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CASE NO.: Appeal (civil)  5524 of 2005

PETITIONER: Star India Pvt. Ltd

RESPONDENT: Sea T.V. Network Ltd. & Another

DATE OF JUDGMENT: 03/04/2007

BENCH: ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT: J U D G M E N T

KAPADIA, J.

    Being aggrieved by the direction issued  by the Telecom

Disputes   Settlement  &  Appellate  Tribunal  on  24.8.2005

ordering  Star India Pvt. Ltd. \023appellant herein\024 to  supply

signals  of  its  bouquet of channels by  entering  into  an

Agreement  with  Sea  T.V.  Network  Ltd.  (respondent  No.1

herein)   on  such  terms  and  conditions  which  are   not

unreasonable, Star India Pvt. Ltd. has come to this Court by

way of this civil appeal.

    Star  India Pvt. Ltd. is a company under the  Companies

Act,  1956.  On 8.2.2005 Star India Pvt. Ltd.  entered  into

Distributor   Agreement   with  Moon   Network   Pvt.   Ltd.

(respondent  No.2).  M/s Moon Network Pvt.  Ltd.  under  the

Agreement was a distributor. Under the said Agreement  there

was  a recital. Under that recital Star India Pvt. Ltd.  had

stated  that  it  was  an  authorized  distributor  of   the

Satellite T.V. channels namely Star Plus, Star Movies,  Star

World,  Star News, Star Gold etc.  collectively referred  to

as  New Channels Bouquet.  Under the Agreement  Moon Network

Pvt.  Ltd.  a Multi-System Operator (for short  \021MSO\022)   was

engaged  in  the  business of transmission  of  TV  channels

through  cables. Under the Agreement Moon Network Pvt.  Ltd.

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was  described  as a distributor.  Under the said  Agreement

Star  India Pvt. Ltd.  appointed Moon Network Pvt. Ltd.   as

the   distributor  on  a  sole  and  exclusive  basis.   The

distributor  was  required  to  distribute  the   subscribed

channels  in the territory of Agra. Moon Network  Pvt.  Ltd.

was thus appointed as the sole and exclusive distributor  of

the  subscribed channels through the cable network owned  by

it  and  operated by it  in the territory of  Agra.   It  is

interesting  to  note that under the Agreement,  Star  India

Pvt.  Ltd.   excluded  the distribution  of  the  subscribed

channels  through  DTH, CAS, Broadband or any  medium  other

than through a ground cable network. The said Agreement came

into  effect from January 1, 2005.   The Agreement is  valid

up  to  June  30,  2007,  unless  terminated  in  accordance

therewith.  Under the Agreement Moon Network Pvt. Ltd. could

execute   an  affiliation   agreement  directly   with   its

affiliate(s) in such form and manner to be approved by  Star

India Pvt. Ltd.  Under the Agreement Moon Network Pvt.  Ltd.

could use publicity material given to it by Star India  Pvt.

Ltd.   Under the Agreement Moon Network Pvt. Ltd. agreed  to

employ  competent staff and/or independent contractors   for

the  purpose  of  the  contract. Under  the  Agreement  Moon

Network Pvt. Ltd. was recognized by Star India Pvt. Ltd.  as

a  MSO  engaged  in  the  business of transmission  of  T.V.

channels  through ground cables.  Under clause 6.3  of  that

Agreement   it was clarified that Star India Pvt. Ltd.  made

no representations and/or warranties relating to continuity,

content and the reception quality of the programmes  on  the

subscribed channels and  that Star India Pvt. Ltd. will  not

be  responsible if a Delivery Failure is caused  by  factors

not  directly  within the control of Star  India  Pvt.  Ltd.

Under  the Agreement  Star India Pvt. Ltd. agreed to deliver

the  \021Decoders\022  to the distributor Moon Network  Pvt.  Ltd.

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However,  under  the Agreement it was stipulated  that  Moon

Network  Pvt. Ltd. in turn would not re-sell  or  act  as  a

dealer in respect of the said Decoders.  Under clause 16  of

the Agreement the parties agreed that Moon Network Pvt. Ltd.

as  a distributor will act as an independent contractor  and

that   the   Agreement  shall  not  create   principal-agent

relationship between Star India Pvt. Ltd.  and Moon  Network

Pvt.  Ltd.   That, neither party shall hold out to the  rest

of the world any such relationship.

