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Another chance for CAS

The Telecom Regulatory Authority of India has struck a decisive blow for the consumer. It has announced price controls for television pay channels to be distributed in four metro cities exclusively through the Conditional Access System (CAS) from next year. The proposed introduction of CAS from January 1, 2007 in Mumbai, Delhi, and Kolkata — it has been in operation in Chennai for three years, with mixed results — after fitful attempts and legal vicissitudes is significant given the robust increase in cable and satellite (C&S) penetration. The National Readership Study 2006 estimates that television in India reaches 112 million households and 447 million people of age 12 and above. Of the 112 million television-viewing households, 68 million have C&S access, a 12 per cent rise over the previous year. (Interestingly, the increase in the number of homes with colour TV, from 58 million the previous year to 64 million, parallels the expansion of C&S.) The number of people watching satellite television in `an average week' has grown from 207 million in 2005 to 230 million this year, with the metros accounting for a considerable proportion of these viewers. All this suggests that effective regulation of satellite television in India has become an imperative. TRAI has centre-staged the reality that the existing service framework under the Cable Television (Networks) Regulation Act has failed to generate sufficient competition. A regime of price caps for pay channels is therefore warranted. Given the helplessness consumers feel when paying for cable television, TRAI's moves to fix a five-rupee limit for individual pay channels and lay down subscription rates for set-top box connections will win wide public acclaim.

The rationale for technologically superior CAS is that, with liberal consumer-friendly regulation, it can unbundle pay channels and give the subscriber the option of `a la carte' selection. The Chennai experience has shown that the system can also drive down access costs for subscribers who want only the basic tier of free-to-air channels. However, the system has failed to achieve the key objective of giving consumers real choice among pay channels. This is essentially because, in the absence of effective regulation, service providers resort to anti-competitive practices: for example, many less popular channels are bundled with more popular, high-priced sports and film channels and offered on a take-it-or-leave-it basis. TRAI has sought to address this problem with a maximum uniform retail price for all channels. Not surprisingly, the regulator's decision — which comes at the end of a long consultative process involving broadcasters, multi-system operators (MSOs), and consumers — has not gone down well with many broadcasters. As it moves ahead with CAS, the regulator must review the complaints redress mechanism — currently, under the cable regulation Act, complaints are handled by the Commissioner of Police or the district or sub-divisional magistrate! Cable television service at the subscriber end tends to be unprofessional for a number of reasons. For one thing, State governments and civic bodies do not facilitate the laying of cables in an orderly fashion. Operators remain amorphous entities, collecting non-receipted and arbitrary fees. Broadcasters and MSOs complain that operators significantly understate the number of cable subscribers. Cartels thwart genuine competition in the last mile. While new technologies such as Direct-to-Home television expand choice, a consumer-friendly grievance redress machinery with teeth is an imperative if CAS is to be successful. This is the progressive way to go in the broadcast field.

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