Sunday, 21 September 2008

Is Our Time Now?

The LCOs have been given a new lease of life with the final Recommendations of TRAI for Restructuring the Cable TV Services. Now it is the turn of LCOs to give it back to the government by preparing their networks for the New Generation Network Services, feels Roop Sharma, President of the Cable Operators Federation of India.
TRAI has finally given their recommendations on 'Restructuring of Cable TV Services' on 25 July 2008. Their efforts are highly commendable because the recommendations, apparently has been finalized after studying every aspect of this unorganized industry. These recommendations will undoubtedly pave way for a growth oriented future of the industry where this vast infrastructure of 78 million connections will get converted into a state of the art New Generation Network infrastructure. However I wish to emphasise to all cable operators that-

• This will not happen unless cable operators put in their best in understanding the new technologies like digital transmission, digital modulation techniques, IPTV, High Definition, Head-end in the Sky (HITS) and the concept of addressability.
• Also, they will have to decide now as to which technique of digitalization should they adopt. TRAI has given them option of QAM Modulation using CMTS and cable modems on their existing HFC networks and IPTV transmission using fiber to the building terminated at the customer end on CAT-5 cables and IPTV set-top-boxes.
• They will have to consolidate their networks making large networks because the fiber optic network is viable in a large size only. The more the number of connections in a single network, the more the savings from economy of scale.
• When TRAI placed the draft recommendations on their website on 15 July, we found certain points not in the favour of the LCOs and some of our earlier points were not given proper attention. However, after we raised some observations, TRAI has considered all of them in right earnest and the final recommendations have been modified accordingly. 
• Renewal process
• One of the condition for renewal of license was that the Licensing Authority shall seek comments from the concerned authorised officer specified in the Cable Television Network (Regulation) Act, 1995, and from the concerned entertainment tax and service tax authorities to ascertain about any breach of the licensing conditions or arrears of taxes if any.
• We observed that in many circumstances, the entertainment tax or the service tax authority may not give favourable comments about a cable operator. 
• If there is some pending dispute regarding the number of connections held by a cable operator, although he may be paying the taxes regularly. 
• In the past it has been seen that many a times the broadcaster's agent/ Distributor use the tax authorities to pressurize the cable operator to increase his connections so that they can also demand increased payments.
• Some times a corrupt inspector also resorts to black mailing a cable operator in order to extract huge bribe from him. 
• Even distributors of MSOs at times resort to such a blackmailing bribing the Tax Inspectors to either get rid of an operator from their area and capture his network or to increase the monthly payments.
• In such a case and in the absence of addressability, it could cause undue delay in the renewal process or even lead to cancellation of license.
• In the final recommendations this clause has been modified and tax authorities are not directly involved in the renewal process. 
Content related responsibility in the case of signals received from MSOs 
LCOs shall no more be responsible for the content provided by MSOs/Broadcasters, Under the CATV Networks(Regulation) Act, 1995, they were responsible for all content, whether provided by the broadcaster, MSO or their own.

Local Video Channel 
The draft recommendations did not allow the LCOs to transmit their ground based channels. Sice this is the main identity of the LCO and a major revenue source, we protested against it and now TRAI has permitted the LCOs too to transmit their local ground based channels.

Encouragement for Digitalisation 
The biggest boon for the LCOs in the rural areas if the recommendations are accepted by the government will be monetary support from the Universal Services Obligations Fund (USOF) if they digitize their networks and provide the broadband services like Internet and VOIP. I am sure many telcos will approach them to integrate their networks with their back bone with the triple play services. I wish they had done the same for cities too. 
With these path breaking recommendations TRAI has done their bit. Now the LCOs have to get down to work to digitize their networks and make them fit for the future.


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