     To sum up, Moon Network Pvt. Ltd. was appointed as  an

exclusive agent of Star India Pvt. Ltd. in the territory  of

Agra.  At the same time the Agreement recognized the  status

of Moon Network Pvt. Ltd. as an MSO  engaged in the business

of transmission of TV channels through ground  cables.  This

aspect is important since in the present controversy one  of

the  main  issue  which  arises  for  determination  is  the

difference between, \023transmission\024 including re-transmission

of  signals,  on one hand and the expression  \023providing  TV

channels\024  on  the other hand which expression  finds  place

under   the   Telecommunication  (Broadcasting   and   Cable

Services)   Interconnection  Regulation,  2004  (hereinafter

referred to as \021Interconnection Regulation\022).

     At  this  stage we may state that although  the  above

Agreement   dated 8.2.2005 remains in force up to  30.6.2007

for  some  unknown reasons Star India Pvt. Ltd. has  entered

into  a  distributor Agreement on 4.1.2006 under which  Moon

Network  Pvt.  Ltd.   are appointed as distributor.  In  the

present  case  we are only concerned with the interpretation

of  the  Interconnection Regulation 2004, and therefore,  we

are  not required to go into any other aspect.  However,  it

is  made  clear  that  in such cases the Appellate  Tribunal

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ought to have called for the Distributor Agreement, if  any,

and  not decide conceptually they do not go by the facts  of

the  individual cases. In the present case at one  stage  it

was argued vehemently by the appellants that Star India Pvt.

Ltd.  had  entered into an Agreement with Moon Network  Pvt.

Ltd. and that Moon Network Pvt. Ltd. was therefore exclusive

agent  for  the territory of Agra.  It was argued that  Star

India  Pvt.  Ltd.  was  required  to  appoint  an  agent  in

different territories looking to the economies of  scale  of

operations  carried  out by Star India Pvt. Ltd.  throughout

India.  However, when the Court perused the contents of  the

Agreement  we  find  that  the Agreement  is  a  Distributor

Agreement.   As stated above the Agreement expressly  stated

that  Moon  Network Pvt. Ltd. was an independent  contractor

and  that  the  relationship  between  the  parties  was  on

principle  to  principle  basis  and  that  there   was   no

relationship  of  principal and agent, as contended  by  the

appellants before the appellate Tribunal.

     On  behalf  of  the Star India Pvt. Ltd,   Shri  Mukul

Rohtagi, learned Senior Counsel submitted that the appellant

Star  India  Pvt. Ltd. is a broadcaster of TV  channels  and

that  Moon  Network Pvt. Ltd. was an MSO for  supply  of  TV

channels for distribution in the city of Agra.  He contended

that   when  Sea  T.V.  Network  \026  respondent  No.1  herein

approached  Star India Pvt. Ltd. for supply  of  signals  in

that  territory;  Sea  T.V. was directed  to  approach  Moon

Network  Pvt. Ltd.  However, Sea T.V. Network did not  agree

to  take the signals from Moon Network Pvt. Ltd. since  Moon

Network  Pvt.  Ltd. was also a competing MSO.  According  to

the  learned  counsel  under the Interconnection  Regulation

framed  by TRAI there was no prohibition on Star India  Pvt.

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Ltd.  in the matter of appointment of any MSO  as its  agent

on  exclusive  basis  for a given territory.   Reliance  was

placed  by  learned  counsel on  Regulation  3.3  read  with

Explanatory Memorandum.  He contended further that any  such

prohibition  would  be  hit  by  Article  19(1)(g)  of   the

Constitution.   It  was  further  urged   that   the   above

Agreement/arrangement   was   in   consonance    with    the

Interconnection Regulation since  Star India Pvt. Ltd.   was

entitled  to  align  its business in a lawful  manner  under

Article  19(2)(1)(g)  of   the  Constitution.   The  learned

counsel further submitted that under Regulation 3.3 we get a

clarification  of  what is implicit in Regulations  3.1  and

3.2,  namely that a broadcaster is entitled to give  signals

through  an  agent, who can also be a MSO  in  a  vertically

integrated industry so as to reduce high distribution costs.

