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Coimbatore based Cable TV operator Mr. M. Rajendran has approached the Competition Commission of India with a complaint to take action against M/S Tamil Nadu Arasu Cable TV Corporation Limited (Arasu)
Mr. Rajendran has preferred a complaint against Arasu for becoming monopoly in Cable TV services in all the NON-CAS areas (Except Chennai) of Tamil Nadu and abusing its dominant position. In its complaint dated 21-04-2012, Mr. Rajendran has given a picture on the importance of Television viewing in the state of Tamil Nadu and said that Tamil Nadu stands has the second largest cable TV homes in India with a market share of 14%, only next to Andhra Pradesh. The complaint would go to say that about 600 Multi System Operators (MSOs) were operational before the arrival of Arasu.
In its complaint against Arasu Mr. Rajendran has further told that the State Government of Tamil Nadu in August 2007 has announced its decision to start cable operations in Tamil Nadu and quoted a news article on the recommendation of the Telecom Regulatory Authority of India (TRAI) to disallow the State Governments from entering into broadcasting and cable TV sector. He has told that Arasu started control rooms in 5 places in the year 2008 and for the best of reasons known to it, it has become defunct.
The complaint further goes to narrate that after the change in the State Government in the state in May 2011, it took serious steps to revamp Arasu. It further recites that in order to threat the existing MSOs, Arasu by abusing the power of the State Government has raided the control rooms of all the operational MSOs with help of police and revenue officials to shut down their local channels which were otherwise run legally by them. Further, he has stated that Arasu has rolled out its signals on 2-09-2011 without any popular channels in its kitty and by cutting the trunk cables of the existing MSOs by force and thereby inserted its signals. This action has caused instantaneous death to over 600 MSOs in Tamil Nadu thereby Arasu achieved absolute monopoly.
The complaint has narrated the hardships faced by the operators like the complainant faced from the consumers due to lack of popular channels in Arasu’s package and as a result, many of the consumers have switched to DTH platform. The complaint says that instead of improving its services and providing the signals of consumer’s choice, Arasu by abusing its powers through the state Government has imposed 30% entertainment tax on DTH services.
Mr. Rajendran has said that by way of a press release dated 28-09-2011, Arasu has fixed the subscription charges as Rs.70/- per month to be collected from the consumer, arbitrarily without any consultation with the cable operators. Further, on 11-11-2011 by way of a press release, Arasu has threatened the operators for criminal action for collecting subscription charges over and above the said subscription. Further, the complaint states that the dictates of Arasu by being a monopoly MSO has also created hardships to the consumers. The complaint accuses Arasu that it has put its best of efforts to black out or fade away the channels supporting non-ruling parties and has curtailed the right of a consumer on plurality of views by infringing the right of freedom of expression of the Citizen which is otherwise guaranteed by the Constitution of India.
The complaint states that Arasu by adopting predatory pricing is ensuring that no other enterprises coming into business as its competitor and accuses that the thirst to maintain monopoly position and to dictate the entire Television contents in the state of Tamil Nadu has made Arasu to indulge in anti-competitive activities. Further it states that fixing re-sale pricing of the operators have turned the entire cable industry of Tamil Nadu into a sick one.
The compliant has highlighted the report of “The Comptroller and Audit General of Inda” (CAG) where it has slammed Arasu’s performance as a dismal one. The complaint has quoted the Herfindahl-Hirschman Index (HHI), a management tool to measure competition and went to prove that Arasu is having 100% absolute market concentration in the relevant market. The complainant has said that the dictates of Arasu has caused adverse effect on competition which would contravene sections 3 and 4 of “The Competition Act-2002”.
After giving the above information, the complainant has prayed before the “Competition Commission India” to take action against Arasu for the contraventions done by it and to direct for a detailed investigation. Further it has prayed the division of Arasu and impose maximum penalty against it.
The said complaint was taken on the file of “The Competition Commission of India”, New Delhi as case no. 23 of 2012. The hon’ble Commission after evaluating the complaint and being satisfied on existence of prima facie in the complaint has ordered for an investigation to its investigation wing headed by the Director General by way of its order dated 15-05-2012. The investigation of the said case is assigned to Mr. Sunil Kumar, Joint Director General, having office at “Office of the Director General, Competition Commission of India, ‘B’ Wing, HUDCO Vishala, 14, Bikaji Cama Place, New Delhi – 110 066, Ph.: 011-26701617”.
