In this era of technological superiority,
law has to keep pace with the technological advancements in order to survive the
risk of being termed outdated and hence its growth is as necessary as its
survival in this fast changing world ruled by technological dominance and power.
Hence, law has to undergo the process of renovation and revitalization for this
end and should also have the room for accommodation of technological changes. In
this context he recent Delhi High Court judgment ordering the mandatory
implementation of the Conditional Access System (CAS) with in four weeks in the
metros is worth a mention.
A television viewer has no say in this world of shoddy cable television service
rendered to him. Infact, the exponential and unregulated growth of the cable TV
penetration in the Country has heightened the need for balancing the interests
of all stakeholders involved. The sordid scenario of cable operators blacking
out channels, whenever dissatisfied with the rate hikes effected by the
broadcasters, with least concern for the hapless consumer has been played too
often. Broadcasters accuse cable TV operators of under declaring their customer
base while the latter charge TV channels with increasing their rates every now
and then, especially before major sports events. The customer is at the
receiving and from both. His pleas for the better services at reasonable rates
so far went unheeded. The passing of the Conditional Access System by the
Government has kindled hopes of a better deal in the future.
However, the passing of the Television Networks Amendment Bill 2002, which
authorized the government to mandate installation of an addressable system for
accessing pay channels-better known as Conditional Access System (CAS), has
kindled hopes of consumer, which soon extinguished because of the lethargy of
the Government in implementing the Act. However, the recent Delhi High Court
judgment ordering the implementation of the Conditional Access System (CAS) with
in four weeks in Mumbai, New Delhi and Kolkata, the consumer will now be able to
watch all channels that he chooses to watch. This judgment has shaken woke the
Government from its long slumber which in our perception could prove to be a
better deal in the future.
The penetration Cable TV Business in Indian households
The Cable TV Business industry has evolved into a pyramidal structure with the
broadcasters-Zee, Star, Sony at the top. Below the broadcasters are the multiple
system providers (MSOs) who receive the signals beamed to them by the
broadcasters and distribute them to their franchisees. At the retail level are
the franchisees, the neighborhood cable operators-who distribute a bouquet of
free and pay channels for an all-inclusive subscription to the end consumer.
This exponential and unregulated growth of the cable TV penetration in the
Country has exposed the flaws in the current system. Some of the major flaws run
# The subscribers have practically no choice in selecting their channels or
choosing their cable operators.
# The cable operators are accused under-reporting, deliberately documenting a
much lower number of subscribers than they actually. Hence there is a consequent
revenue loss for the \MSOs and the broadcasters as well as the Government.
# Inaccurate data has made the revenue sharing in a fair manner difficult.
According to estimates the cable operators reports just a fifth of their
subscribers list to the MSO.
Television Networks Amendment Bill 2002
The Rajya Sabha has passed the Cable Television Networks Amendment Bill 2002.
The Bill seeks to regulate cable operations and authorized the government to
mandate installation of an addressable system for accessing pay channels-better
known as Conditional Access System (CAS). The Bill had already been passed by
the Lok Sabha.
# The Conditional Access System (CAS) comes into force on July 14.
# Cable operators would have to offer a minimum of 30 free-to-air television
channels in the basic tier package and charge a fee of Rs 72.
# CAS would first be rolled out in the four metros of Delhi, Mumbai, Kolkata and
# The basic tier must carry three channels of Doordarshan besides other genres
such as entertainment, news, sports, children’s programme and music.
Highlights of the Amendment:
# The Amendment seeks to regulate the operation of cable television networks in
the country so as to bring uniformity in their operations.
# The amendment empowers the Union Government to issue a notification making it
obligatory for every cable operator to show any pay channel through an
addressable system only. The addressable system is mandatory only for those
subscribing to pay channels, and not for viewers opting for free-to-air
# The Government will fix the maximum amount, which a cable operator may charge
a subscriber for receiving free free-to-air channels included in the basic
service tier. This could vary from stet to state and city-to-city.
# The amendments makes it mandatory for every cable operator to submit to the
central Government information on the number of total subscribers, subscription
rates, and the number of subscribers receiving programmers transmitted in the
basic service tier or particular programme/set of programmers transmitted on the
The latest Delhi High Court judgment brings to the forefront the debate of
voluntary or mandatory adoption of the Conditional Access System (CAS) in India?
But, before analyzing whether this technology should be mandated, it is
necessary to lay down a brief outline of the working of this system.
What Is Conditional
Conditional Access System (CAS) is a technology that enables television signals
to be accessed by consumers through an addressable system hereby allowing the
consumer to choose channels that she wishes to watch and pay for.
With the implementation of CAS, all pay channels will be routed through a set
top box, which will have individual or bouquet pricing. Free-to-air channels
will be delivered as a part of the basic cable TV fee, for which no STB is
required. More than 65 FTA channels will be provided at a basic cable TV fee,
which are Rs. 72 plus entertainment taxes. With a fixed basic service charge,
consumers will then have the option to choose between different cable
distribution channels, or choose between different cable distribution channels,
or bouquets. The best-case scenario, from the consumer point of view, he would
be paying roughly the same amount, say Rs. 200 per month now, but fewer channels
of his choice with better service and hopefully- no blackouts.
