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Thursday, Jan 15, 2004

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Regulating CAS: New role for TRAI

G. Srinivasan

FOR those who follow the unseemly goings-on in the television industry with multi-system operators, broadcasters, cable operators and last-mile operators at loggerheads with one another ever since the concept of Conditional Access System (CAS) was toyed and implemented in one metro, the Government's latest decision to refer the matter to the Telecom Regulatory Authority of India (TRAI) appears not only timely but also thoughtful.

TRAI has been directed to draw up the rules of the CAS game and police the industry till a decision is taken on setting up a super-regulator — the Convergence Commissioner of India — which will have the whole gamut of communications and broadcasting universe under its oversight. TRAI should in right earnest begin devising a credible and durable regulatory framework to the disorderly cable industry, keeping in view the technological development sweeping the communication and broadcasting world.

Already, decks have been cleared for television requirements to be provided by at least three distinct technologies.

The extant satellite-cable combination and the incipient direct-to-home (DTH) satellite services and services based on broadband networks to residents — as recently experimented by Reliance Infocomm in Mumbai — and any regulatory framework to be evolved, must give due thought to these distinct services so that the television viewer is not taken for a ride.

Considering TRAI's success , particularly its salutary intervention in 1999, 2001 and 2003 which had resulted in resolving the multiple technology problem plaguing the telecom sector and contributed to the explosive growth in mobile telephony in the country with close to 30 million subscribers today, the mandate given to it to bring some order to the country's cable industry that reaches some 42 million homes, is the most appropriate decision.

But it is essential that TRAI is given total freedom to frame the rules of the game, as it did for the telecom industry which, in recent months, has seen no political or bureaucratic interference to pit one player against another to wrest control and operate from behind the scene.

Having said this, it needs to be added that evolving a regulatory regime for the cable industry is slightly different from the telecom regulations.

The regulator must ensure that the existing operators do not remain monopolists in the areas they serve and provide for at least a couple of more operators to bring in competition and safeguard consumer interest.

For TRAI two issues stare in the face. One, how the market situation would be evolved by the regulatory tool and, two, how to ensure the prices are cost-based and end the super-normal profit enjoyed by the major actors such as the MSOs, and the cable operators fleecing the consumer.

TRAI successfully ensured the launch of the unified licensing regime in the shortest possible time with its expertise in costing, legal matters, regulatory practices and communication technology.

Hence, it would not be difficult for it to ensure at each end of the supply chain at least two-three players for providing cost-effective and quality services.

A related question to pricing is revenue-sharing between the MSOs and the cable operators, and the latter and the last-mile operators.

TRAI should also resolve who would be the licensor in the supply chain of the broadcasting industry just as the Department of Telecommunications (DoT) has been the licensor in the telecom industry.

As the confusion is worse compounded by the Information and Broadcasting Ministry's ham-handed approach to the entire CAS, with the promised free-to-air (FTA) channel for Rs 72 for 30 channels now appearing chimerical, the cable industry continues to exploit the situation with monthly fee continuing to remain discriminatory and highly skewed, varying from area to area to the dismay of viewers.

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