Cable TV Regulation in India

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Dated 19th January 2004

The Secretary
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.


Yours Sincerely


Comments on Consultation Note Issues Relating to Broadcasting and Cable Services released by TRAI on 15th January 2004




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,

  1. Regulation of the Cable TV operators.
  2. Regulation of Advertisements in Pay Channels
  3. Regulation of Content
  4. 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.


January 19, 2004

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