Mr. Sunil Kumar has summoned the complainant to appear before him on 25-06-2012 with additional information. However on a request, the personal appearance was adjourned to 28-06-2012 on which day the complainant appeared before the investigating authority and filed a set of additional information (supplement complaint)
In its supplement complaint, the complainant has highlighted that Arasu is caught with rampant corruption and enclosed a press release of the special thasildar of Arasu, Thiruvallur district, being arrested by Directorate of Vigilance and Anti corruption (DVAC) after getting caught red handed for accepting bribe from a cable operator. Further, the supplement complaint has quoted that the channel “Captain TV” run by Mr. Vijaykanth was blacked out in the constituency of “Puthkottai” during the recent by-election by Arasu to favour the ruling party.
The complainant has understood that the Joint director General, Mr. Sunil Kumar has summoned Arasu and various stakeholders in order to investigate the case further.
In the meanwhile having come to the knowledge of Arasu, on 28-07-2012 the district level administrator of Arasu Mr. Shanumuga Raj, the special thasildhar form a mobile other than his regular one by 11.30 a.m. has called Mr. Rajendran and asked him to withdraw the complaint before the CCI immediately and further said that he has made the request on instruction from the Manging Director of Arasu. Even without giving any opportunity to mull over the said request of the Thasildhar, the thasildhar has repeatedly given missed calls, when responded, this time with an intimidating tone to immediately withdraw the complaint and meet the Chairman of Arasu Mr. Rahul Krishnan who is coming to Pollachi in the evening and tender apology for preferring the complaint or otherwise would face dare consequence. In the mean while the signal link to Mr. Rajendran was cut by Arasu in order to arm twist him to withdraw the complaint.
The disconnection of the signals has blacked out about 500 homes in his operational area. Immediately on disconnection Mr.Rajendran has called the said thasildhar and asked about the disconnection in which reply he has said the disconnection was due to non-payment of subscription and for non-withdrawal of complaint before CCI. When Mr. Rajendran reminded about the TRAI Regulations for giving 21 days notice in writing before any disconnection the thashildhar has replied that he is not bound by the regulations of TRAI.
Mr. Rajendran has sent a telegram and representation by e-mail to the Managing Director of Arasu, Chairman TRAI, Chairman & members of Competition Commission of India, IT secretary Govt. of Tamil Nadu, the Chief Minister of Tamil Nadu highlighting the misdeeds of Arasu for preferring a complaint against arasu for its dominance in cable TV arena which is provided for him by law. Further, he is about to make a request to the commissioner of police, Coimbatore for adequate protection for his life and property.
Mr. Rajendran has preferred a complaint against Arasu for becoming monopoly in Cable TV services in all the NON-CAS areas (Except Chennai) of Tamil Nadu and abusing its dominant position. In its complaint dated 21-04-2012, Mr. Rajendran has given a picture on the importance of Television viewing in the state of Tamil Nadu and said that Tamil Nadu stands has the second largest cable TV homes in India with a market share of 14%, only next to Andhra Pradesh. The complaint would go to say that about 600 Multi System Operators (MSOs) were operational before the arrival of Arasu.
In its complaint against Arasu Mr. Rajendran has further told that the State Government of Tamil Nadu in August 2007 has announced its decision to start cable operations in Tamil Nadu and quoted a news article on the recommendation of the Telecom Regulatory Authority of India (TRAI) to disallow the State Governments from entering into broadcasting and cable TV sector. He has told that Arasu started control rooms in 5 places in the year 2008 and for the best of reasons known to it, it has become defunct.
The complaint further goes to narrate that after the change in the State Government in the state in May 2011, it took serious steps to revamp Arasu. It further recites that in order to threat the existing MSOs, Arasu by abusing the power of the State Government has raided the control rooms of all the operational MSOs with help of police and revenue officials to shut down their local channels which were otherwise run legally by them. Further, he has stated that Arasu has rolled out its signals on 2-09-2011 without any popular channels in its kitty and by cutting the trunk cables of the existing MSOs by force and thereby inserted its signals. This action has caused instantaneous death to over 600 MSOs in Tamil Nadu thereby Arasu achieved absolute monopoly.
The complaint has narrated the hardships faced by the operators like the complainant faced from the consumers due to lack of popular channels in Arasu’s package and as a result, many of the consumers have switched to DTH platform. The complaint says that instead of improving its services and providing the signals of consumer’s choice, Arasu by abusing its powers through the state Government has imposed 30% entertainment tax on DTH services.
