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An opportunity for cable reform

With its order to the Centre to implement the Conditional Access System (CAS) for cable television in Delhi, Mumbai and Kolkata, the Delhi High Court has refocussed public and policy attention on the many tangled issues in broadcasting. Ever since it was notified for implementation in 2003, CAS has been hanging fire in the three metros for a variety of reasons (Chennai continues with it following court orders). As a system that identifies individual subscribers, CAS brings accountability to an industry that has grown amorphously since the 1990s. The cable sector has in more than a decade created local monopolies, under-declared subscriber figures, and largely eluded regulation of service delivery in the last mile. In such a scenario, CAS technically empowers the consumer by providing choice. The subscriber can opt for à la carte subscription rather than the entire bundle of channels. That advantage has apparently not swayed most subscribers who fear periodic increases in their bills brought about by price revision, and unfair practices such as bundling of set-top boxes only with annual subscriptions. Not surprisingly, CAS failed to take off and the Centre, following a recommendation by the Telecom Regulatory Authority of India, suspended its implementation in February 2004. On the eve of the scheduled introduction of CAS nearly three years ago, there were an estimated six million plus homes with cable television access in the four metros, of which over a million were in Chennai. CAS has a low acceptance ratio in Chennai and only a minority has opted for set-top boxes; the majority welcomed the halving of their monthly bills that was made possible by the grouping of free-to-air channels (including the regional favourites) under a regulated tariff (only the loss of sports pay channels evoked protests).

If CAS is indeed rolled out as ordered by the court in a phased manner over the next several weeks, it will find itself in a changing milieu. Direct-to-Home (DTH) television is now a reality and the impending launch of more services in this area, such as Tata Sky, potentially offers a greater choice of technologies and tariffs. This is a significant era for broadcasting, since two other choices are also taking shape — private terrestrial television broadcasting, for which TRAI has sent its recommendations to the Government, and the nascent Internet Protocol Television (IPTV). Can pay television through cable find its feet now? The answer would appear to lie in the readiness of the Centre and the States to launch a process of reform. TRAI has already outlined a roadmap for digitalisation of cable by 2010, beginning April 2006. Cable service involving the multi-system operators and local operators requires a strong and transparent legal framework to foster competition. Automatic licensing at all levels could be the way forward. By facilitating transparency, governments will also be helping themselves to the extent that it will reduce seepage of tax revenues.

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