Working of System - CAS is composed of a combination of scrambling and encryption
technology that is designed to prevent unauthorized reception. Encryption is the
process of protecting the secret keys that are transmitted with a scrambled
signal that, in turn, enable the descrambler to work. The scrambler key, called
the control word must, of course, be sent to the receiver in an encrypted form
as an entitlement control message (ECM). The Conditional Access subsystem in the
receiver will then decrypt the control word only when authorized to do so. The
authority to decrypt is sent to the receiver in the form of an entitlement
management message or EMM.
The layered approach is fundamental to all proprietary CA systems in use today.
Typically the control word is changed at intervals of 10 seconds. The
entitlement control message, sometimes also referred to as the multi-session
key, is also changed, typically at monthly intervals to avoid hackers gaining
access. Thus both mechanisms assure the continuous security of the CA system.
The Question Of
Voluntary V. Mandatory Adoption Of CAS?
To analyze whether this technology should be mandated by the government or
should be left open to the market players to be voluntarily opted for, let us
start with highlighting the key problems that are required addressed for the
effective implementation of the CAS.
1. Voluntary Adoption of CAS is difficult
The cable operators/ MSOs will need a set of equipment through which such
television signals can be monitored for each subscriber to account for
appropriate collection from them and subsequent payments to broadcasters. The
cable operators/MSOs will also need to procure set-up boxes (STB) to be able to
provide them to consumers for a defined price. This will require large
investments from the cable operators, which the small players may not be able to
afford. The consumers will need to procure a STB from their cable operator if
they choose to watch pay channels that they watch today.
2. Affordability for the Average Consumer
# The consumers will have to pay a much higher fee for receiving pay channels
and its choice will be restricted to only those channels made available by the
cable network. The consumer will also not have the choice of watching the
free-to-air channel of his choice.
# The bill also proposes to
"legalize" consumers being charged differently in
different areas to receive the basic service which may contain different
channels as may be determined by the government.
3.Expected Consumer Response
# Consumers opting for set up boxes to access pay channels would depend on the
affordability and choice factor. Pay channels would find few-takers if majority
of consumers perceive them as exorbitantly priced. The problem of major
broadcasters like Star, Zee, Sony not pricing channels individually and making
them available in bouquet form still exists.
# A subscriber wanting Zee TV only ha to pay for the entire networking bouquet
consisting of ZEE English, ZEE Cinema, ZEE MGM, etc.
II. Positives of CAS
It is important to clear the misunderstanding that it is mandatory to purchase a
set-top box with the introduction of CAS. The customer can view all the
free-to-air channels (60 channels) at Rs 72 plus taxes. However if he wishes to
watch pay channels, then he will have to install the STB which will be available
for a refundable deposit of Rs 999 and rental at the rate of Re 1 per day. Also
some installment schemes are being worked out by the MSOs. A STB is even
required for pay channels in DTH.
# There are many pay channels entering the foray every single day and each
consumer has to pay even for all channels that he does not view. But with CAS,
the consumer can easily budget is entertaining expenses and also view programme
in the order of his preference, genre, favourites, etc. He will also have the
option of value-added services.
# The Government has the power to fix the maximum that cable operator’s can
charge for viewing the free-to-air channels in what is called a basic tier.
# CAS will put place a more accurate system
of date collection, the actual viewreship and its distribution over the different channels. This is of immense
utility to the advisers, their clients as well as the telecasters.
# Broadcasters of so-called premium channels often claim huge popularity and viewership as a justification for charging huge rates from the advertisers for
their programmes. With the installation of set-up-boxes their true viewership
figures will come into the open, which would be helpful in assessing the actual
popularity of pay channels. This is important for them while negotiating rates
for advertising slots.
With CAS Consumers can hope for a better deal- Leading MSOs -- Hathway, In
Cable and Siticable -- said CAS is useful for all stakeholders, including
broadcasters, cable operators and end consumers. Multi-System Operators [MSOs]
said that they are ready to roll out Conditional access system for cable
broadcasting in the four metros. CAS would also bring in addressability, solving
the never ending feud between cable operators and broadcasters on
under-declaration of subscribers and provide a clear indication of numbers for
pay channels chosen and viewed by customers.
The LCOs, being the front-end dealer with the consumer, face the flak for
television blackouts and are also at the receiving end from the broadcasters.
