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 19th
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 Four important points namely,
- Regulation of the Cable TV operators.
- Regulation of Advertisements in Pay Channels
- Regulation of Content
- Regulation of STBs
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
objectives of Cable TV Operator Regulation is
1. Break the
Monopoly of Last Mile operation
2.Break the
Monopoly of MSOs through Cable TV operators
3. Provide a
local interface for the regulator with the Cable TV operator
4. Make the
Cable TV operator “Customer Friendly”
Presently,
LMO is highly monopolistic. While an individual Cable TV operator has a
virtual monopoly of the local geographical area, MSOs have a monopoly over
large parts of a City. The services are therefore dependent on the whims and
fancies of the MSOs and the Cable TV operators.
In such a
situation the Consumer is not in any position question the Cable TV operator
about unethical practices sine this may result in the breaking of the
connectivity itself and there is no alternative to the Consumer.
In Chennai
where the CAS has been under implementation for some time there have been two
unfortunate incidents which need to be recounted here to establish the impact
of this monopoly. In one of the incidents, a Cable TV operator’s assistant
demanded that the Consumer (A Lady) prostrate before him if the disconnected
Cable TV has to be re-connected. In another incident the house of a Consumer
activist was ransacked and his two wheeler was burnt by the Cable TV
operator’s men.
With the
inability of the Consumers to protest against the monopoly supplier whom they
cannot do without, the CAS system is being abused in many ways.
For example,
i) In many
areas of Chennai, Cable TV operators are collecting RS 100 per month for Free
Channel feeds without issuing receipts.
ii) Channels
are offered as a “Bouquet” and with “Minimum Time Commitments”.
A La Carte
rates are there on paper but differ so widely with the bouquet rates that they
are as good as not being there
iii) The STB
s were initially provided only on “outright Purchase” by the dominant MSO and
only when the consumer resistance grew, a rental scheme was introduced.
However it involves a huge outlay including “Non Refundable Charge”. Since
the STB s are proprietary Consumers have no way of countering this exorbitant
pricing.
MSO s are
also not issuing any written offer letters indicating the warranties attached
to the installation of STBs. Consumers are therefore not confident that they
would get their money back in case they return the STBs.
iv) Additionally the
broadcasters are also flexing their muscles as indicated by the advertisement
issued in The Hindu on 8th December 2003 by ESPN Star Sports. This
illegal advertisement stated that Commercial establishments carrying ESPN
should obtain written permission from ESPN. This was an attempt to prevent
playing of Cricket broadcasts in restaurants which could be used by the
customers. In other words the broadcasters tried to promote the principle of
“One Subscriber-One Viewer”. It is not inconceivable if in future this could
be extended to home TVs to prevent people from going over to a friend’s
place to watch Cricket matches, or playing a Cable TV in a marriage hall or in
front of a TV shop.
These incidents clearly show
that the industry cannot be trusted for “Consumer Friendly” behaviour and the
regulation has to make this happen.
The following
set of LMO regulation is suggested to address the above issues.
1. Cable TV
Regulatory office is set up in each of the Metros where the CAS is introduced.
He should be an authorized representative of TRAI and should be paid an
honorarium to enable him maintain a secretariat. The costs will be funded from
the registration fees collected from the stake holders for providing the
service.
2. All MSOs
and Cable TV operators in the City should register themselves with the
regulator for a fee.
3. Consumers can optionally register themselves with the regulator for a nominal
fee.
4. The
City’s regulator should appoint a “Citizen Representative” in each location.
a.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.
b.In other
Cities, help of NGOs can be taken for the purpose.
5.In every
locality at least four Cable Operators should be allowed to operate.
6.In the
event of a complaint against a Cable TV operator, the regulator will conduct a
necessary enquiry and may suspend the license of the Cable TV operator.
7.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.
8.MSO s
and Cable TV operators should be considered as different stake holders and the
regulator should allocate Cable TV operator to different MSOs in an equitable
manner with the condition that no Cable TV operator is attached to a single MSO for a continuous period of more than 3 months.
9.Norms
should be developed for such equitable allocation which takes into account the
distribution capability of the MSO, his past quality record. A Committee
consisting of the Regulator and representatives from MSOs, Cable TV operators
and public with not less than 50 % of the members being members of the public
not associated with the Cable TV operators and MSOs shall decide on the norms
at each of the center.
10.The TRAI
will have a sub committee to review any complaints against the operation of
the City regulator.
The above
regulation and the breaking of the monopoly should sort out most of the
Consumer relation problems that are being faced now.
B) Regulation of
Advertisement
1. 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.
2. 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 minutes),
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
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 keenness 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
i.;
All Channels whether free or pay need to be registered with the
regulator
ii. 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.
iii. Such a committee should have adequate representation of the public so
that vested interests do not influence the decisions.
D) Regulation of STBs (Set
Top Boxes):
The Set Top
Box (STB) is a technology tool and should not be proprietary to any MSO.
Consumer should be able to buy the STBs from the free market just as Mobile
phones are available to the Consumers fro the free market to be used with any
operator. The Cable TV operator should provide Smart Cards at a nominal price
of less than RS 100/- as an one time registration fee.
The card
should continue even when the consumer temporarily opts out of all Pay
channels and later opts in again. They can be made renewable after every three
years to provide for wear and tear.
This will
remove the problem of “Pricing”, reduction of duties and need for extra
investments that the MSOs have to make as well as the service obligations
which they will never be able to fulfill. The need to collect non-refundable
or refundable deposits and its return will also be no longer an issue once the
STBs are sourced from the market.
Any security
concerns arising out of this “Open Source STBs” can be handled as there is an
existing legal structure in force for “Digital Transmission” in the form of
Information Technology Act 2000. Any manipulation of the smart card settings
would amount to “Hacking” under Information Technology Act 2000 and also
provide for recovery of compensation by the industry under Section 43 of
Information technology Act 2000.
Na.Vijayashankar
January 19, 2004
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(Comments are Welcome)
