Supreme Court on TRAI’s Regulatory Powers (Part 2)

In my previous post, I had discussed the first issue that was discussed in Star India v DIPP, regarding the regulation of content by the impugned provisions. In this post, I will discuss the second issue concerning TRAI’s power to regulate content in light of potential conflicts with the Copyright Act, and discuss some relevant observations made by the court.

Issue 2: Does TRAI have the power to regulate content?

The determination of TRAI’s power to regulate content rested on two sub-issues – the meaning of ‘regulation’ under Section 36 of the TRAI Act and the interplay between the Copyright Act and TRAI Act.

On the first sub-issue, the court had to determine whether the term ‘regulation’ under Section 36 of the TRAI Act should be interpreted narrowly or broadly. The appellant’s contention was that the provisions should be interpreted narrowly to exclude power to prohibit since it is not explicitly permitted by the provision. The impugned provisions, which prohibit certain practices with respect to the sale of television channels would, therefore, be invalid.

While the court acknowledged that ‘regulation’ had been interpreted narrowly in the past (albeit in different contexts), it held that the term must be interpreted broadly in the present case. This is because TRAI’s power to regulate (including the power to prohibit) is being used to benefit the public. Therefore, ‘regulation’ in Section 36 does include the power to prohibit. The only restriction on the power to regulate under Section 36 is the requirement that they be consistent with the TRAI Act and the rules made under the legislation.

Further, the court relied on BSNL v TRAI to note that giving ‘regulation’ a restrictive meaning would stultify the very object of the act and prevent TRAI from fulfilling its objectives enumerated under Section 11(1)(b). Therefore, ‘regulation’ is to be interpreted broadly, so as to include the power to prohibit.

On the sub-issue regarding the interplay between the Copyright Act and TRAI Act, the court effectively held that TRAI had the power to regulate in territory occupied by the Copyright Act. That is, TRAI would be permitted to pass regulations that affect rights created under the Copyright Act. The court justified this by arguing that a harmonious construction of the two statutes would require the prioritisation of public welfare. Since the regulations passed by TRAI are in the interest of the customers as well as service providers, it would take precedence over the Copyright Act, which only serves the right holders. The court stated:

“We are, therefore, clearly of the view that if in exercise of its regulatory power under the TRAI Act, TRAI were to impinge upon compensation payable for copyright, the best way in which both statutes can be harmonized is to state that, the TRAI Act, being a statute conceived in public interest, which is to serve the interest of both broadcasters and consumers, must prevail, to the extent of any inconsistency, over the Copyright Act which is an Act which protects the property rights of broadcasters.”

To further buttress this finding, the court argued that the Copyright Act does not concern itself with the interest of the public because:

“[w]hen the definitions of broadcast in Section 2(dd) of the Copyright Act and of broadcasting services in Clause 2(j) of the impugned Regulation are compared, what is clear is that the words intended to be received by the general public either directly or indirectly are completely missing from the definition of broadcast contained in the Copyright Act. Also, Section 52(1)(b) of the Copyright Act indicates that transient or incidental storage of a work or performance purely in the technical process of electronic transmission or communication to the public is not an act that would constitute infringement of copyright.”

On the other hand, the court noted that TRAI benefits the public by considering the interests of the customers as well as service providers :

“TRAI Act has to focus on broadcasting services provided by the broadcaster that impact the ultimate consumer. The focus, therefore, of TRAI is that of a regulatory authority, which looks to the interest of both broadcaster and subscriber so as to provide a level playing field for both in which regulations can be laid down which affect the manner and carriage of broadcast to the ultimate consumers.”

Therefore, the court concluded that TRAI does have the power to regulate content, irrespective of the Copyright Act. In the context of the outcome of the case, this issue did not change much, since the court had already found that the impugned provisions do not regulate content.

Notes

Some additional aspects of this case that may be helpful to note –

• In its discussion on the applicable laws, the court noted that: “The TRAI Act, the Telegraph Act and the Indian Wireless Telegraphy Act, being statutes in pari materia, form a Code, insofar as wireless telegraphy and broadcasting is concerned.”
• The appellant argued that the mention of ‘content’ (as something that may be regulated) in the Cable Television Act, 1955, and the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 indicates that the absence of its use in TRAI Act means that content cannot be regulated by TRAI. However, the court held that these legislations were not relevant in interpreting the TRAI Act. In the context of the latter act, the court also noted that the mention of content was solely to fulfil its preambular objectives of ensuring access to sporting events of national importance.

Discussion

While the court did hold that TRAI may regulate content indirectly, it did not clarify whether it would hold a similar opinion if TRAI directly regulated content on grounds not otherwise prescribed in the Programme or Advertisement Codes in the Cable Television Network Rules 1994. While this may seem unlikely, there is nothing in the reasoning of the court that would prevent such extrapolation in cases where there is a conflict (to read further on the regulation of content in media, including television, click here and here).

Further, the harmonious interpretation offered by the court was based on two arguments – first, that the Copyright Act is solely geared towards protecting the rights of authors, and ignores the interests of the public, and second, that the regulations passed by TRAI are always in the interest of the public.

On the first argument, there exists significant jurisprudence on how copyright law should be interpreted to include the interests of the public. Describing Copyright Law as a regime that exists solely to protect the authors’ rights does not capture the various roles that it serves in society. It would, therefore, be incorrect to assert that the Copyright Act does not heed to the interests of the public as a blanket assertion and rely on this to favour the TRAI Act.

On the second argument, and perhaps less significantly, the court missed out on clarifying whether all regulations passed by TRAI will be assumed to be in the interest of the public, or whether this is a finding that will be made in each case. This point is important to note since it is not rare to find regulatory bodies making decisions or passing regulations that may have a detrimental impact on stakeholders. Given this possibility, it would be prudent for future courts to interpret this judgment to require a case to case analysis of whether the regulations passed by TRAI serve a public interest.

Image from here.