CAS will eliminate all this. CAS would also enable the cable industry to become
more organized, healthy, and uniform and hence less fragmented. Thus increasing
transparency in the distribution and exposing certain myths in the viewer ship
patterns. CAS also brings in numerous technological benefits such as capacity up
to 1000 channels, MSOPS like Hathway and SCV have already rolled out CAS in
Chennai very successfully and also promoted their digital cable TV services in
III. Media Generated Myths Creating Uncertainty about CAS
The government notification issued on 15 Jan 2003 mandated use of CAS by MSOs
and cable operators within six months by 14 July 2003. This has triggered
misinformation, myths and negative press stories that have the potential to
derail the process. The main myths and misinformation about CAS are:
CAS is a crackpot scheme by the government -
90 per cent of the world cable
market where it is deployed agrees that CAS is essential and is the only
solution to an organized cable industry.
# Operator’s resort to massive under- reporting-
In the absence of CAS is
required to curb ‘under-reporting' their subscriber base; and broadcasters
demanding payment from all homes resulting in a stand off.
# 6.7 million Boxes will be required- The reliance should not be on exaggerated
estimates rather experiences in other countries might prove to be useful in this
regard. It took other developed markets like the US and Europe over a decade to
achieve one third of this level. They did not have the problems of low
purchasing power. Further there would be no need for all homes to buy a box if
the free to air/basic tier gets more attractive with many more channels and
perhaps some 'pay' channels may also become free.
# Boxes will cost Rs 7000; cheaper boxes are easily hackable- The box
manufacturers out here are the same top companies, which cater to the world
market. Nearly 77 per cent of homes in leading cable markets like the US still
rely on low-cost analogue technology. It's again a myth that all analog systems
are easy to pirate. Box costs vary from Rs 2750 (analogue) to Rs 5000 (digital).
# The subscribers’ monthly bills will not go down- Competition took average
cable rates from Rs 100 to a just Rs 157 over a decade- a 57% increase when pay
channel costs shot up over 500 per cent in the same period. Post CAS, there is
no reason why the pay channel rates as well as the basic tier rates will not go
down too because of competition. Thus if a channel's product and rate are not in
line with competition and market realities, it will not survive. CAS brings in a
market mechanism, which did not exist earlier.
# Even broadcasters are not keen on CAS-
The broadcasters will now have a system
paid for by operators and subscribers that better controls their revenues and
can reduce piracy ('under reporting') by over 90 per cent.
# Nowhere in the world has CAS rolled out so quickly-
Neither had many parts of
the world started without regulations and exclusive operating licenses. If cable
had started like cellular phones or basic telecom, CAS would have come in long
before a government mandate. The government is on the right track and any delay
will only postpone the inevitable.
The Worst Case Scenario- When both operators and broadcasters see that there is
no roll back and yet there is a shortage of boxes, they will be forced to work
together and cut deals to ensure a faster roll out. Broadcasters will provide
their signals on the free to air tier for a limited period against the operator/MSOs
assurance to order more boxes. They would then work together to meet
subscription targets within a specified period after which the channels would
revert back to the pay mode. This would be a win-win situation for both of them,
and would help manage the interim shortage.
IV. The DTH Angle
The debate on CAS has overshadowed the introduction of direct to home television
service. In the long run consumers will have to make a choice between CAS and
DTH. A comparative analysis of the two systems may prove to be helpful in
assessing the advantages and disadvantages of the two:
Though DTH does not require the services of the LOC’s who remain indispensable
in case of CAS, however DTH is costlier in terms of installation costs for the
subscriber and companies have to pay 10% revenue share to the government unlike
CAS. Further the technology for DTH has been stipulated which would ensure the
working of DTH set-top box as before in case of shifting from one city to
another unlike CAS. Instead of taking this technology neutrality as a
disadvantage of CAS, the brighter side of CAS should be seen because the
government, in accordance with the technological advancements, may always
prescribe the technology for decoding and subscription management system for CAS.
This flexibility would also offer more choices to the consumer also.
We would like to conclude this article by saying that the mandatory
implementation of CAS is certainly going to cause an initial discomfort to each
of the players in the value chain and accordingly the likelihood of this system
to work voluntarily seems difficult. The fact that a couple of years have
already passed since the last time CAS was introduced, bears testimony to this
reality. However, it is by no means easy to either rationalize or satisfy the
concerns of all segments. This is an inevitable task and the government’s demand
to ask for more time to find a solution for smooth transition seems justified.
What remains to be seen is how within a limited time the government deals with
this complex issue in a manner, which is fair to all.
Findings and Suggestions:
# The government should decide to manufacture Set-Top-Boxes locally rather than
their imports-This issue also arose after the passing of the Cable Television
Networks Amendment Bill 2002 was whether the Set Top Box (STB) should be
imported to meet the immediate demand after the mandatory implementation of CAS
or they should be manufactured locally. The Minister for consumer affairs Naren
De also brought up this issue earlier in 2003. It was urged that local
manufacture of STB’s would encourage domestic manufacturers as well as generate
Variable pricing of the channels- Channels could be priced differently across
cities, as per the local demands. The government’s decision to allow channels to
opt for variable pricing had also caused some initial uneasiness among various
consumer groups. But from the legal standpoint, variable pricing is not illegal.
However the same channel should not be priced differently within a city.
Refrain from amendment-The Government should abstain from amending the law in
order to by pass the judgment.
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