DIGITISATION FOR WHOM ?
All cable TV consumers beware- government of India by amending THE CABLE TELEVISION NETWORKS (REGULATION) ACT, 1995 on 25th October 2011 and by notification dated 11th November 2011 has made it mandatory for all cable television service providers to provide only digital and encrypted signals to their consumers. The time table for this Digital Access System (DAS) has also been notified which prescribes that DAS should be implemented in 4 metros (Delhi, Mumbai, Chennai and Kolkata) by 30th June, 2012, other major cities by 31st March 2013 and rest of the country by 31st December, 2014.
The purpose of this exercise is to plug the leakage of revenue (claimed to be about 60 %) control the content and provide superior technology but the ulterior motive seems to be to help broadcasters and MSOs control cable operators and in turn the consumers and in maximizing their revenue.
A DAS system means the broadcasted channels will be provided by the MSOs to consumers through Local Cable Operators (LCO) only in digital format and fully encrypted requiring the consumer to fit a Set Top Box (STB) to be connected to his Television which will decrypt these digital encrypted channels to be viewed. Please note that for every TV in a household one needs to have a separate STB.
Substantial increase in Revenue (>60%) Control (read censorship) Political patronage
Total control over content Substantial increase in Revenue (about 60%) Increased advertisement revenue as local competition eliminated Effective control over consumers
Substantial increase in Revenue (about 60%) Captive consumer base Total control over LCOs
Control and information about their customers lost to MSOs Revenue from locality channels and advertisements Responsibility towards customers but no authority over content / policies etc.
Increase in costs Additional burden of paying for STB Local face providing service replaced by faceless call center Reduced competition for all the stakeholders – disadvantage to consumers Opportunity to communicate with local community lost Ability to negotiate with LCO reduced
Increased monopolistic powers in the hands of broadcasters / MSOs Possibility of censorship increased in the hands of Government Freedom of expression for communities and small communities curtailed Government policy of promoting COMMUNITY RADIO and such intracommunity is negated Reduced opportunities for small scale / micro businesses as LCOs will be fully under MSO’s control.
The essential features of DAS are:
1. All channels being broadcast will be only in digital form, the cut off dates as detailed above.
2. Every channel so digitized will have to be encrypted as well.
3. LCOs will only provide such digital encrypted channels to consumers
4. No analog signal will be available to consumers as per schedule prescribed
5. Consumers will have to install 1 STB for every TV
6. These STBs will be provided to consumers by LCOs within the tariff framework prescribed by TRAI
1. All cable operators will have to register with the registering authority as prescribed by the Cable Rules (being formulated by I & B Ministry).
2. All MSOs (providers of content received and assimilated from various Broadcasters to cable operators) also need to be registered with the registering authority.
3. The interconnection agreements will be signed between broadcasters, MSOs and Cable operators (LCOs) as per the guidelines being formulated by TRAI.
4. MSOs will provide Set Top Box (STB) to LCOs as per mutually agreed terms within the framework prescribed in Cable Rules and TRAI guidelines.
5. LCOs will provide these STBs to the consumers
6. TRAI also will be deciding the revenue share of broadcasters, MSOs and LCOs.
7. For consumers TRAI has the mandate to decide – i. Tariff chargeable by LCOs from consumers ii. Terms for providing Set Top Box (STB) iii. Number of Free To Air (FTA) channels iv. Charges for pay channels v. Carriage fee for FTA channels vi. Standard sample agreement between LCO and consumer vii. Quality of Service (QOS) standards viii. Complaint redressal system
NOW let us come to the question of why this insistence on DIGITISATION and ENCRYPTION?
Bear in mind that there are about 14 crore TV homes in India, almost 80 % of these are served by cable TV. So with 100% reporting and assuming even a minimum of Rs. 100 per connection payout cable TV will be generating a minimum revenue of Rs. 1200 CRORE EVERY MONTH.
