An interesting drama is currently being played out in India, according to some the world’s second largest pay TV market. It pits pay-TV networks (copyright owners) against the broadcast regulator, the Telecom Regulatory Authority of India (TRAI).
TRAI, like all regulators, likes to regulate. That is what regulators do. TRAI regulates both telecommunications and broadcasting. In the broadcasting space, it imposes the terms of trade between broadcasting organisations (TV channel networks and distributors), establishes quality of service standards, lays out grievance procedures for consumers, imposes limits on equipment charges to consumers, and– most recently—proposes to issue tariff orders that establish the amounts, by specific genre, that broadcasting organisations can charge multichannel program distributors (e.g. satellite and cable platforms) for content. In other words, the regulator has interposed itself between the producer of content and the distributor of that content in order to override the market and establish a regulated price regime. This is what many would consider regulatory over-reach and a breach of copyright terms.
It is a well-established principle of copyright that the rights holder has the right to make available, or not, the content for which they hold the rights, and to establish the terms by which that content is made available. Not all content is created equal. Some content is worth more than others; it all depends on the product and the demand. But if price is to be determined through a bureaucratic rate-setting process, like a regulated utility, the very essence of copyright and the value of content are undermined. Or so contend a number of broadcast networks and content owners in India, represented by the Indian Broadcasting Federation, a position that is being currently considered by the Madras High Court.
The proceeding in the Madras Court was initiated by Star India and one of its group companies, Vijay Television Private Limited, on the premise that the Indian Copyright Act, being legislation of the central parliament, overrides the TRAI Regulations. In December, the Madras Court passed an order of status quo, in effect preventing TRAI from giving effect to the proposed regulations. TRAI has since appealed to the Supreme Court of India.
There is a lot at stake. TRAI of course will portray itself as defending the consumer by intervening to set maximum rates by genre, among others. This is a slippery slope. No matter how well intentioned or informed, it is difficult for a bureaucratic regulator to substitute for the dynamic of the market. Moreover it is an appropriation of the legitimate rights of the copyright holder to arbitrarily establish what a creative product is worth at a given time.
TRAI is not alone among regulators in seeking to intervene in the market. Recently in Canada the regulator (Canadian Radio-television and Telecommunications Commission, or CRTC) held hearings and issued a policy directive requiring that platforms establish a “skinny basic” package of channel offerings for consumers costing no more than $25 a month. There is however a big difference in that the CRTC did not mandate what would be in the basic package (beyond a minimum standard), nor did it try to establish the contracted price between program providers and distributors. Moreover, the CRTC does not regulate the price that companies charge consumers, as is made clear on its website.
In the end, the outcome of the new CRTC policy made little difference to consumers, the majority of whom found the basic packages unattractive, and who opted to stay with the bundles they were being offered by their programming provider. The lesson from Canada is that market intervention by the regulator does not necessarily result in a more satisfied consumer; market forces are far more likely to deliver the kind of results that consumers want and are willing to pay for.
Where will it end in India? The country is well known for its legacy of the “licence raj”, where reams of red-tape accompanied every business transaction, with the economy subject to the tyranny of the “babus”, the army of clerks that worked and still work at every level of government in India. India’s economic reforms of the past 25 years have sought to break the back of the licence raj, and to give freer play to economic forces and the private sector. Ironically, it was TRAI’s loosening of the tight reins of regulation in the telecom sector that allowed India’s mobile telephony revolution to take place. So effective was this deregulation that TRAI was also put in charge of the fractious broadcasting sector, which needed major reform. Somehow, however, the lessons of telecom deregulation never penetrated the psyche of TRAI’s broadcasting bureaucrats, the latest manifestation of which is the content tariff they introduced in October.
It is impossible to predict at this stage what the courts will decide. First the Supreme Court has to decide whether the Madras court’s stay of the regulations was premature given that the regulations were only in draft. If the regulations are upheld, there will be further legal challenges. India has robust copyright legislation but the Indian courts have made some recent decisions that have been distinctly unfriendly to rights holders, such as the decision last September to allow willy-nilly copying of publisher’s course packs by university copy shops under the guise of fair dealing, as I noted at the time in my blog. Further erosion of copyright in India would run counter to the goals of the Modi government to promote Indian innovation and creativity. There are many legitimate areas of intervention for a broadcast regulator. Substituting itself for the owner of copyrighted material should not be one of them.
© Hugh Stephens 2017. All Rights Reserved.