Introduction
In Union of India v. BCCI & Ors. [Civil Appeal No. (S) 10732-10733 of 2017], the Supreme Court of India has upheld a 2015 decision of the High Court of Delhi in favour of the Board of Control for Cricket in India (“BCCI”) and Star India Pvt. Ltd. (“Star”), which ruled that Prasar Bharati, the operator of national broadcaster Doordarshan (“DD”) and All India Radio (“AIR”), could air the feed that it receives from private sports broadcasters with respect to ‘sporting events of national importance’ only on Prasar Bharati’s terrestrial network and DTH platform - Free Dish, and not on private cable networks and other DTH platforms in India.
Facts
The original case was filed against Prasar Bharati in 2007 by Nimbus Communications Ltd. and the BCCI. The catalyst for the dispute was a marriage of convenience favouring Prasar Bharati between the –
(i) ‘must share’ obligation on sports broadcasters of mandatory sharing of broadcast feed with Prasar Bharati under Section 3 (1) of the Sports Broadcasting Act; and
“3. Mandatory sharing of certain sports broadcasting signals.– (1) No content rights owner or holder and no television or radio broadcasting service provider shall carry a live television broadcast on any cable or Direct-to-Home network or radio commentary broadcast in India of sporting events of national importance, unless it simultaneously shares the live broadcasting signal, without its advertisements, with Prasar Bharati to enable them to re-transmit the same on its terrestrial networks and Direct-to-Home networks in such manner and on such terms and conditions as may be specified.”
(ii) ‘must carry’ requirement on cable operators in India under Section 8 of the Cable Act which mandates all cable operators in India to carry two DD channels.
“8. Compulsory transmission of certain channels.—(1) The Central Government may, by notification in the Official Gazette, specify the names of Doordarshan channels or the channels operated by or on behalf of Parliament, to be mandatorily carried by the cable operators in their cable service and the manner of reception and re-transmission of such channels: Provided that in areas where digital addressable system has not been introduced in accordance with the provisions of sub-section (1) of section 4A, the notification as regards the prime band is concerned shall be limited to the carriage of two Doordarshan terrestrial channels and one regional language channel of the State in which the network of the cable operator is located.
The BCCI and Nimbus had moved the Delhi HC to –
(i) direct the GoI and Prasar Bharati to ensure encryption of DD’s satellite transmission feed of the BCCI’s matches; and
(ii) direct all DTH networks, television networks, multi-system operators and cable operators in India to obtain a license from the content owner/rights-holder prior to broadcasting such events.
The matter was dismissed by a single Judge of the Delhi HC on the grounds that it was a matter of policy, and therefore beyond judicial scrutiny. Undeterred, the BCCI and Nimbus also filed various petitions seeking to strike down:
- Section 3 of the Sports Broadcasting Act with respect to Test matches,
(ii) a GoI notification dated 13th September 2000 which instructed all cable operators to mandatorily carry DD1 and DD News channels,
(iii) two GoI notifications from 2007 with respect to ‘sporting events of national importance’ in cricket, and
(iv) a GoI order dated 29th May 2007 which introduced clause 7.9 into the License Agreement for DTH service providers, requiring them to mandatorily carry the DD channels mentioned above on their DTH platforms.
Following the grant of BCCI related broadcast rights to Star in 2012, Star and ESPN Software India Pvt. Ltd. intervened in the matter in 2013. Around the time of the ICC Cricket World Cup 2015, a division bench of the High Court of Delhi ruled in favour of Star, and held that signals received by Prasar Bharati through mandatory sharing should not be broadcast on such DD channels that are required to be mandatorily carried by cable operators. On appeal, as the start of the ICC Cricket World Cup 2015 was imminent, the Supreme Court, in public interest, permitted Prasar Bharati to share Star’s feed of the event on the must-carry channels for private cable operators. Further, the Supreme Court also instructed Prasar Bharati to consider a proposal by Star that Prasar Bharati should create a separate channel for sharing feed from the ICC Cricket World Cup 2015. Lastly, the Supreme Court also instructed the parties to submit accounts for the anticipated losses from having to share feed from nine matches that were considered to be of ‘national importance’.