The reasons given for the need for this legislation were- 1. Ensuring authentic reporting of connections by LCOs
2. Improvement in quality of signal – digital over analog leading to greatly enhanced viewing experience for consumers
3. Enhanced signal carrying capacity as present analog system can provide only about 100 channels whereas the same cable can carry about 400 channels after digitization
4. Better control over local signals / casual signals
AND the actual GAINS / LOSSES for different stakeholders are expected to be –
GOVERNMENT (Both Central and State)
1. 60% to 70% estimated increase in revenue (both service tax as well as entertainment tax) 2. Total control over cable TV content 3. 100% censorship of cable TV signals possible if the Government so desires 4. Total control over advertisements through broadcasters/MSOs since encryption will ensure no signal overlay till consumer end 5. Registration fees from MSOs and LCOs
1. 60% to 70% estimated increase in revenue 2. Total control over MSOS and LCOs and hence consumers 3. Total control over advertisements since encryption will ensure no signal overlay till consumer end 4. No additional investment in this digitization 5. Competition in terms of Local / Small Interest Group channels (like Ragini competition) will be eliminated 6. Local advertisements run by LCOs will be totally eliminated, a very small part my even come to broadcasters as a gain
1. 60% to 70% estimated increase in revenue 2. Total control over LCOs and hence consumers (now a captive audience so to say) 3. Total elimination of Local / Small Interest Group channels (like Ragini competition) as well as local advertisements since encryption will ensure no signal overlay till consumer end 4. Substantial investment in this digitization in head-ends and other infrastructure including software required 5. Substantial investment in STBs 6. Substantial investment in customer care systems 7. Substantial investment in LCO management systems
1. Substantial improvement in viewing experience 2. Choice of 400 channels as against only 100 channels at present 3. Additional onetime cost of STB 4. Increased charges for channel packages as no short-cut rates will be offered by LCOs. 5. Since LCOs will loose alternate avenues of earnings from local advertisement and local channels (estimated 20% 0f LCO’s revenue), they will not be offering discounts on subscription to consumers. 6. Absolutely no improvement in channel blackouts because of power outages in the pathway of cable from MSO’s head-end. 7. Customer service provided through MSO’s / LCO’s call center which is mostly a nuisance with wastage of time waiting to get connected and without resolution. 8. Consumers will miss-out on niche channels catering to small interest groups / communities catered to by the LCOs since the groups / communities are not large enough for the broadcasters / MSOs.
Pending CONSUMER ISSUES (under active consideration) raised by VOICE
Pending CONSUMER ISSUES (under active consideration) raised by VOICE:
Issue #1- Benefit of digitization should be available to consumers as well so FTA channels should be increased from 30 to 45 on an all India basis.
Issue #2- The composition should be decided based on local demand; locality (or mohallas) may be a unit for such decisions. We can make some DoorDarshan channels compulsory on an all India basis.
Issue #3- Price for FTA should be same on an all India basis. The MRP for FTA package should be kept at a minimum as consumers are being forced to migrate to a new system wherein they are any way being burdened for paying for STB.
Issue #4- Ensure that a bouquet of 100 channels including FTA should be available for much less than the present prescribed TRAI amount currently charged by cable operators.
Issue #5- TRAI should prescribe maximum limits. Pricing flexibility should be given to service providers in inverse proportion of a channel’s popularity i.e. more popular channels should have more TRAI control and less pricing flexibility to the service providers.
Issue #5- STBs
a. Provision for Porting to another service provider should be there.
b. Whether the customer opts for STB on rent or on outright purchase, maintenance should be the responsibility of the service provider.
c. Security deposit if envisaged should be adjusted over a reasonable period of time say 12 months of continuous connection in the rentals.
Issue #6- LCO should be responsible for customer service because it is better to have a face for consumers.
Issue #7- LCO should continue to do the billing. For the purpose of billing as well as QOS LCO can be treated as fully connected Customer Care face. Current system of relationship between LCO and MSO can be taken forward with the addition of a real time interconnection.
Issue #8- No prepaid system as it is not consumer friendly at all. We should learn from Mobile system and avoid this trap altogether.
Issue #9- From consumers’ perspective more alternatives always help the consumers and maintain market competition. Hence non-addressable digital Set Top Boxes (NA-STB) should also be an alternative offered to consumers.
Issue #10- After sunset date we suspect that there will be a creeping increase in rates on various pretexts as the consumer will be tied to the STB provider. Unless we can ensure the level of competition which exists today among LCOs we will not be protecting the consumer.
Issue #11- Two main issues which are a must for ensuring competition among service providers have not been addressed at all.
a. Portability of Set Top Boxes (STB) – This is the only way service providers can be kept on their toes. We should learn the lesson from Mobile services which has made India the lowest cost market as far as Mobile services go.
b. Ensure that there are at least 3 cable service providers in all the areas.
c. NA-STB should also be an option.
d. A community set up also should be explored like providing a single connection to a housing society to be managed by the society.