The Hindu : BEYOND THE CAS CONFUSION

Online edition of India's National Newspaper
Monday, Mar 01, 2004

Opinion

Opinion - Editorials

BEYOND THE CAS CONFUSION

THE DENOTIFYING OF the Conditional Access System (CAS) to view pay channels brings to an end a year of confusion surrounding cable television in the country. The decision, however, raises a host of issues that the broadcast regulator, the Telecom Regulatory Authority of India (TRAI), will have to address as it considers a new scheme for television. There can be no reasonable argument against offering superior technology such as CAS as an option. If it was viewed with suspicion and opposed by many consumers, the policy of compulsion that accompanied its entry was to blame. The decision to make it compulsory for viewing pay channels in the metros was retrograde. Instead of offering it as a value-added service to those who wanted high quality picture and sound through a Set-Top Box (STB), the Government opted to use the route of compulsion. That mistake has been rectified now. The challenge before the broadcasters and multi-system operators today is to use their investments in CAS infrastructure and STBs to provide premium services that will attract new subscribers. When it was first introduced, CAS raised expectations that it would bring special content such as pay-per-view television to subscribers but the broadcasters did little to exploit such potential.

TRAI is to look at the full spectrum of issues involved in broadcast and cable regulation in the coming months. At the risk of creating fresh confusion the regulator has said that until a new scheme is in place, the cable television rates prevailing on December 26, 2003 for CAS and non-CAS areas should be treated as the maximum payable by consumers to cable operators and in turn by them to multi-system operators or broadcasters. Price has been the most sensitive issue in cable television since its introduction. Most subscribers welcomed CAS in Chennai because they could opt for the Free to Air (FTA) channels and pay a lower monthly charge than in the pre-CAS era. With conditional access no longer compulsory, the administered price mechanism may not be valid unless the Government can ensure that the FTA channels will continue to be available separately. There is also the unresolved question of competition at various levels.

TRAI's analysis of the cable television sector based on interaction with broadcasters, multi-system and cable operators, and consumers confirms the view that the subscriber has suffered from a lack of competition. In the absence of a genuinely competitive market for delivery of television through various technologies, the promise of lower tariffs and better quality remains illusory. The regulator has found a "vicious" monopoly of cable operators in most areas and a vertical monopoly created by takeovers of local operators by broadcasters and multi-system operators in many places, leading to the exploitation of the consumer. Part of the solution, TRAI thinks, lies in ensuring proper and fair functioning of operators and opening the television sector to competition either through increase in the number of local cable operators or the use of alternative technologies such as Direct-to-Home (DTH) and broadband or both. This would seem to be the best way to go because it offers the consumer a choice of technologies and services. Such competition within an overall regulatory framework has brought about a healthy mix of delivery modes in the developed television markets internationally. Tariffs fixed by operators come under market pressure in such a scenario and TRAI as the regulator could concentrate its efforts on ensuring competition rather than trying to manage prices at the micro level. State Governments can facilitate competition by removing impediments on the ground.

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