CONDITIONAL ACCESS SYSTEM
A Bane or a boon
Archana Raghuvanshi & Richa Saxena*
“Life’s great fun, but in boxes…”
This quote calls for modification in the context of the beleaguered cable television service rendered to the consumers perplexedly characterized as the scourge of the present entertainment scenario hence, making it understandably imperative to qualify it with the expression “… barring the idiot box.”
The
consumer is the “SOVEREIGN” in this age of heightened
and exaggerated consumerism where the market players are ‘devotedly’ aiding
the consumers in their holy pursuit of satiating their inherent hedonism.
Ironically, so far as the entertainment scenario is concerned an average
Indian consumer
comes across
as a doleful looking guy begging for being lent an ear to his hard-luck
story about shoddy blacking out of channels by cable operators. Broadcasters
keep nagging the cable TV operator about his sinister designs of wrongfully
underestimating their customer base while the latter charges the TV channels
with sky-rocketing their rates every now and then. This impasse created by
the perennial tussle between the broadcasters and the cable TV operators
afflicts severely the poor consumer, who is at the receiving end from both.
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 some hopes of consumer which were soon extinguished because of the lethargy of the Government in implementing the Act. 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 one wishes to watch and pay for. However, the recent Delhi High Court judgment ordering the implementation of the CAS within four weeks in the four metros namely, Mumbai, New Delhi, Chennai and Kolkata, has created a huge churn in the offing in the cable television industry.
The exponential and unregulated growth of the cable TV penetration in Indian households is responsible for existence of the multiple flaws in the current system such as under-reporting of the number of subscribers by the Local Cable Operators (LCOs) resulting in revenue loss for the MSOs and the broadcasters as well as the Government. This problem was highlighted in the recent order passed by the Supreme Court in Star India (P) Ltd. v. Sea TV Network Ltd. In this case, one of the issues raised by the appellant was that the cable operators and MSOs do not give a complete and accurate list of ultimate subscribers and their area of operation. While the respondents submitted that in the prevalent circumstances, the only manner in which the same can be achieved is through the deployment of an addressable system, which is commonly known as the Conditional Access System (CAS), which would identify the number of subscribers accessing a particular channel.
Keeping in view the nature of the controversy and its likely impact on the broadcasting/TV industry as a whole, the Apex Court through Arijit Pasayat & Tarun Chatterjee J. observed that it would be necessary to give adequate opportunity to all the stakeholders concerned to file their submissions and fixed 02-05-2006 as the next date of hearing. It further observed that pendency of these matters shall not stand on the way of the Central Government to implement the CAS or the TRAI in devising any system to identify and arrive at the correct number of subscribers of each distributor of TV channels.
The existing system is riddled with formidable challenges for the MSOs, which came up before the Division Bench, Mumbai HC [C.J. C L Thakkar and Dr. Dhananjay Chandrachud].
The issue raised before the court concerned the MSOs’ gruelling situation due to the pressure from the broadcasters to clear the dues irrespective of whether the local cable operators had paid the MSOs or not. Evidence in the form of a letter from broadcaster Sony Entertainment Television was also produced, threatening to disconnect signals if the MSO didn’t pay an outstanding amount of Rs. 12.1 million till the due date. It was contended on behalf of MSOs that lack of appropriate technology to control the signals once they left the main control room was responsible for their inability to prevent the defaulting cable operators and consumers from accessing the signals. This plea was accepted by the Division Bench.
Another problem in the existing system concerns the traditionally synergistic relations between MSOs and LCOs. Few years back, a paradigm establishing an incredible shift in the usual trend was in the offing in the cable television industry with groups of small cable operators seeking to break away from the larger networks or MSOs to set up their own control rooms. An independent control room implies that LCOs would have higher returns with no MSOs to share their revenues with. However, it requires a massive investment of Rs 2 crore which would not be affordable by the LCOs. Lucrative ‘carriage fees’ being paid by broadcasters seemed to be contributing to this new trend. However, with the implementation of CAS and digitalization, the encryption technology will provide consumers the choice of, as many as 500 channels; this slight hiccup of breakaway tendencies will dissipate ending the carriage fees regime.
The question of voluntary v. mandatory adoption of CAS?
The latest Delhi High Court judgment brings to the forefront the debate of voluntary v. mandatory adoption of the Conditional Access System (CAS) in India? But, before delving into this debate, let us start with highlighting the key problems that are required to be addressed for the effective implementation of the CAS.
1. Difficulty in voluntary adoption of CAS–The procurement of Set-Top Boxes (STB) will require large investments from the cable operators, which the small players may not be able to afford. It also raises the issue of affordability for the average consumer who will have to pay a much higher fee for receiving pay channels with limitation of choice with respect to channels made available by the cable network as well as free-to-air channel. Further, problem of variable pricing of channels charged differently in different areas would also emerge. It may also contain different channels as per its determination by the government. A subscriber wanting Zee TV only has to pay for the entire networking bouquet consisting of ZEE English, ZEE Cinema, ZEE MGM, etc.
2. Positives of
CAS –CAS
would, in the long run, bring organization and uniformity in the cable
industry. It is evident that the broadcasters often claim huge popularity
and viewership as a justification for charging huge rates from the
advertisers. However, with the installation of Set-Top-Boxes (STB) their
true viewership figures will come into the open, which will put in place a
more accurate and addressable system of data collection. It is also
important to clear the misunderstanding as to the mandatory installation of
STB with the introduction of CAS. The customer can view all the free-to-air
channels (60 channels) at
Rs. 72 plus taxes and if one wishes to watch pay channels he will be
required 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. So far as
the argument of increase in the price of the pay channels with the
implementation of CAS is concerned, there is no reason why the pay channel
rates and the basic tier rates will not go down too because of competition.
In fact, CAS will bring in a market mechanism, which did not exist earlier.
Conclusion
The Delhi High Court’s direction to the Central Government to implement the CAS within four weeks is based on the obscure logic embedded in the consciousness as to the inevitability of CAS. The government is free to appeal against this decision. However, brushing away the issue will help no one. It has become imperative for the Government to create a consensus on crucial issues such as pricing of Set-Top-Boxes and channels- the biggest stumbling blocks to its implementation. In our perception the Conditional Access System is a wise way to resolve broadcastor- distributor conflicts and give more choice to the consumers about the channels they want to watch. A well-regulated system will also give the government more tax revenue.
There is no getting away from the box as a competing distribution platform such as DTH (Direct-To-Home) too requires a device at the customers end. Even IPTV, a service offered by the telecom players through telephone lines will require a Set-Top-Box. Consumers will be benefitted if the strategy is put in place to enable them to rent Set-Top Boxes from the cable service provider. Helpful provisions in the 2006-07 Budget promote more local manufactured boxes. Broadcaster too needs to work out things. The pricing of individual channels and bouquets has been a contentious issue in the past.
TRAI’s recommendations submitted as far back as 2004 could be a good point of reference for the government. Last but not the least it can be safely asserted that all these activities are surely 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, lends credence to this proposition. However, rationalization or satisfaction of the concerns of all segments 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 in consonance with the principles of fairness to all.
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* Students, National Law Institute University, Bhopal (M.P.).