Na.Vijayashankar
E-Business and
Cyber law Consultant
11/10, RE
Apartments
Unnamalai Ammal
Street, T. Nagar
Chennai-600017
Web: www.naavi.org:
E-Mail naavi@vsnl.com
Ph: 044-28143448
Dated 16th
January 2004
To
The Secretary
TRAI
New Delhi
Sub: Consultation Paper on Cable TV Regulation
Dear Sir,
With reference to the Consultation Paper released by TRAI
for comments regarding the issues concerning the Cable TV regulation, my
comments are enclosed.
Regards,
Yours Sincerely
Na.Vijayashankar
Comments on
Consultation Note Issues Relating to Broadcasting and Cable Services released
by TRAI on 15th January 2004
By
Naavi
www.naavi.org
(naavi@vsnl.com)
Background:
This note is being submitted to TRAI in response to the
Consultation Note released on 15th January 2004.
The note contains three important points namely,
- Regulation of the Cable TV operators
- Regulation of Advertisements in Pay Channels
- Regulation of Content
A) Regulation of Cable TV Operators:
The Cable TV service is a
service which touches a large section of consumers in the Country. It is one
of the most economical and convenient means of entertainment, education and
news that has replaced the Cinema and the News Papers as the primary medium of
Entertainment and News.
Any mis-regulation of the
sector therefore has a serious impact on the general public. The Prime
Minister Mr Vajapayee has given a solemn assurance that the regulations will
be “Consumer Friendly” and if the regulation is considered Consumer
Unfriendly, it will have a serious political repercussions on the NDA
government in the coming elections.
In the entire structure of the
industry, it is the Cable TV operator who comes into direct contact with the
Consumer and there is a privy of Contract between him and the Consumer. The
MSO s and Broadcasters do not have a direct contractual relationship with the
consumer. Hence any regulation will reach the Consumer only through the Last
Mile operator namely the Cable TV operator and the regulation should provide
for a strong system at the Cable TV operator’s level.
The first step in implementing
the regulation is therefore to set up a Cable TV operator- Consumer interface
as an integral part of the regulation. If this is neglected, any regulation
that is imposed will fail to reach the consumer and the Consumers will
perceive the regulation as Consumer unfriendly.
As an example, we can take the
case of Chennai which has been under the CAS for a few months now. Despite the
Ministry of Information and Broadcasting, Government of India stipulating that
-the FTA
channels would be made available at RS 72 per month and
-Cable TV
operators would issue receipts
The Consumers in most areas are however paying RS 100 per
month and not getting any receipts.
Further no contractual offer is being made available to
Consumers for supply of STBs and the warranties attached to it including
return of deposits in case of STBs being surrendered.
The MSOs have also designated A La Carte charges for
individual channels which are significantly higher than the boquet charges
making boquet purchase more or less inevitable.
ESPN and STAR Sports are forcing consumers to enter into
annual Contracts.
ESPN released an illegal advertisement on 8th
December 2003 in The Hindu stating that Commercial establishments carrying
ESPN should obtain written permission from ESPN by passing the contractual
relationship between the Cable TV operator and the consumer.
Further the Cable TV operators are collecting a large non
refundable payment for supply of STBs as charges for “Smart Cards”.
The Consumers are not in a
position to question these practices since Cable TV operation in most part of
Chennai is under monopoly. Two major Broadcaster-MSO conglomerates namely
Star-Hathway and SUN-SCV control the entire Chennai City Cable TV operations
with exclusive territories in most areas. In a very few areas where both are
operating, frequent sabotage of rival Cable Networks are a common feature.
There have been cases where Consumers have been harassed and there were two
reported incidents of extreme nature one where the Cable TV operator demanded
that the Consumer (A Lady) prostrate before him if the disconnected Cable TV
has to be re connected and another where the two wheeler of a consumer was
burnt by the Cable TV operator’s men.
It is therefore imperative
that the first objective of the regulation should be to free the Consumers
from the monopoly of the Cable TV operators and to provide for a Grievance
redressal mechanism at the Last Mile level.
One of the main reasons for
the development of monopoly is the owning of the Cable TV network by the two
MSOs.
It is therefore suggested as
follows:
1. Cable TV
Regulatory office is set up in each of the Metros where the CAS is introduced
and representatives from the public are appointed at several places in the
City as “Watchdogs”.
2. In
Chennai the “Friends of Police” network can be mobilized for appointing local
representatives to act as “Resident Representatives of the Regulator” in the
respective locality.
3. Every
Cable operator has to be registered with the City office of the regulator. The
local representative will be responsible for acting as an interface between
the Consumers and the Regulator. In the event of any adverse behaviour of the
Cable TV operator, the license of the Cable TV operator should be suspended.
4. In every
locality at least four Cable Operators should be allowed to operate.
5. In the
event of suspension of any of the Cable TV operator, his accounts should be
transferred to the other operators on an equitable basis besides licensing
another operator.
6. The
distancing of the MSOs from Cable TV operation should be achieved by providing
for random allocation of Cable TV operators from one MSO to another at
periodical intervals by the Regulator in such a manner that no Cable TV
operator is attached to one MSO for a period longer than 3 months.
