CAS confusion in Delhi

Published : Jan 30, 2004 00:00 IST

The conditional access system for cable television viewing creates much confusion in South Delhi, throwing up the urgent need for a super regulator.

in New Delhi

THE Information and Broadcasting Ministry, all short of admitting that it has bitten off more than it can chew with the conditional access system (CAS) for cable television, is now looking for a way out.

A bitter debate has dogged the CAS experiment ever since the Ministry announced it in July 2003. It got off to a wobbly start in Chennai in September and now it is the turn of South Delhi, which came under the regime on December 15. The latter experiment could prove to be its undoing.

The professed aim of the CAS is simple - to bring in the highly overdue regulation to the television market. Consumers in India pay between Rs.150 and Rs.300 a month to their local cable operator to watch anything between 80-100 channels; the operator cheats the broadcaster by underdeclaring the actual number of subscriptions. Broadcasters, for their part, exploit the murkiness of the arrangement to put out inflated figures about their viewership in order to garner more advertisement revenue. "The entire system so far was based on thievery," points out Paranjoy Guha Thakurta, media-watcher and journalist.

The CAS seeks to put an end to all this by bringing in transparency, regulation and choice to the television market. However, the government's decision to dive in head first, has caused immense confusion. Guha Thakurta puts it thus: "The whole sorry mess has exposed the deep fissures in the industry and exacerbated the skirmishes within it." Consumers are caught in the crossfire between broadcasters and cable operators since the I&B Ministry has failed to address obvious questions such as cable monopolies, fair pricing and monitoring mechanisms.

The government's promise of an average monthly bill of Rs.150-200 has been shown up. The basic tier of 30 free-to-air (FTA) channels works out to Rs.72 plus taxes, but consumers who wish to watch pay channels are required to invest in set-top boxes that can be bought or hired from the local cable operator or multi-service operator (MSO). However, this deal is working out very differently from what was expected. According to citizens' bodies and Residents' Welfare Associations (RWAs), people were coerced into buying set-top boxes without giving them prior information on the nature of the change or about the refundable rent option. Despite the reduction in import duties on set-top boxes, they still cost a prohibitive Rs.2,500 plus in Delhi. The actual number of set-top boxes in circulation is somewhere between Rs.2,000 and Rs.30,000. (Interestingly, most of the digital set-top boxes came from the Rupert Murdoch-owned manufacturing firm Humax.) Many consumers complain that the cable operators have used CAS as a means to extract exorbitant sums of money and in several cases, have blacked out FTA channels.

Information and Broadcasting Minister Ravi Shanker Prasad has advised consumers to tackle the fleecing thus: "Learn how to resist the cable operator."

According to Guha Thakurta, one of the single biggest hurdles to CAS is the monopolistic nature of service, as "entire localities are dependent on the friendly neighbourhood hoodlum, who is the cable operator, or a more powerful MSO". Until the cable service market is made more competitive, consumers will continue to be at the mercy of their local service provider.

"We're in a state of confusion. The operators urge us to buy set-top boxes, and then the newspapers bring the news that CAS is off and advises us not to buy the boxes. I think the government should refund the money lost in the entire pointless exercise," says Rohini Singh, a resident of Shah Jahan Road in New Delhi.

The sheer lack of planning and the ad hoc implementation of CAS have sparked public outrage and political resistance. The State unit of the Bharatiya Janata Party (BJP), fresh from a defeat in the Delhi Assembly polls, dreads CAS could trigger a repeat performance in the Lok Sabha polls, and is anxious to score points in terms of voter support. Both BJP bigwig V.K. Malhotra and Chief Minister Sheila Dixit are united in their opposition to the policy. The Delhi government has submitted field reports to show the industry's unpreparedness for CAS and wants it to be postponed indefinitely. "We have submitted our final report reiterating our stand that consumers are simply not ready for this transition. There are far too many glitches at this point and there is no regulatory body to look into them," Sheila Dixit told Frontline.

"In the present system, whatever permutations and combinations are considered, appears to make the consumer pay more for viewing less," says the Delhi government report, citing price structures where consumers who previously paid a monthly bill of Rs.165 now have to pay about Rs.340 (Rs.100 for FTA channels, Rs.199 for pay channels and Rs.40 as rent for the set-top box), in addition to a down payment of over Rs.3,000.

The report also objected to the `open-ended' list of FTA channels, and to foisting the Fashion TV channel on consumers while denying them many educational channels. It also noted that the technical service and maintenance that cable operators extended to subscribers was shoddy, and concluded that "cable operators do not appear to have the wherewithal and infrastructure to activate more than 10 STBs a day".

