Surf 'N Lather

On March 10, the Delhi high court asked the I&B ministry to introduce CAS (conditional access system) in Delhi, Mumbai and Calcutta within a month. Two months later, neither the regulator TRAI nor the ministry—leave aside the broadcasters and cable operators—are sure about when, or if, it will happen. The broadcasters are fighting against cable operators, TRAI is waiting and watching, and the ministry is policy-comatose. Given these, CAS is unlikely to be implemented before end-2006.

Says Nripendra Mishra, chairman, TRAI, which has sought an extension of the CAS deadline: "We are waiting to hear from the ministry." Adds K. Jayaraman, MD & CEO of leading cable operator Hathway Cable & Datacom: "We have announced schemes like giving set-top boxes (or STBs required to receive signals) at a rent of Re 1 a day. The ministry has to decide when we can start."

The cable operators blame the broadcasters and the ministry for the logjam. Cable Operators Federation of India president Roop Sharma says the government does not want to end the deadlock. "Broadcasters are scared their trps will fall, as their actual viewership will become public information under CAS," she notes. But Anuj Gandhi, president, Set Discovery, a broadcaster, maintains: "We don't see the scheme making sense."

Today, Chennai is the only metro where CAS has been implemented. CAS allows viewers to choose the channels they want to watch through STBs, and pay only for them. Unlike the cable system, where the subscriber pays a flat monthly rate for all the channels. Yet CAS has become controversial.

One of the contentious issues is the pricing of the channels. Cable operators and multi-service operators are fighting for individual or a-la-carte pricing that enables consumers to choose channels, thus decide the monthly bill. They have also asked the ministry to fix a price ceiling on individual channel rates so that broadcasters can't jack up prices.

The broadcasters favour the existing practice of bouquet pricing (a fixed price for all the channels aired). They contend that a-la-carte pricing may force the consumer to pay more. Explains Gandhi: "World over, broadcasters do such deals on wholesale prices. We are willing to do it in India."

However, cable operators feel bouquet pricing is biased against the viewers. For one, it forces them to pay for channels they never watch. Two, it allows broadcasters to hike rates by creating new bouquets. Currently, cable operators cannot pass on the burden to the consumers. Agrees Sharma: "A-la-carte pricing will lighten the consumers' bill."

Broadcasters are also scared that individual pricing will reveal true channel viewership ratings which may be much lower than claims. Since CAS facilitates a close watch on viewerships, broadcasters' top and bottom lines will be hurt as they won't be able to negotiate package, bouquet or advertisement rates.

What may turn the tide against bouquet pricing is the growth of direct-to-home (DTH) television, where too the consumers have the freedom to choose channels. At present, there are only two DTH operators—Zee's Dish TV and Doordarshan's DD Direct Plus. But, by June, others, including the Tata-Star TV joint venture Tata Sky and Reliance's Bluemagic, are slated to join the ring.

Keeping this in mind, the Indian Broadcasting Foundation (IBF), comprising all broadcasters, is lobbying hard. IBF's secretary-general N.P. Nawani wrote to the I&B ministry about the issues. Making a case against individual channel pricing, the IBF stated there shouldn't be a price fixation for CAS. It also wants a guarantee that cable operators don't charge a carriage fee from broadcasters.

Presumably, several meetings held by the ministry after the high court judgement to finalise a rollout schedule for CAS have failed. According to cable industry sources, most broadcasters didn't turn up for the April 7 meeting to decide on the channel pricing issue. Even the ministry isn't in a hurry and may appeal against the court order. So, rule out CAS for the time being.