The Hindu Business Line : CAS gets messier

THE CONDITIONAL ACCESS System that the Government sought to impose on cable television viewers in the four metros now stands unravelled. The Telecom Regulatory Authority of India has recommended that the implementation of CAS be kept in abeyance for three months, and the Government, whose discomfiture over the issue ahead of the elections was palpable, will only be grateful for the bail-out. Does it mean the digital means of distributing television programming is dead? It does not seem so. TRAI says it is not discussing the desirability of CAS but only how it can be implemented without exploitation of the consumer. Yet, its intervention has raised the expectations of the various stakeholders — consumers, broadcasters, multi-system operators and cable operators — so much that it will be hard put to it to satisfy them all.

Consumers obviously want to be entertained cheaply. Undeniably, the introduction of CAS halved the bills of those content with the free-to-air channels. In Chennai, 90 per cent of cable television viewers who did not buy the set-top box must have gained. That ought to have pleased them; but apparently they are not. The monetary gain, it seems, was overwhelmed by the dissatisfaction over not having access to the premium channels, available only through the set-top boxes. They now believe governmental intervention can let them have the cake and eat it too. Broadcasters of pay channels cannot be happy with the CAS regime. In the old, take-all-or-nothing regime, they enjoyed a wide, unfettered viewership. Whether these were "pay" channels or free did not matter; a monthly lump sum gave viewers access to all channels. Under CAS, viewers have the freedom not to subscribe to a pay channel. And most have spurned the pay channels. The consequence for these broadcasters is stark: They not only lose on subscriptions, but also on advertising which earlier brought in three quarters of their revenue. Multi-system operators and cable operators see in the new regime a chance to discipline the broadcasters who, they claim, take away a big share of the consumer rupee. Yet, CAS has the ill-effect of reducing their revenue stream as only a fraction of viewers would opt for set-top boxes.

This is a quagmire the Government should not have stepped into. The first mistake was to make mandatory the introduction of CAS, and then getting into the nitty-gritty of pricing of channels. How is the Government going to determine whether Star Sports should charge more than Ten Sports or how many seconds of advertising should accompany a feature film on a pay channel? These are issues best left to the market. What the Government needs to do is to ensure that the market is well-equipped with alternative means of delivery of programme content and promote more value-added services so that the infrastructure for conditional access is leveraged to the fullest. Consumers are best protected when keen competition and transparency prevail. There are multiple broadcasters, but there are virtual monopolies in the cable distribution. This is a point the regulator needs to address. Then, it can let CAS work its way in if the market so wants.