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Hotels to shell out more to broadcasting companies

Praveen K Singh - New Delhi

The members of the Hotel Association of India and Eastern International Hotels Ltd will have to pay more to broadcasting companies for satellite channels transmission at their premises.

Settling the dispute between hotel associations and broadcasting companies, the Telecom Disputes Settlement Appellate Tribunal (TDSAT) has decided that hotels cannot be deemed as subscribers or consumers of cable television feed and therefore are not covered by the tariff notification of Telecom Regulatory Authority of India (TRAI).

Delivering its order on January 17, 2006, TDSAT instructed hotels to join in separate agreements with cable content providers for receiving feed for transmission in hotel rooms.

The three member bench said, "We leave upon the respondents (broadcasting companies) to proceed against the petitioners, (hotel) association and its members, for the recovery of the legitimate amount due to them for the receipt of the signals by the members of the petitioners' association. If the members of the petitioners' association have paid the subscription to the authorised agent/distributor/multi-system operator (MSO) of the respondent broadcasters, then that will be treated as legitimate payment. However, where such subscription has been paid to an unauthorised distributor or MSOs or cable operators, it will be open to the respondent broadcasters to raise demands directly from the members of the petitioners' association."

TDSAT has also said that since TRAI has set the tariff for domestic consumption of cable content, they should also consider fixing the tariff for commercial usage of the feed. It says that such an effort would end confusion on various usages of cable feed.

The dispute basically pertains to the fact that according to the hotel associations in both cases, these hotels and restaurants cannot be equated with domestic consumers for the provision of cable TV service. Since this service is being used by petitioners as a public service for commercial purposes, the rates for this service have to be different than those laid down for domestic users. Accordingly, the broadcasters had increased the subscription rates of the cable connections being provided at hotels and had either disconnected some subscribers or had threatened to disconnect the others.

Earlier in 2005, the hotel associations were in dispute with major broadcasters like Zee Turner, Star Sports, Discovery, and Sony over outstanding payments.These broadcasting companies have gone to court and were carrying out serious searches in hotels with the help of the police. The hoteliers, on the other side, have taken their case to the TDSAT.

Some of the star rated properties have already started paying commercial rates for cable TV feed, but budget hotels have deliberated to contest it out. A leading five-star hotel in the city, which was paying Rs 16,000 a month for cable in 400 rooms, now pays around Rs 20 lakh.

"The contract between broadcasters, cable operators and MSOs allows them to offer the feed only to domestic consumers. As per the rule, they do not have any right to supply to commercial establishments like hotels, hospitals, pubs and restaurants," cites lawyer Aditya Narain, who represented a broadcasting company.