Delhi High Court rejects ESPN’s plea on Sharing Live Signals with Prasar Bharti

In what can be considered as an important decision, Delhi High Court (“High Court”) has dismissed a writ petition filed by ESPN Software India Pvt. Ltd (“Petitioner”) wherein the validity of Rule 5 of the Sports Broadcast Signals (Mandatory Sharing with Prasar Bharti) Rules, 2007 [“Broadcasting Rules”] had been challenged. Rule 5 of the Broadcasting Rules casts an obligation on television/radio broadcaster to ensure the compliance with statutory obligation of sharing live feed with Prasar Bharti while an agreement is entered into with event organiser. Rule 5 covers a situation where television or radio broadcasting service provider is different from the contents rights owner or holder. 

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According to the petitioner, Rule 5 of Broadcasting Rules was violative of section 3 of Sports Broadcast Signals (Mandatory Sharing with Prasar Bharti) Act, 2007 (“Signal Sharing Act”) and Article 14 of the Constitution of India. Section 3 of the Signal Sharing Act makes it obligatory for a content owner/holder and a broadcasting service provider to share live signals of sports of national importance with Prasar Bharti. While sharing such signals, it should be ensured by the content holder, owner etc. that ‘its advertisements’ are not present in the shared in the shared signal. The provision can be read as:

                                       “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 the 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...........”

It was the contention of the petitioner that its obligations are to only share the signals as it was received from the event organiser (ICC, Formula One etc.).  Since feed/signals received from content event organiser contain some ‘commercial advertisements’, such advertisements, according to the petitioner, cannot be removed while sharing signals with Prasar Bharti. This is so because ‘its advertisement’, as used in section 3 of Signal Sharing Act, refers to the advertisement of broadcaster and not of the event organiser/content owner. That removal of advertisement inserted by the event organiser would be contrary to its contractual obligations, it was contented that this would be an act impossible of being performed.

While deciding the matter, the High Court first clarified that vires of section 3 of Sharing Signal Act has not been challenged. Hence, the court declined to test the validity of section 3. The High Court, however, dealt with the interpretation of section 3.  Having discussed that Sharing Signal Act is not an expropriatory legislations and has been enacted to provide people with access to sports of national importance, the court went to the traditional reasoning that air waves are public property:

                                            “Air waves and spectrums are used while broadcasting events through a television network.  The air waves and spectrum are public property held in trust by the Government for the benefit of public good. He who uses the spectrum or the air waves,  has to pay for the use thereof and the mode of payment  could  be  either  a  license  fee  charged,  a  bid  at  an  auction  or  a revenue sharing of the gains made as a result of the broadcast; the last being akin  to  a  joint  venture  where  the  owner  of  the  spectrum  or  the  air  waves joins hand with the owner of the broadcast, be it the content owner or the holder.”

Thereafter, the court discussed the interpretation of ‘its advertisement’ under section 3. It was held by the court that the phrase, i.e., ‘its advertisement’, can have only one meaning: ‘live broadcast signals have to be shared without any advertisements’. According to the High Court:

                                            “.....the subject of  (the single sentence)  sub-Section 1 of Section 3,  is ‘the content right owner or holder or  radio  broadcasting  service  provider’  and  the  three  words  ‘without  its advertisements‟  are a sub-clause constituting a  condition  and since the three words immediately follow the words ‘live broadcasting signal’ they have to be, plainly read, as a condition concerning the live broadcast signal and not the  content  right  owner  or  holder  or  radio  broadcasting  service  provider; meaning  thereby,  whosoever  airs  a  live  television  broadcast  of  sporting events  of  national  importance  must  share  the  same  without  any advertisements inserted with Prasar Bharti.”

In the present case, the High Court declined to go into the question of petitioner’s inability to breach obligation under a contract with event organiser. It is because the vires of section 3 of Sharing Signal Act had not been challenged in the petition. Since Rule 5 of Broadcasting Rules is made to implement the provisions of Signal Sharing Act, it is the latter whose validity should be tested.

Now, it has to be seen whether section 3 of Signal Sharing Act would itself be challenged before the court. We will keep updating if any petition is filed challenging section 3. For the copy of judgment, click ESPN Software India Pvt. Ltd. v. Prasar Bharti & Anr.