That, a broadcaster can enter into  any business arrangement

model which protects its financial interest since there  was

no  prohibition  on  such  arrangement.   According  to  the

learned counsel appointment of an MSO  as an agent per se is

not  prejudicial  to  competition  and  if  at  all  it   is

prejudicial  it should be established in each  case  by  the

complainant. According to the learned counsel appointment of

a  MSO  as  an agent is necessary since he knows the  ground

realities.  He is not in a position to ascertain the  number

of  subscribers  and  that  the Interconnection  Regulations

themselves  therefore  contemplate  and  permit  an  overlap

between  the agent and the MSO.  It was submitted  that  the

cable  industry  in India has grown in an environment  which

has  provided inadequate protection to broadcasters. It  is,

therefore, disorganized ultimately having an adverse  effect

on  the consumers. According to the learned counsel there is

in the Indian market large-scale under declaration regarding

number  of  subscribers  which  results  in  an  inequitable

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sharing  of subscription revenues.  According to the learned

counsel  on  a  proper interpretation of the Interconnection

Regulation  it  is clear that a broadcaster  is  obliged  to

provide  its  signals to all distributors of TV channels  on

non-discriminatory  basis.   But  the  manner  of  providing

signals  has been left to the discretion of the broadcaster.

According   to   the  learned  counsel  the  Interconnection

Regulation  for  establishing a \023must provide\024 regime  under

which every distributor is  entitled to the signals of every

broadcaster  on  account  of the  heavy  distribution  costs

widespread  under-declaration of number of  subscribers  and

the  fragmented  nature of the market the  Regulations  have

given  the broadcaster the flexibility to decide whether  to

provide  signals directly or through an agent. According  to

the  learned  counsel  therefore,  there  is  no  particular

business   model  prescribed  by  the  said  Interconnection

Regulation, and therefore, the Tribunal had fallen in  error

in  holding that a distributor of TV channels cannot  be  an

agent  as provided for in Regulation 3.3. According  to  the

learned  counsel  there  is  no  such  prohibition  in   the

definition   clauses   nor  in  the   pre-clauses   of   the

Interconnection  Regulations.  According  to   the   learned

counsel  the  Tribunal has erred in regarding  distributors,

agents,  MSOs  and cable operators as entirely separate  and

distinct categories. According to the learned counsel  under

the said Interconnection Regulations there is a considerable

overlap  between each of the above categories  because  each

of  the  above entities is capable of discharging  different

functions.   The learned counsel,  therefore,  placed  heavy

reliance  on  the Explanatory Memorandum in support  of  his

contentions particularly, in respect of his contention  that

the mode of providing signals by the broadcasters is left to

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an  individual  broadcaster  who  may  provide  its  signals

directly or through a designated agent/distributor    or any

other intermediary as long as such provision is fixed on non-

discriminatory basis. According to the learned  counsel  the

Tribunal  has failed to consider the Explanatory  Memorandum

and  the responses of the TRAI to the comments of the  stake

holders.  According to the learned counsel  the Tribunal has

failed  to  appreciate  that the  term  \021Distributor  of  TV

channels\022  includes  all the entities involved  in  reaching

the  broadcasters signals to the ultimate consumer.   It  is

urged  that  the  impugned  judgment  has  the   effect   of

restricting  the  scope of clause 3.3 on  the  basis  of  an

erroneous  interpretation  of the  definition  of  the  word

\021agent\022  in  Interconnection Regulation 2(b).  According  to

the learned counsel the impugned judgment is erroneous since

it   renders   clause  3.3  meaningless   since   the   said

interpretation   disallows  a  broadcaster  from   providing

signals  through an agent.  According to the learned counsel

clause  3.3 is a clarification to clauses 3.1 and 3.2  which

states   that  the  consumer  must  have  access  to   every

broadcaster\022s channel on a non-discriminatory basis, but the

manner  of  achieving  this object  has  been  left  to  the

broadcaster to decide.  According to the learned counsel the

definition  of  the  word  \021agent\022  in  the  Interconnection

Regulations  do  not provide the manner in which  the  agent

would  make  available the TV channels to  the  distributor.