Mr. Rajendran has said that by way of a press release dated 28-09-2011, Arasu has fixed the subscription charges as Rs.70/- per month to be collected from the consumer, arbitrarily without any consultation with the cable operators. Further, on 11-11-2011 by way of a press release, Arasu has threatened the operators for criminal action for collecting subscription charges over and above the said subscription. Further, the complaint states that the dictates of Arasu by being a monopoly MSO has also created hardships to the consumers. The complaint accuses Arasu that it has put its best of efforts to black out or fade away the channels supporting non-ruling parties and has curtailed the right of a consumer on plurality of views by infringing the right of freedom of expression of the Citizen which is otherwise guaranteed by the Constitution of India.
The complaint states that Arasu by adopting predatory pricing is ensuring that no other enterprises coming into business as its competitor and accuses that the thirst to maintain monopoly position and to dictate the entire Television contents in the state of Tamil Nadu has made Arasu to indulge in anti-competitive activities. Further it states that fixing re-sale pricing of the operators have turned the entire cable industry of Tamil Nadu into a sick one.
The compliant has highlighted the report of “The Comptroller and Audit General of Inda” (CAG) where it has slammed Arasu’s performance as a dismal one. The complaint has quoted the Herfindahl-Hirschman Index (HHI), a management tool to measure competition and went to prove that Arasu is having 100% absolute market concentration in the relevant market. The complainant has said that the dictates of Arasu has caused adverse effect on competition which would contravene sections 3 and 4 of “The Competition Act-2002”.
After giving the above information, the complainant has prayed before the “Competition Commission India” to take action against Arasu for the contraventions done by it and to direct for a detailed investigation. Further it has prayed the division of Arasu and impose maximum penalty against it.
The said complaint was taken on the file of “The Competition Commission of India”, New Delhi as case no. 23 of 2012. The hon’ble Commission after evaluating the complaint and being satisfied on existence of prima facie in the complaint has ordered for an investigation to its investigation wing headed by the Director General by way of its order dated 15-05-2012. The investigation of the said case is assigned to Mr. Sunil Kumar, Joint Director General, having office at “Office of the Director General, Competition Commission of India, ‘B’ Wing, HUDCO Vishala, 14, Bikaji Cama Place, New Delhi – 110 066, Ph.: 011-26701617”.
Mr. Sunil Kumar has summoned the complainant to appear before him on 25-06-2012 with additional information. However on a request, the personal appearance was adjourned to 28-06-2012 on which day the complainant appeared before the investigating authority and filed a set of additional information (supplement complaint)
In its supplement complaint, the complainant has highlighted that Arasu is caught with rampant corruption and enclosed a press release of the special thasildar of Arasu, Thiruvallur district, being arrested by Directorate of Vigilance and Anti corruption (DVAC) after getting caught red handed for accepting bribe from a cable operator. Further, the supplement complaint has quoted that the channel “Captain TV” run by Mr. Vijaykanth was blacked out in the constituency of “Puthkottai” during the recent by-election by Arasu to favour the ruling party.
The complainant has understood that the Joint director General, Mr. Sunil Kumar has summoned Arasu and various stakeholders in order to investigate the case further.
In the meanwhile having come to the knowledge of Arasu, on 28-07-2012 the district level administrator of Arasu Mr. Shanumuga Raj, the special thasildhar form a mobile other than his regular one by 11.30 a.m. has called Mr. Rajendran and asked him to withdraw the complaint before the CCI immediately and further said that he has made the request on instruction from the Manging Director of Arasu. Even without giving any opportunity to mull over the said request of the Thasildhar, the thasildhar has repeatedly given missed calls, when responded, this time with an intimidating tone to immediately withdraw the complaint and meet the Chairman of Arasu Mr. Rahul Krishnan who is coming to Pollachi in the evening and tender apology for preferring the complaint or otherwise would face dare consequence. In the mean while the signal link to Mr. Rajendran was cut by Arasu in order to arm twist him to withdraw the complaint.
The disconnection of the signals has blacked out about 500 homes in his operational area. Immediately on disconnection Mr.Rajendran has called the said thasildhar and asked about the disconnection in which reply he has said the disconnection was due to non-payment of subscription and for non-withdrawal of complaint before CCI. When Mr. Rajendran reminded about the TRAI Regulations for giving 21 days notice in writing before any disconnection the thashildhar has replied that he is not bound by the regulations of TRAI.
Mr. Rajendran has sent a telegram and representation by e-mail to the Managing Director of Arasu, Chairman TRAI, Chairman & members of Competition Commission of India, IT secretary Govt. of Tamil Nadu, the Chief Minister of Tamil Nadu highlighting the misdeeds of Arasu for preferring a complaint against arasu for its dominance in cable TV arena which is provided for him by law. Further, he is about to make a request to the commissioner of police, Coimbatore for adequate protection for his life and property.