Background
Sports Broadcasting
Until the Indian economy was liberalised in 1991, sports broadcasting in India was a monopoly of DD, then operated by the Ministry of Information & Broadcasting (“MIB”), Government of India (“GoI”). As a matter of practice, DD required the organisers of sports events in India who wished to broadcast their events in India to (i) bear the expenses incurred by DD with respect to the production of content, and (ii) pay DD for broadcasting the content, while at the same time retaining all advertising revenues generated through the broadcast.
The legal jurisprudence around sports broadcasting in India has been largely tempered by disputes relating to the grant of cricket-related broadcast rights, exclusively to private broadcasters. In The Secretary, Ministry of Information and Broadcasting v. Cricket Association of Bengal [AIR 1995 SC 1236], the Supreme Court recognised the right of private bodies in India to grant exclusive telecast rights for a sports event to the Indian territory in favour of private television channels and to the exclusion of DD. In Citizen, Consumer & Civic Action Group and others v Prasar Bharati and Others [Writ Petition 5491-5492/2004] the High Court of Madras instructed Ten Sports to share its broadcast feed for retransmission on DD, subject to certain conditions. This marked the first instance in which the principle of mandatory sharing of sports signals was recognised in the Indian context.
Pursuant to this ruling, the MIB issued the Policy Guidelines for Downlinking of Television Channels 2005, mandating all sports broadcast rights-holders with rights to ‘national and international sporting events of national importance’ in India to share their feed with Prasar Bharati. In 2007, in the backdrop of the dispute between Prasar Bharati and Nimbus over the latter’s refusal to share its live feed of the India vs. West Indies ODI series, the GoI hastened the promulgation of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Ordinance, 2007. Subsequently, the Ordinance was repealed when the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Bill was introduced in and was passed by the Parliament of India in March 2007 as the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 (the “Sports Broadcasting Act”).
In brief, Section 3 of the Sports Broadcasting Act provides that no content rights holder/owner or television/radio broadcasting service provider can telecast live within the territory of the Republic of India a “sporting event of national significance”, unless it simultaneously shares the live broadcast signal with Prasar Bharati enabling retransmission by Prasar Bharati on television and on radio. In Star Sports India Private Limited vs. Prasar Bharati and Ors., [S.L.P. (Civil) No. 8988 OF 2014] the Supreme Court had ruled that all private broadcasters were required to provide the live broadcast signals to Prasar Bharati devoid of any advertisements or commercial insertions, even if they formed part of the feed provided to the broadcaster by the event organiser.
To compensate rights-holders for loss of revenue, the Sports Broadcasting Act provides for sharing of advertising revenue derived from the retransmission between the content rights owner or holder and Prasar Bharati in the ratio of not less than 75:25 in case of television coverage and 50:50 in case of radio coverage.
Cable Networks
The entry of private broadcasters into India also necessitated the enactment of the Cable Television Networks (Regulation) Act, 1995 (Cable Act), that provides the framework for the regulation of cable networks and broadcast content in India. The regulation of cable television networks under the Cable Act is sought to be undertaken through -
(i) compulsory registration for all cable television network operators in India as per the procedure prescribed in Section 5 of the Cable Act;
(ii) regulation of content to be broadcast by the cable operator, through a variety of means – transmission/retransmission of a pay channel programme, specifying the Prasar Bharati channels to be mandatorily carried by all cable operators, inclusion of such channels in the basic service tier of channel packages, the maximum amount which can be charged by cable operators to subscribers, publication of subscription rates for pay channels, advertisement codes, programme codes, and the use of standard equipment in cable television networks.
Decision
In the present matter, BCCI and Star’s main objection was that as most sports content was broadcast on DD1, this led to cable network operators receiving live feeds of marquee sports events free of cost, and not from sports broadcasters, resulting in loss of subscription and advertising revenues for sports broadcasters in India. Star further argued that while they had no objections to the telecasts being carried on Prasar Bharati’s terrestrial channels and its DTH service, Prasar Bharati was misusing the provisions of the Sports Broadcasting Act by making the mandatory share feed available to private cable operators and DTH service providers. The final arguments rested on the fact that telecast of cricket matches was akin to the production of a Cinematograph Film under the Copyright Act, 1957, and therefore, the rights of the BCCI (as the author of the copyright) and of Star (as the official licensee) would be severely curtailed if the provisions of the Sports Broadcasting Act were not interpreted strictly.