According  to the learned counsel the words \023make available\024

in  Regulation  2(b) would include giving  of  Decoders  and

supply  of  signals through  cable feed.  According  to  the

learned counsel there is no functional difference between re-

transmission  of  signals  and  making  available   the   TV

channels.  According to the learned counsel there is  hardly

any  difference  in  the  quality of  signals  that  can  be

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received  by  a distributor through Decoders and  through  a

cable  feed. For a distributor to obtain TV channels through

Decoders   the  distributor must possess a  dish-antena  for

downloading    the  signals  from  the  satellite   of   the

broadcaster  and  a divider which divides the  signals  into

various  channels.   The distributor also requires  separate

Decoders  for each channels with an activated viewing  card.

A

distributor  who  obtains  the  signals  through  the  cable

amplifies  it  and distributes it to the other  distributors

and subscribers through the ground cable.  That, the quality

of  signals transmitted through the cable is comparable   to

the  quality  of  signals  obtained  through  the  Decoders.

According  to the learned counsel a distributor who  obtains

signals  through  Decoders  is required  to  invest  in  the

infrastructure consisting of Decoders, dividers,  modulators

and  amplifiers  whereas a distributor who  obtains  signals

through  the cable has not to make such investments  and  at

the  same  time the same quality of signals can be  obtained

through  the  cable  feed  which  requires  investments   in

amplifiers, splitter and cabling.  According to the  learned

counsel  the  interpretation accepted by the  Tribunal  vide

impugned  judgment  would require  an  MSO  to  invest  huge

amounts  in the requisite infrastructure and obtain  signals

through  Decoders, and therefore, the distinction   made  by

the Tribunal between re-transmission and making available TV

signals is not appropriate since the same definition applies

to  agents appointed by MSOs. Accordingly, it was  submitted

on  behalf of the appellant that the Tribunal had  erred  in

holding  that providing signals to a distributor through  an

agent  who  is  also a distributor is per se discriminatory.

According  to  the  appellants discrimination  in  cases  of

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overlap  of functions should be established on case to  case

basis  and if in a given case if it is found  that the agent

is  conducting itself in a manner prejudicial to competition

then clauses 3.4 and 3.6 which provides for redressal  would

apply.

     In  order  to  consider the above arguments  we  quote

hereinbelow  the  relevant provisions of the Interconnection

Regulations dated 10.12.2004 :

      2. Definitions\027In this regulation, unless the        context otherwise requires:                (b)  \021agent or intermediary\022 means any person        including  an individual, group  of  persons,        public   or  body  corporate,  firm  or   any        organisation   or   body  authorised   by   a        broadcaster/multi  system  operator  to  make        available TV channel(s), to a distributor  of        TV channels;                (h)   \021cable  service\022 means the transmission        by   cables   of  programmes  including   re-        transmission  by  cables  of  any   broadcast        television signals;                (i)   \021cable  television network\022  means  any        system   consisting  of  a  set   of   closed        transmission  paths  and  associated   signal        generation,    control    and    distribution        equipment  designed to provide cable  service        for reception by multiple subscribers;                (j)   \021distributor of TV channels\022 means  any        person  including  an  individual,  group  of        persons,  public or body corporate,  firm  or        any  organisation or body re-transmitting  TV        channels   through   electromagnetic    waves        through cable or through space intended to be        received   by  general  public  directly   or        indirectly.  The person may include,  but  is        not  limited to a cable operator,  direct  to        home  operator,  multi system operator,  head        ends in the sky operator;                (m)  \021multi system operator\022 means any person        who  receives a broadcasting service  from  a        broadcaster and/or their authorised  agencies        and re-transmits the same to consumers and/or        re-transmits  the same to one or  more  cable        operators  and  includes  his/her  authorised        distribution agencies.                (n)   \021service provider\022 means the Government        as a service provider and includes a licensee        as  well  as  any broadcaster,  multi  system

