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(c) Kerala Communicators Cable Limited (KCCL) - Another MSO and a competitor of ADNPL, having similar arrangements with the SIPL.
Facts:
5. ADNPL submitted Information to the CCI alleging SIPL's abuse of dominant position and denial of market access to the ADNPL in violation of Section 4(2)(a)(ii) and Section 4(2)(c) of the Competition Act 2002 by entering into sham marketing agreements with KCCL. TRAI formulated and introduced the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations 2017 (for short, 'Interconnection Regulations 2017') and WP(C) NOs. 29766, 29767 2025:KER:36755 Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order 2017 (Collectively, New Regulatory Framework), under which the Maximum Retail Price (MRP) for each pay channel was fixed. The TRAI had a total discount of 35% of the MRP payable to distributors (split as 15% towards discount and 20% towards distribution fee). Under the TRAI regulatory framework, broadcasters are to treat distributors non-discriminatorily and offer discounts on fair and transparent terms to ensure a level playing field.
(vi) Pass any other order as it may deem fit."
6.1 The CCI, after considering the Information and materials available on record, noted the thrust of the allegations that SIPL offered additional discounts to select MSOs and KCCL, ADNPL's main competitor in Kerala. SIPL had placed MSOs like ADNPL at a huge disadvantage, which is detrimental to the competition and competitors in the market. Such conduct of the SIPL, which is the dominant player, would be violative of the provisions of Section 4 of the Competition Act, which also amounts to imposition of unfair and discriminatory prices and denial of market access to the Informant, besides distorting the level playing field in the marketplace and hindering the ability of the players to compete in an effective manner. 6.2 The CCI also observed that apparently KCCL was getting the channels at about 30% of the MRP, with about 70% discount WP(C) NOs. 29766, 29767 2025:KER:36755 (special discounts of up to 50% added with a distribution fee of 20%), whereas the maximum permissible discount under the New Regulatory Framework was capped at 35%. This indirect way of providing discounts to circumvent the New Regulatory Framework is by way of promotion and advertising payments to KCCL through high-value advertising deals. 6.3 The result of SIPL providing channels to KCCL at a discounted price was that Informant was constrained to price its channels higher than those of KCCL, ultimately losing its consumers, with a corresponding gain to KCCL. The Informant had to offer services at a loss-making price to retain the subscriber base, but in vain. ADNPL's subscriber base fell from 14.5 lakhs in April 2019 to 11.76 lakhs in September 2021, while the subscriber base of KCCL went up from 21.3 lakhs in April 2019 to 29.35 lakhs in September 2021.
11.3 The TRAI, in paragraph 18 of its Explanatory Memorandum to the 2017 Regulations, stipulated that TRAI, being a Sectoral Regulator of broadcasting services and cable services, had been entrusted with the task of ensuring a level playing field and fair competition in the sector and also ensuring that the interest of consumers and service providers are protected. Therefore, the TRAI had the power to look at all issues affecting competition in the market and to craft remedies for the same on an ex-ante basis.
11.4 The submission is that the TRAI Act, being a Self- Contained Code in the subject of telecom/broadcasting, and it being a subject of broadcasting, it covers every aspect of competition as well. The Competition Act in respect of the broadcasting service has become the general law on competition. The TRAI, being a Sectoral Regulator of broadcasting services and WP(C) NOs. 29766, 29767 2025:KER:36755 cable services, is entrusted with the task of ensuring a level playing field and fair competition in the sector to ensure that the interests of the consumers and the service providers are protected.