The Hindu Business Line : A basket CAS

The viewer is the worst affected in the proposed CAS regulation: she will have to spend a great deal on set-top boxes, pay a higher monthly fee, and receive fewer channels, with absolutely no choice of channels or cable operators.

THE proposed deadline of July 14 set by the Information & Broadcasting Ministry for the implementation of the conditional access system (CAS) across 6.4 million cable & satellite (C&S) households in the four metros is expected to throw the decade-old C&S industry in India into massive turbulence. Though pushed through by the Government, supposedly to protect consumer interests, the CAS regulation in its present form offers little solace to the average TV viewer. As with most regulations such as VAT, the issue is not one of intent, but the way in which the Government proposes to implement CAS that is cause for concern.

Sushma Swaraj, in the Statement of Objects and Reasons to the amendment Bill, proposed to address the following issues through CAS: Give the consumer a choice to `ask and pay' for TV channels, address the issue of massive under-declaration by cable operators, of area-specific monopolistic distribution system, and of frequent and arbitrary hikes by cable operators/broadcasters. Unfortunately, implementation of CAS as proposed by the Ministry does not address any of these issues.

TV viewers made the scapegoat

Cable TV viewers in the four metros currently pay approximately Rs 100 crore by way of monthly subscription fees to cable operators (average of Rs 150 per household per month). TV viewers normally protest even a 10-20 per cent hike in the monthly subscription fees. But with CAS, viewers are expected to cough up a massive Rs 3,500 crore by July 14 to buy set-top boxes to access pay channels. For the same set of channels they receive today, viewers will also end up paying at least Rs 500 in monthly subscription fees.

Also, when the issue of under-declaration is between cable operators and broadcasters, why is the viewer being made to pay so much to resolve it? And, where is the choice? Why should a TV viewer spend Rs 5,000 on a set-top box? Supposedly to `ask and pay' for the channel that he wants to watch. However, the viewer really will have absolutely NO choice in the post-CAS scenario. The Government decides on the bouquet of free-to-air channels in the basic tier as per the State, city, town or area. So, if you are not ready to invest in a set-top box, you will only get to see the channels that the Government decides for you! Too bad if you are a Tamilian in New Delhi, you may be deprived of your regular dose of Sun TV.

If the Government does not specify the channels, it is left to the cable operator to decide on the free-to-air channels in the basic tier. In fact, the cable operator will have legal protection if he refuses to show more than 30 (proposed number) free-to-air channels of the `cable operator's choice'. What about free-to-air channels beyond that number? The cable operator will have a free hand to decide whether they remain part of the basic tier, or are offered as the second tier for additional fees, or scrambled and offered as `pay channels' to subscribers. It is likely that popular free-to-air channels may not be included in the basic tier, and that viewers will be charged additional subscription fees to watch popular free-to-air channels beyond the basic tier.

So, if one invests in a set-top box, will he/she get pay channels of their choice? No. As per the amended regulation, viewers can only choose from amongst the pay channels `offered by the cable operator'. What if the cable operator decides to block a particular channel or a bouquet of channels a viewer wants, and is ready to pay for? I'm afraid the regulation doesn't offer the viewer that option. What if the broadcaster switches off the signals of a particular pay channel because of non-payment by the cable operator? There is no protection to the viewer here either. The current anarchy of channel black-outs will continue well into the CAS regime.

What about service? There is no provision that assures quality of service to the viewer. There is also no regulatory provision to offer a redress mechanism for viewer complaints. Viewers have nowhere to go if they have a problem with the service offered by the cable operator. The cable business in India now is not service-oriented, and the infrastructure to handle customer issues relating to billing, service and payments will take time to set up. What happens in the interim period is anybody's guess.

What about choice of cable operator? The issue of an area-specific monopolistic distribution system is not addressed at all. Viewers will still not have the option of switching cable operators if the service provided is not satisfactory. On-ground cable monopolies will, in fact, strengthen, as the cable operator will have direct control over viewer homes.

What about under-declaration of subscriber numbers by cable operators? Again, the proposed format does not appear to have any checks and balances in place to audit the numbers declared by the cable operators, which could lead to huge losses for broadcasters and, subsequently, losses in tax revenues for the Government. Cable operators will still be able to declare the number they wish to declare, leading to disputes and channel blocking. And with no adequate Government controls or legal enforcement to ensure accurate reporting, underreporting cannot be checked.

Who will supply and service the set-top-boxes? The dynamics of the supply and service of set-top boxes are also intriguing. Viewers will be forced to buy set-top-boxes from the cable operators, as they must be compatible with the subscriber management system of the operators. Viewers will also be forced to buy set-top-boxes of a specific brand, quality, technology and price.

There is no set-top-box manufacturer who can supply millions of boxes in such a short time period; manufacturers will start making such large numbers of boxes only after firm orders are placed, and it may take anywhere between 8-12 months to start the supply of boxes. Thus, penetration is sure to be slow, and a large section of viewers across the four metros will not be able to watch quality channels even if they wish to pay for them.

In short, the viewer is the worst hit in the proposed CAS regulation. Viewers will have to invest in set-top boxes, pay a lot more as monthly fees, and receive fewer channels, with absolutely no choice of channels or operators.

(The author is Managing Director, CMCG India. The views expressed are his. Feedback may be sent to bleditor@thehindu.co.in)

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