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      operator, cable operator or distributor of TV        channels.                3.   General  provisions  relating  to   non-        discrimination in interconnect agreements                3.1  No  broadcaster  of  TV  channels  shall        engage  in any practice or activity or  enter        into   any   understanding  or   arrangement,        including   exclusive  contracts   with   any        distributor of TV channels that prevents  any        other   distributor  of  TV   channels   from        obtaining such TV channels for distribution.                3.2   Every  broadcaster  shall  provide   on        request  signals of its TV channels  on  non-        discriminatory  terms to all distributors  of        TV  channels, which may include, but  be  not        limited  to a cable operator, direct to  home        operator, multi system operator, head ends in        the  sky  operator;  multi  system  operators        shall  also  on  request re-transmit  signals        received  from  a  broadcaster,  on  a   non-        discriminatory basis to cable operators.                Provided that this provision shall not  apply        in  the  case of a distributor of TV channels        having defaulted in payment.        Provided further that any imposition of terms        which  are  unreasonable shall be  deemed  to        constitute a denial of request                3.3   A  broadcaster  or  his/her  authorised        distribution agency would be free to  provide        signals  of  TV channels either  directly  or        through a particular designated agent or  any        other  intermediary. A broadcaster shall  not        be held to be in violation of clauses 3.1 and        3.2  if  it  is ensured that the signals  are        provided   through  a  particular  designated        agent  or  any  other  intermediary  and  not        directly.  Similarly a multi system  operator        shall  not  be  held to be  in  violation  of        clause  3.1.and  3.2 if it  is  ensured  that        signals  are  provided through  a  particular        designated  agent  or any other  intermediary        and not directly.                Provided  that where the signals are provided        through   an   agent   or  intermediary   the        broadcaster/multi  system   operator   should        ensure that the agent/intermediary acts in  a        manner  that  is  (a)  consistent  with   the        obligations placed under this regulation  and        (b) not prejudicial to competition.

                                         ANNEXURE A

                  EXPLANATORY MEMORANDUM

         \005xxxxxxxx    xxx   xxxx   xxx

      Discriminatory Access

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              3.  In India, competition for delivery of  TV        channels  is  not only to be promoted  within        the cable industry but also from distributors        of  TV  channels  using  other  mediums  like        direct  to home (DTH), head ends in  the  sky        etc.   It   is  important  that   all   these        distribution platforms are promoted  so  that        they  provide consumers with choice. It would        be very important that at this stage vertical        integration   does  not  impede  competition.        Vertically    integrated   broadcaster    and        distribution network operators would, in  the        absence   of  strong  regulation,  have   the        tendency to deny popular content to competing        networks or to discriminate against them.                4.  One method of checking these practices is        to  stop  at the source any chance  of  anti-        competitive behaviour by ruling that vertical        integration will not be allowed.  This  route        could, however, impede investments and in the        long  run  adversely affect competition.  The        only  DTH  platform today  has  a  degree  of        vertical  integration. There is  another  pay        DTH  platform which is awaiting approval from        the  Government  that also has  a  degree  of        vertical  integration. DTH  is  the  platform        most  likely to provide effective competition        to  cable  operators. Restriction of vertical        integration  could  therefore,  lead   to   a        situation  where  the DTH roll-out  could  be        affected  and hence competition.  It  is  for        this  reason that the alternative  route  has        been  looked at; controlling anti-competitive        behaviour wherever it manifests itself. These        issues   are  dealt  with  in  the  following        paragraphs.                5. Generally, TV channels are provided to all        carriers and platforms to increase viewership        for    the   purpose   of   earning   maximum        subscription  fee  as well  as  advertisement        revenue. However, according to some opinions,        if  all platforms carry the same content,  it        will reduce competition and there will be  no        incentive to improve the content. Some degree        of  exclusivity is required to  differentiate        one platform from the other.                6.  Exclusivity  had not been  a  feature  of        India\022s  fragmented cable television  market.        However,  the  roll-out of DTH  platform  has        brought  the  question  of  exclusivity   and        whether  it  is  anti  competitive   to   the        forefront.  Star India Ltd and SET  Discovery        Ltd  do  not  have commercial  agreements  to        share their contents with ASC Enterprises  on        its   DTH   platform  and  at   present   are        exclusively   available  on  the   Cable   TV        platform.  ASC  Enterprises claims  that  the        future  growth  will remain impacted  by  the        denial of these popular contents. Space  TV\027a        joint  venture  of Tatas and  Star,  is  also        planning  to launch its digital DTH platform.