Prasar Bharati defended its use of the broadcast feed on private cable network and DTH platforms on the grounds that the cumulative effect of the Prasar Bharati Act 1990, the Sports Broadcasting Act and the Cable Act was to provide viewing and listening access to marquee sports events to as large an audience as possible. Home Cable Network Pvt. Ltd. and the Sopan Foundation supported the arguments on the grounds of Article 19 (1) of the Constitution of India.
In essence, the question before the Supreme Court was whether the scope of the ‘must share’ obligation under the Sports Broadcasting Act, was widened beyond the ambit provided for in the Sports Broadcasting Act, by the ‘must carry’ requirement under the Cable Act. In reaching its verdict, the Supreme Court held that in the absence of any ‘legislative intent’ to this effect, Section 3 of the Sports Broadcasting Act would continue to operate independent of the stipulations under Section 8 of the Cable Act, and therefore Prasar Bharati could only use the mandatory feeds on its terrestrial network and DTH platform, a literal interpretation of Section 3.
The Supreme Court also observed that its decisions would not in any manner impair the exercise of Prasar Bharati’s rights under Section 12 (3) (c) of the Prasar Bharati Act, which provides Prasar Bharati with the right to “to negotiate for purchase of, or otherwise acquire, programmes and rights or privileges in respect of sports and other events, films, serials, occasions, meetings, functions or incidents of public interest, for broadcasting and to establish procedures for the allocation of such programmes, rights or privileges to the services;”
Conclusion
The ever-increasing values for sports broadcast rights, most recently exemplified by the acquisition of global broadcast rights across platforms by Star for USD 2.5 billion, place a very high burden on sports broadcasters to recover their investments. Very few broadcasters come out of such demands unscathed. Over the past few years, the Indian sports broadcasting market has been reduced to a virtual duopoly.
From a broadcasters’ perspective, the commercial impact of meeting the statutory requirements with respect to mandatory sharing in India is three-fold - (i) inadequate compensation under the Sports Broadcasting Act, (ii) cost of providing a clean feed under the Sports Broadcasting Act, and (iii) reduction in subscription and advertising revenue as a result of the leakage arising from the use of the free feed under the Sports Broadcasting Act with the mandatory carriage of DD channels under the Cable Act. An added risk to private broadcasters in India is the current TRAI proposal to cap/fix the rates that broadcasters may charge for their pay channels, a matter that is pending before the High Court of Madras.
As a result of the decision, and in keeping with the court’s observations, Prasar Bharati may choose to (i) de-notify one of its mandatory channels or (ii) create a new non-mandatory channel to air sports content or shift all sports content to DD Sports. Alternatively, the Sports Broadcasting Act could be amended to ensure that the necessary ‘legislative intent’ is provided to enable DD to re-transmit the shared feed on its mandatory channels, on private cable networks and third party DTH platforms.
At a larger level, perhaps the issue of mandatory sharing needs to be explored in new light. To reiterate, the avowed aim of the Sports Broadcasting Act is “to provide access to the largest number of listeners and viewers, on a free to air basis, of sporting events of national importance.” Until now, this line of argument has been used by Prasar Bharati to justify the principle behind ‘mandatory sharing’. The numbers undoubtedly support this claim. DD’s channels are accessible to 92% of the population of India, through a combination of terrestrial, cable and DTH platforms. To provide context, DTH platforms currently have 90 million users in India, while there are close to 100 million cable network subscribers in India.
A couple of recent developments may significantly alter the sports broadcasting industry in India, especially DD’s role in broadcasting “sporting events of national importance”. In July 2017, Star launched Star First, India’s first private free-to-air sports channel, interestingly on Prasar Bharati’s free-to-air DTH platform – Free Dish. If other broadcasters were to follow suit and ensure that “sporting events of national importance” were available free-to-air (therefore depending purely on an advertising-based model, and not a subscription-cum-advertising driven model), this would considerably weaken DD’s legal basis for retransmission of the shared sports feeds on its DTH platform. Therefore, arguably, DD’s remit under the Sports Broadcasting Act would be limited to retransmission on the terrestrial network, which is exclusively DD’s domain. Further, in February 2017, TRAI recommended (i) the migration of all terrestrial networks from analog to digital, beginning in 2019, and (ii) permitting private players to participate in digital terrestrial transmission. Any decision to this effect would further erode the argument and basis for mandatory sharing of signals in India.
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