A consumer interest group called the Consumer Coordination Council challenged CAS in the Delhi High Court. "New technology cannot deprive people of their rights," said council chairman Bejon Mishra, adding that set-top boxes were being thrust on consumers without offering them any choice in the matter of their price, technology or quality.

The High Court, however, ruled on December 25 that CAS was not consumer-unfriendly as a concept, and quashed the de-notification move. It also asked for a review after three months of the implementation of CAS. While the Consumer Coordination Council has announced its intention to petition the Supreme Court if CAS is not withdrawn for now, the I&B Ministry is busy looking for ways to extricate itself out of the mess. According to Ministry officials, they are now consulting the Law Ministry to get around the High Court order. While rumours of going in for an ordinance have been dismissed, the Ministry may now seek to issue an order on the basis of the Delhi government's field reports. The Ministry has also succumbed to pressure and set up an interim regulating body to look into the content, advertising and tariff issues.

Meanwhile, the much-maligned cable operators' lobby called a press conference, where they presented the bouquet-wise break-up of major pay channels and threatened that cable bills would rise to a whopping Rs.500 if CAS was scrapped. Rakesh Datta, general secretary of the Delhi-based Cable Networks Association, said: "The government stands to gain by increased transparency and revenue in the form of service and entertainment taxes." Instead of targeting the predatory prices and arbitrary hikes made by the broadcasters, the government chose to blame cable operators and discredit CAS, said Roop Sharma, president of the association.

Pointing out how Raj TV and Vijay TV went free-to-air after CAS was introduced in Chennai, the cable operators said that consumers only had to wait and watch, as most advertisement-driven popular channels would be forced to go free if viewers did not invest in set-top boxes.

Although CAS was conceived as a way of ensuring that consumers paid for exactly what they wanted to watch, broadcasters were one up in the game. They fixed the a la carte cost of channels at 70-80 per cent of the price of the entire bouquet. For example, as Rakesh Datta explains, Star Plus is priced at Rs.24, while the entire Star bouquet costs only Rs.55. (Star has now announced its intentions of notching that up to Rs.65.) Similarly, while ESPN and Star Sports are priced at Rs.29 each, they are together available for Rs.32, and there are no controls on such restrictive trade practices.

The initial logic was that channels would confine themselves to either ad-based revenue (in which case it made sense to be free) or a subscription-based pay model. However, as the Ministry has made no moves to limit the advertisement content in pay channels, many popular channels like Star Plus and Zee are also subscription-based. Thus, the claim that CAS was introduced to benefit consumers seems bizarre and self-defeating now, as consumers find themselves deprived of their preferred entertainment, and are now stuck with a handful of channels they did not ask for.

Hathway president S.N. Sharma said: "The cable industry has already invested about Rs.500 crores in Delhi alone. This includes everything from set-top boxes to subscriber management systems to other technical paraphernalia. A rollback would be disastrous." The cable operators certainly have a point when they say that "the faulty implementation of CAS is being confused with the system itself". Similarly, V.C. Tandon, secretary-general of the joint front of Delhi's RWAs, expressed support for CAS in concept, and demanded that the government "only implement it in a consumer-friendly manner".

CAS would benefit each segment provided it is managed right. Technologies like DTH (direct-to-home) broadcasting will also create a multiplicity of platforms and delivery choices, leading to expanded consumer choice without a government-dictated technology imposition.

Media analyst Sevanti Ninan says: "A more addressable system would get all-round approval, without doubt. The problem is only with the mandated nature of the change. It is ridiculous for the I&B Ministry to engineer the entire operation." Yet, all these problems could and should have been anticipated, says Guha Thakurta. He added: "In other countries, the cost of set-top boxes has been split between broadcasters and cable operators, who factor the expenditure into subscription revenues, the quantum of which is enough to ensure return on investment." He quoted a research paper by Media Partners Asia Ltd, which claims that the Indian media market is not robust enough for conditional access as pay TV economics does not apply the same way here as abroad.

In fact, the CAS clamour in Delhi has thrown up the urgent need for a super regulator. The Convergence Bill, which has been stalled in Parliament for years, envisages a regulatory body similar to the Federal Communications Council in the United States that will have the authority to oversee this massive transformation in the broadcasting sector. In the absence of such a dedicated regulatory body, the CAS experiment will remain an embarrassing debacle for the government.

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