DEN Network JVs illegally changed Zee LCNs : TDSAT

The Telecom Disputes and Settlement Appellate Tribunal (TDSAT) hearing Zee Entertainment‘s petition has ruled that two Den Network JVs DEN ADN Network and CCN DEN Network had illegally changed the LCN of Zee Entertainment’s channels and directed it to reverse the change it had made earlier.

Zee Entertainment had raised the issue of displacement of its channels Logical Channel Number (LCN) by the MSOs prematurely before the completion of one year from the allocation of the LCN in violation of the Clause 18(4) of the Interconnection Regulations 2017 and Clause 12(iv) of the Interconnection Agreement.

The tribunal noted that there was no controversy on basic facts and that both petitions were based on identical facts and only the date of displacement of LCNs differed. It noted that the current agreement between the parties was executed on 25 January effective 1 February. The preceding agreement filed by DEN Network was for the term May 2018 – April 2019 but had admittedly come to an end on 31 January due to the implementation of the New Tariff Order.

The preceding agreement provided for a discount of Rs 55 crores on the MSO fulfilling its obligations relating to carriage, packaging, and LCOs. The tribunal extracting Clause 18 of the Interconnection Regulations 2017 noted that the DPO had to mandatorily place channels in its EPG on the basis of genre and language. It also has to assign an LCN which there after should not be altered for a period of one month from the date of such assignment. But the stipulation will cease to apply if the channel becomes unavailable on the distribution network or if the broadcaster changes the genre of a channel.

Zee submitted that the previous agreement was with another entity before the new regulations and was not for a one year period due to monetary considerations and earning a discount of Rs 55 crores. So till the previous agreement was in force, Zee’s channel was not legally available on the distribution network of DEN ADN and CCN DEN and in any event the LCN could not have been changed till the agreement was in place.

The Tribunal noted that as per the new regime the date of assignment of LCN cannot be earlier than 01 February 2019 as TRAI had issued Press Note on 28.12.2018 which required new agreements to come in force from 01 February. The one year LCN lock-in period would have come in then only. Zee pointed out that Den’s JVs were not legally obliged to disturb the LCNs of petitioner’s channels at least for one year i.e January 2020.

In its response, DEN ADN and CCN DEN submitted that Zee’s channels were already available on its platform with the same LCN that was left unchanged on 30.04.2019, even after the lapse of its last assignment. It said that the new regime came into effect on 03.07.2018 when TRAI notified it and hence LCN assignments, even if counted from that date was more than one year old.

They also pointed out that the current agreement doesn’t mention when the period of one year shall begin and that the date of agreement cannot be taken as the date of assignment as the broadcaster had the power to amend or issue fresh RIOs after 30 days notice and had already issued at least 6 new RIOs from Dec 2018 to June 2019. The tribunal noted that this submission overlooked the fact that the RIO can not be for less than a year.

DEN pointed out that TRAI’s Press Note allowed further migration time but didn’t specify the date of the LCN assignment. It submitted that it came into effect after the stay was lifted by the courts and hence all timelines commenced from 03.07.2018. It said that further time by TRAI for migration didn’t affect the coming into force of new regulations. It relied on the judgment of Delhi High Court wherein it has been held that after issuing a notification, the Government can’t assume further powers to withdraw the notification so as to nullify the Act.

TDSAT found more force in the submissions of Zee on careful consideration of rival contentions. It accepted Zee’s stand that the LCN can only be assigned when the channels become available for the network on the execution of the agreement. It noted that the extension of migration time directly protects the earlier regime.

As the new regulations bar placement agreements, there could be no freedom to MSO to assign the LCN for one year period until the old contractual obligations came to an end. The court noted that the new regulation mandated a one-year lock-in period for LCN even after reassignment due to the availability of channels on account of renewal of agreement/fresh agreement under the new regime.

Finding merit in Zee’s claim TDSAT ruled that DEN ADN and CCN DEN had illegally changed Zee channels LCN before the expiry of the prescribed period of minimum one year which has to be counted from 01 February 2019 when the new regulations came into effect. It directed that Zee’s channels should be restored to the earlier LCN forthwith and in any case within two days from the order date.

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