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      It  has applied for licence to the Government        for  the  same.  The  DTH  services  have  to        compete  with Cable TV. If a popular  content        is  available on Cable TV and not on the  DTH        platform,  then  it  would  not  be  able  to        effectively  give competition  to  the  cable        networks.                                \021Must provide\022 through whom?                 11.  There  is  high cost  involved  in  the         distribution  of TV channels if  the  market         is  fragmented.  To reduce the  distribution         costs\027broadcasters/ multi  system  operators         should  be  free to provide  access  in  the         manner  they think is beneficial  for  them.         The  \021must  provide\022 of  signals  should  be         seen  in  the  context  that  each  operator         shall  have the right to obtain the  signals         on   a  non-discriminatory  basis;  but  how         these  are  provided - directly  or  through         the   designated   agent/distributor\027is    a         decision    to    be    taken     by     the         broadcasters/multi-system   operator.   Thus         the  broadcaster/multi system operator would         have   to   ensure  that  the  signals   are         provided   either  directly  or  through   a         particular  designated agent/distributor  or         any other intermediary.                  Quality of TV Channel Signals                  13.  Some  cable  operators had  apprehended         that   in  case  TV  channel,  signals   are         provided  through  cable  and  not  directly         then   the  quality  of  transmission  could         deteriorate   and   accordingly    it    was         suggested that agents must provide  services         through  IRDs.  The Authority  through  this         regulation has framed the principle of  non-         discriminatory access, which  also  includes         non-discriminatory  access   in   terms   of         quality  of  signals.  Operators  can   seek         relief  if  it is found that the quality  of         their signals is being tampered with.                  Safeguards for Broadcasters                  14.  In  this context it must be  recognised         that   certain   basic  criteria   must   be         fulfilled  before  a  service  provider  can         invoke   this   clause.  Thus  the   service         provider  should be one who  does  not  have         any  past  dues.  Similarly, provisions  for         protection against piracy must be  provided.         However,    the   content   provider    must         establish  clearly that there are reasonable         basis  for the denial of TV channel  signals         on the grounds of piracy.                  Discrimination  in  providing   TV   channel         signals         

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       17.  In  case any distributor of TV  channel         feels  he/she  has  been  discriminated   on         terms  of getting TV signals compared  to  a         similarly  based distributor of TV  channel,         then  a  complaint must be  filed  with  the         broadcaster  or  multi system  operator,  as         the case may be. In case the complainant  is         not  satisfied with the response, he/she may         approach the appropriate forum for relief.          

  We  do not find any merit in the civil appeal for  the

following reasons :

    Firstly,  we  do not find any error in the  judgment

which has held that in providing signals to a distributor

through  an  agent  who is also in turn a distributor  is

per  se discriminatory.  We agree with the contention  of

Mr.  Rohtagi learned senior counsel that in the  case  of

overlap  of  functions  to be performed  by  each  entity

under the Interconnection Regulations like a Distributor,

MSO,  agent/ intermediary, one has to go by the facts  of

each  case  and  the  terms  of  Agreement  between   the

broadcaster   and  his  agent  cum  distributor.    Every

contract  under the Interconnection Regulations  has  two

aspects.   One concerns the commercial side  whereas  the

other   concerns  the  technical  side.   There   is   no

difficulty  for  the commercial side. If the  broadcaster

appoints  an agent on the commercial side to collect  the

statistics   of   the  number  of  subscribers   or   for

distribution  of  Decoders there is no dispute.   On  the

commercial  side  when  an  agent  is  appointed  by  the

broadcaster  that  agent need not be from  the  Operation

Network.     Such  an agent normally is not  a  technical

service   provider.  The  difficulty  arises  when    the

broadcaster  as  in the present case appoints  or  enters

into  an agreement with a distributor, who in turn is  an

MSO  and who in turn has his own business because in such

a case such an agent-cum-distributor is also a competitor

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of the MSO who seeks signals from the broadcaster. We are

