The Hindu Business Line : More new channels lead to distribution problems

So even as the Star India readies itself for the launch of StarOne, Walt Disney brings in its new channels and others such as CNBC, NDTV and the Times Group unleash new offerings, getting these channels into the homes has become a challenge.

The tug-of-war between the broadcasting industry and the cable service provider remains unresolved with each blaming the other for poor availability of the channels. And along with this, is the issue of carriage fee that broadcasters have to pay cable operators. According to officials in the broadcasting industry, "The cable industry has only limited capacity and most of the cable service providers have started demanding heavy fees to carry the new channels. Only after paying carriage fee, does a new channel get a good placement." In fact, the recently launched lifestyle channel, Zoom (Monthly subscription fee of Rs 7), and kids channel, Hungama (Rs 6), have found the going tough and have been asked to cough up carriage fee said industry sources.

The cable industry while conceding that carriage fee is accepted when a particular channel requires good placement, it also concedes that some of the major broadcasters use the bouquet approach to ensure that signals of new channels are made available to homes. "Some channels such as NDTV or the God Channel have been paying carriage fees for better placement. However, some big broadcasters even threaten cutting off signals of popular channels if the new ones are not carried," said a Delhi-based cable operator.

The Telecom Regulatory Authority of India (TRAI) freezing cable rates in December also hampers the launch of new pay channels by existing broadcasters. The TRAI, in its recommendations on the Conditional Access System (CAS), has suggested various options such as allowing new channels to come through a set-top box. It has also suggested that new pay channels could be offered to the cable operator individually or as a new bouquet of pay channels.

TRAI clarification

The TRAI today clarified that the ceiling charges to the consumer would be reduced if a broadcaster brings down the number of channels in a bouquet. This has been done through an amendment to the Tariff Order "The Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004'' of October 1, which had laid out a framework for regulation of prices of new pay and converted free-to-air to pay channels which came after December 26.

The order had also specified reduction in ceiling charges for multi-system operators and cable operators. The new order has been issued as a number of representations had been received seeking clarification on the manner in which new pay channels can be priced and the impact on retail prices.

Similarly, clarifications had also been sought on the impact of channels that were free-to-air on December 26 last and having later converted to pay.