Ignorance of TRAI laws governing payments by hotel owners to cable operators and broadcasting franchisees caused major problems for hoteliers during the IPL, finds Charu Bahri.
The Telecom Regulatory Authority of India (TRAI) amended Telecommunication (Broadcasting and Cable) Services (Third, CAS areas) Tariff Order, 2006, issued vide a notification dated November 21, 2006, clearly states the three categories of commercial subscribers.
These include hotels with rating of three-stars and above, heritage hotels (as described in the guidelines for classification of hotels issued by Department of Tourism, Government of India) and any other hotel, motel, inn and such other commercial establishment, providing board and lodging and having 50 or more rooms.
Said Pradeep Shetty, chairman (legal matters sub-committee) and executive committee member, Hotel & Restaurant Association, Western India (HRAWI): “This notification has not adversely impacted larger establishments; the dynamics of their negotiations differ from medium-sized hotels that just about make it to the category of ‘big’ players, or smaller hotels that are unaware of the law and which were exploited during the IPL-3.
It is a fact that there is no intelligible differentiation between a protected hotel having say, 48-rooms, and a hotel sans protection having 52-rooms. This tariff order has been challenged in TDSAT and there is an interim restraining order against the broadcasters, which is seldom obeyed by them. However, the said appeal is now posted for final hearing on 18th-19th May, when we hope the exception in the Tariff order will be removed.”
Hearing reports of a racket that had severely affected hoteliers not falling in the league of big players required to directly negotiate licence fees with representatives of broadcasters, Narayan Alva, president, Indian Hotel and Restaurant Association (AHAR), filed a complaint with the Vigilance Section of the Indian Broadcasting Department about Novex Communications collecting exorbitant fees and questioning its authority.
“Novex Communications has the right to collect licence fees for three channels, including SetMax which aired the IPL event. But this IPL season, possibly the hype surrounding the event gave reason to franchisees of Multi-Screen Media (MSM), IPL’s telecasting agency, to try and make a quick buck from smaller hotels.
I have gone so far as to call it fraudulent because the franchisees collected whatever they could extract from small hoteliers, between Rs15,000-to-Rs45,000 and even Rs100,000-to-Rs150,000 in some cases; essentially extorting fees without any bench mark or guidelines,” said Alva.
Alva also claims Novex Communications misguided the police force of Greater Mumbai as well as members of AHAR.
“The TRAI provisions clearly state what sized hotels are required to negotiate licences. It should be noted that most small hoteliers are neither registered to pay entertainment tax nor did they charge guests to watch IPL matches. They paid their dues to cable operators through whom the event was telecast. Then how did Novex Communications come into the picture? The Mumbai police should have taken steps to stop the harassment. The agencies should not have misguided hoteliers through public notice,” he added.
Rohan Hegde, director, Tunga Hotels, was equally forthright. “The modus operandi of Novex Communications, MSM’s franchisee and also representative of Sony and SetMax, has been highly questionable. It suggests that it is a beneficiary of a revenue-sharing model that is not based on fair trade practices.
A hotel pays fees to the cable operator in good faith, believing that the operator is transmitting authorised feeds. But some hoteliers were approached by Novex to pay more in spite of the fact that they had not planned to commercially exploit the IPL event within their hotel premises.
Novex has functioned more like a recovery agent. Hoteliers running reputed establishments should not be threatened nor should extra money be extorted in the name of license fees.
It is advisable that the police abstain from acting or involving itself at the behest of these recovery agents as this is a trade issue. As it is, business was on the downside during the IPL event,” said Hegde.
Meldan D’Cunha, director, Soul Fry Casa, Mumbai, says that Novex Communications approached his restaurant to pay up during IPL simply because the outlet had TV sets screening the matches.
“It’s not as if we were charging a cover fee from our guests for watching the match. We needlessly paid up and were not even issued a receipt – that’s when I put a stop payment on the cheque,” said D’Cunha.
The picturesque hill station of Mahableshwar also has its share of irate hoteliers. Said Ajay Khakhar, director, Valley View Resort, Mahabaleshwar, and also president, Mahabaleshwar Hotels & Restaurants Association: “Standard rates would ensure that mid-sized hoteliers are not harassed in the name of license fees.
We provide television sets as a part of a range of amenities offered to our clients. We do not have dual pricing for rooms with and without TV sets. Then, why were we approached by franchisees escorted by police authorities to pay extra? I believe the hype around the IPL event gave the franchisees reason to believe that they could get away with anything. The organisers of the event should have ensured that no one got carried away.”
A few hospitality establishments even faced the brunt of the authorities when they stood up to cable operators and agency representatives asking for extra fees.
Added Lekhraj Sardana, general manager, Landmark Suite (service apartments), Mumbai: “We had a sorry experience – the local police authorities were fed false stories of non-payment by the franchisees, as a result of which one of our managers was arrested. Our cable transmission was cut off several times. Novex Communications should follow a proper code of conduct and take recourse in a court of law if it believes that a hotel has not paid its dues. It should not fabricate stories to garner the support of the police and harass hoteliers and their guests” he said.
“IPL or no IPL, the AHAR is now doing all it can to publicise the fact that small hoteliers do not require to pay any more than the regular cable charges,” concluded Alva.