living  in  a  competitive world  today.   If  under  the

Interconnection Regulations an MSO is entitled to receive

signals  directly  from  a broadcaster,  if  directed  to

approach  his  competitor MSO then discrimination   comes

in.  The  reason is obvious.  The exclusive  agent  of  a

broadcaster  has his own subscriber base.   His  base  is

different from another MSO in the same territory. If that

another  MSO has to depend on the Feed to be provided  by

the  exclusive  agent of the broadcaster  then  the  very

object of the Interconnection Regulation stands defeated.

We  are  satisfied that  even technically the quality  of

signals receivable through the Decoders is different from

the quality of signals receivable through cable feed.  In

the  present  case  the broadcaster  has  appointed  Moon

Network as its Distributor for the territory of Agra.  In

the present case the Agreement provides that Moon Network

Pvt.  Ltd.   will  operate  on  principle  to   principle

basis  and  will not be an agent of Star India Pvt.  Ltd.

(Broadcaster). In that Agreement it is expressly provided

that Moon Network Pvt. Ltd. would not be entitled to  use

any   other  medium  except  ground  cable.   Under   the

Distribution Agreement the Broadcaster has appointed  the

Moon   Network  Pvt.  Ltd.  as  the  sole  and  exclusive

distributor  of the subscribed channels. It is  important

to   note  that  under  the  Interconnection  Regulations

exclusivity     of    contracts     stands    eliminated.

Notwithstanding such regulations the broadcaster  in  the

present  case has appointed Moon Network Pvt. Ltd.,   who

is  also an MSO, as the sole and exclusive distributor of

the  subscribed channels through the cable network  owned

and  operated by Moon Network Pvt. Ltd. in the  territory

of Agra.  (See clause 1.1).  This is where the difficulty

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comes in  The object of Interconnection Regulation is  to

eliminate monopoly.  If Sea T.V. respondent No.1  carries

on  business in competition with Moon Network  Pvt.  Ltd.

and  if  it is to depend on the Feed  provided   by   its

competitor  and  if the quality of the signals  available

through  that  Feed  is poorer than the  quality  of  the

signals available through Decoders,  then the Tribunal is

right  in  holding that the above arrangement is  per  se

discriminatory. It is important to bear in mind that  Sea

T.V. Network and Moon Network Pvt. Ltd. are in turn MSOs.

When  Moon  Network Pvt. Ltd. is appointed  as  sole  and

exclusive distributor with a direction to distribute  the

signals  through the infrastructure of Moon Network  Pvt.

Ltd.  then the quality of the signals receivable  by  Sea

T.V.  Network  may  not be the same  as  the  quality  of

signals through Decoders.  In this connection fudging  of

data  (voice and picture) is possible. Even the speed  of

data-transmission to Sea T.V. Network could get affected.

In  such  cases it is the subscribers of Sea T.V. Network

who  would  be  adversely affected.  The picture  quality

would  be  affected. The reason for this is also obvious.

Let  us  say  that Moon Network Pvt. Ltd. receives  about

1000 signals from the broadcaster. Out of 1000 signals it

is  open  to  Moon  Network Pvt. Ltd. to  distribute  the

majority  thereof to its own subscribers and the  balance

could  be  transferred  through the  cable  to  Sea  T.V.

Network.  The quality of the signals receivable  by  Moon

Network  Pvt.  Ltd. directly from the broadcasters  would

certainly be better than the quality, speed etc.  of  the

signals  receivable by Sea T.V. Network.  It is for  this

reason  that  Sea  T.V. Network refused to  take  signals

through the feed.  Therefore apart from competition,  the

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business of Sea T.V. Network to the above extent is  also

likely  to  be  affected because of the poor  quality  of

signals   through  the  feed.   In  such  an  event   the

subscriber  base  of Sea T.V. Network  would  shift   and

become  part of the subscriber base of Moon Network  Pvt.

