Ltd..

"The learned counsel was frank enough to state that there was none," the court stated after review of all relevant letters and Emails exchanged between the parties over the period of dispute.

"The parties have placed before us a bulky record but there is nothing therein which supports this argument being advanced by counsel for respondents that Zee Turner was offering 32 channels to the petitioner during negotiations prior to the judgment of this Tribunal dated 14th July, 2006.

"There is complete silence as to when 19 channels of respondent 1 became 32. It appears that respondents got wiser after the TDSAT judgment, believing that on its basis the DTH operator could be asked to take all the channels which the broadcaster had to offer.

"Reason for us to think so is that in the short reply filed in these proceedings on 24th July, 2006, the respondent 1 for the first time stated that it was authorized to provide signals of 32 channels at a rate of Rs 149.85 excluding taxes.

"The sequence of events clearly shows that after the said judgment of this Tribunal of 14 July 2006 the respondents for the first time started saying that they were authorized for 32 channels as they wanted to thrust all the 32 channels on the petitioner," the court stated.

The court finally ruled: "As a result of the above discussion, this petition is allowed and we direct the respondents to provide signals for 19 channels forming part of bouquets 1 and 2 of respondent 1 to petitioner.

"We further direct respondent 1 to provide these signals to the petitioner on reasonable and nondiscriminatory terms which should include charges at 50 per cent of the declared list price of respondent 1 for these 19 channels.

"We also declare that respondents have defaulted in providing signals to the petitioner on nondiscriminatory basis."