The availability of
competition would sort out most of the Consumer relation problems that are
being faced now.
B) Regulation of
Advertisement
Pay Channels:
In the days of the Free Cable
TV in India, the channels developed advertisements as the key source of funds.
In the present scenario, where
the Pay Channels are getting remunerated by direct subscription, there is no
logic for the Channels to continue to get revenue by way of advertisements.
Further carrying of
Advertisements in the Pay Channels will be untenable according to the
internationally accepted principles of electronic communication. In the
convergent era, there has to be a common law for distribution of digital
signals either through an ISP in the form of Internet or through an MSO in the
form of Cable TV. The laws of Internet are very clear that unsolicited
advertisements are an offence called “Spam” and in many countries, “Spam” is
a punishable offence.
If Cable TV channels in India
are allowed to carry advertisements, then this will clearly amount to
legitimizing “Spam” and the Government will lose any option to regulate Spam
on the Internet in future.
Hence “Advertisements in Pay
Channels” are to be completely banned.
Free To Air Channels:
In view of the minimum
payment being made by the Consumers even for the Free Channels, in principle,
the advertisements in Free Channels are to be considered as “Permitted by
Consumers”.
However, the current levels of
advertisements in Free channels are often beyond any reasonable comfort level
for viewing of programmes since broadcasters have not shown any voluntary
restraint on the ad-content mix.
For example, in a normal
serial in prime time, it is common to see advertisements in a ratio of 50:50
with content. In case of live programmes like Cricket, advertisements at the
end of every over ( 45 seconds for every 4 mintutes), coupled with 20 wickets,
break times, replay times etc, the ad content is much too high for acceptance.
Hence there is a need for
setting some norms for advertisements in the free channels also. It is
therefore suggested that the ad-content ration in respect of pre recorded
programmes (eg Serials) should be less than 25:75. In case of live programmes,
it should be less than 10:90.
It is expected that
broadcasters would argue that the cost of buying the programmes is high and
therefore it is uneconomical to accept the regulation of ad content. However,
it must be realized that if there is a correct estimation of the ad potential
of an event or a programme, the broadcasters will be able to prices the slots
appropriately and also make reasonable bids on event sponsorship. Over a time
the market will adjust itself to the revised rates. In the process the ad
clutter would be reduced and the effectiveness of ads will actually improve.
Any experienced ad
professional will admit that seeing the same advertisements 50 to hundred
times in a day is not a “Desired Exposure Frequency” and can often induce
negative feelings in the viewer.
The ad content regulation will
therefore not have any adverse impact either on the advertising industry or
the ability of the industry to generate funds for sponsorship.
C: Regulation of Content
The introduction of Pay
Channels requiring the STBs have forced a large number of the Cable TV viewers
to remain as subscribers to Free Channels only. In the process, the Cable TV
operators are eager to bundle more and more channels in this category if
available.
As a result of the keen ness
of the Cable TV operators to provide higher number of Free Channels, many
foreign channels often sponsored by alien interests who are not bothered about
the ad income have started making an entry into the Indian homes. When the
quality Pay channels were available, the importance of these channels were
low. However in the present scenario, these channels have gained more
viewership. FTV, Al Zazeera have therefore found presence in the Cable TV
homes and this tendency is likely to proliferate.
It is therefore in the
interest of the Country that the content of all channels are to be regulated.
It is therefore suggested that
a) All
Channels whether free or pay need to be registered with the regulator
b) There
should be a Content Evaluation committee which should examine complaints and
if found necessary recommend to the regulator for fines and withdrawal of
license as may be found necessary.
c) Such a
committee should have adequate representation of the public so that vested
interests do not influence the decisions.
Miscellaneous:
In view of the regulation of
Cable TV operators proposed involving freedom to Consumers to shift from one
Cable TV operator to the other and the delinking of the Cable TV operator from
the MSOs, many of the other concerns expressed in the Consultation Note such
as “Service Regulation” may not be necessary.
A guideline should however be
provided for avoiding a Cartel for STB sales where in a very high component of
non-refundable deposit is not fixed making it completely unviable for the
consumer to avail the service at will needs to be provided. This can be
achieved by insisting that the Consumer can buy the STBs from the free market
and they are not restricted to the choice of the MSOs. If Mobile Companies can
manage the security and allow consumers to chose any equipment of their own,
there is no need to create an unhealthy anti consumer precedent linking the
STBs to the MSOs.
Once the STBs are made free,
there is no case for any non refundable deposit to be collected by the MSOs or
the Cable TV operators. If however any Consumer opts to buy or rent the STBs
from the Cable TV operator, it would be left to the Consumer to arrive at a
negotiated price with the supplier which may involve a combination of fixed
and variable charges. However the Channel charges need to be common whether
the STBs are bought through the operator or otherwise.
This flexibility will also
address the issue of obsolescence of STBs and the possibility of non–return of
deposits by the operators.
Na.Vijayashankar
January 17, 2004
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(Comments are Welcome)