Ltd. in Agra.

    Secondly,  keeping in mind what is stated  above,  we

may   examine   the  scope  of  the  said  Interconnection

Regulations.  There is a basic difference  between  making

available  T.V.  channels  and  re-transmission  of   T.V.

channels.  We have quoted the definition and provisos from

Interconnection Regulation. Under clause 2(b) an agent  is

a  person  authorized by a broadcaster to  make  available

T.V. channels to a distributor  of T.V. channels.  In that

definition  we  have  a  broadcaster,  an  agent  of   the

broadcaster  and  a  distributor.   Under  the   Agreement

between  Star India Pvt. Ltd.  and Moon Network Pvt.  Ltd.

(which Agreement was not placed before the Tribunal)  Moon

Network  Pvt. Ltd. is a distributor of T.V. channels.   It

is not an agent.  In fact, the contract indicates that the

relationship between Star India Pvt. Ltd. and Moon Network

Pvt.  Ltd.  is  not based on principal-agent relationship.

In  other  words  the  Star  India  Pvt.  Ltd.  has  given

distribution rights exclusively to Moon Network Pvt.  Ltd.

for the territory of Agra. This was never disclosed to the

Tribunal.  Before  the Tribunal it was  argued  that  Moon

Network  Pvt. Ltd. was the agent of Star India  Pvt.  Ltd.

It  is  for this reason that Sea T.V. Network is asked  to

approach Moon Network Pvt. Ltd.  as a distributor.   It is

for  this  reason that Sea T.V. Network is made to  depend

for the signals on the feed to be provided by Moon Network

Pvt.   Ltd.     Further  under  clause   2(j)   the   word

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\023distributor\024  of  TV  channels is defined  to  mean,  any

person    who    re-transmits   T.V.   channels    through

electromagnetic  waves through cable.   When  signals  are

provided  through  Decoders the  matter  comes  under  the

expression  \023make  available T.V. channels\024  in  terms  of

clause 2(b)of the Interconnection Regulations. Clause 2(b)

is  applicable because the broadcaster makes available the

T.V.  channels to its distributor namely Moon Network Pvt.

Ltd.    On  the other hand between Moon Network Pvt.  Ltd.

and Sea T.V. Network clause 2(j) would apply because after

receiving  signals through the cable from the  broadcaster

the  distributor (Moon Network Pvt. Ltd.) re-transmits the

T.V.  channels  through  the Feed  to  Sea  T.V.  Network.

Therefore,  there  is vital distinction  between  what  is

received by an agent-cum-distributor  from the broadcaster

and what is subsequently re-transmitted by that agent\026cum-

distributor  to other MSOs/Cable Operators like  Sea  T.V.

Network.    In  our  view  the  Tribunal,  has  therefore,

correctly  drawn a distinction between what is  called  as

\023making available of T.V. channels\024 and re-transmission of

T.V.  channels  under the above two clauses.   Keeping  in

mind  the  above distinction it is clear that  although  a

broadcaster is free to appoint its agent under the proviso

to clause 3.3 such an agent cannot be a competitor or part

of  the  network,  particularly when  under  the  contract

between  the  broadcaster  and the  designated  agent-cum-

distributor exclusivity is provided for in the sense  that

the  signals of the broadcaster shall go through the cable

network   owned   and  operated  by  such  an   agent-cum-

distributor which in the present case happens to  be  Moon

Network Pvt. Ltd.

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    In  the circumstances there is no merit in this civil

appeal.

    Before  concluding we may once again  reiterate  that

the   Appellate Tribunal in the present case has correctly

interpreted  the  scheme  of Interconnection  Regulations.

However, in cases of functional overlap we are of the view

that in every matter the Tribunal will examine the written

contracts   between  the  parties  and  ascertain   actual

prejudice/discrimination  and not  decide  the  matter  on

conceptual basis.  In the present case we insisted on  the

appellants for producing the written Agreement with  which

clarity  has emerged. But for examination of such contract

it  would not be proper to decide matters on per se basis.

    For  the aforestated reasons we find no merit in this

civil appeal and the same is accordingly dismissed with no

order as to costs.