Friday, 9 October 2015

Last Mile Operator Pushed to the Wall

Time the Governments review the regulations rather than let the small stakeholders rush to the Courts.
Entertainment! as we all know and understand is a medium and source to unwind and relax after a hard and tiring day or otherwise also. In recent past many modes of entertainment have replaced the old ones and medium of entertainment has changed too. However, after liberalization in foreign policies by the Government of India during the early 1990s one medium sprouted like a mushroom in the form of Cable Television Service.
The notable aspect of CATV service was its mass reach that penetrated the Indian Middle Class initially and with thriving pace entered the houses of Indian masses in all classes and social segments.
The strength of CATV can be gauged from the fact that despite the availability of Internet and web services on Mobile hand – set devices, now industry is reaching to OTT service and hence same TV content is made available on the Mobile Phones and other such devices like tablets etc.
The System and technology of providing Cable TV Services has also   undergone a drastic change in the pact. Presently there are four main modes available for Television and Entertainment services (a) Cable TV Network (b) Direct to Home (DTH) (c) Head-end In the Sky and  (d) IPTV. Out of these first two are having biggest market share and catering to the largest number of subscribers. Cable TV service as we all understand from common man’s prospective is service provided by Cable operator  in our local vicinity who is having some small a  control room with electronic eqpt  and  provides cable services to our homes and charges some Rs. 150 to 250/-  per month, depending upon locality and market rate.
During past two decades the cable industry has seen dramatic transition in terms of services technology, legal and Regulatory frame work etc. however one thing that remained unperturbed is the role of last mile Operator /Cable Operator in providing cable service. Today he is facing a  multitude of issues  e.g. (i) un-resolved issue of poor services (ii)  Unfair Revenue sharing with MSO/Distribution Platforms and Broadcasters (iii) Role Reversal in DAS regime, (iv)  Neglected  Treatment from Local and Central Government (v) Non- involvement and un-clear participation  in policy making and regulations etc.
It is again a stark reality that though the entire business of MSO and to a great extent of Broadcasters depends on ‘Last mile Operators’ for generating their higher Advertisement and subscription revenues, yet the Last Mile operator has not been given his share in that big pie. 
LMO has been asked to perform several functions especially in DAS regime which were beyond his capacity as a small operator. He was unaware of what is going to happen next and what kind of modalities and legal requirements he was to oblige.
 It would not be out to place to mention that taking advantage of this hazy situation many big Multi System Operators got unreasonable and one sided agreements signed by these ignorant lesser educated and legally un-aware Operators, who are now made to face litigations in court of law, especially while asserting their rights under such “one sided” interconnect agreements with their MSOs.
One of the recent example is that some MSOs shifted the liability of Taxes including entertainment tax to operators and High Court in many states are trying to resolve the issues.
So far as taxes are concerned, only the applicable laws, various judgments and governing principals settled in or pronounced by higher courts are relied upon. However, on the question of who is liable to pay entertainment tax, LMOs were confused on account of non-expert guidance and sub-standard legal advice and many a times LMO went by the mind of some self-proclaimed union /association leaders who acted on hear - say  advice.
Looking at the above situation, the time has come to resolve these long pending issues of revenue sharing, taxes, legal standing and business security of each stakeholders, either by the government or the courts. The judicial process is always lengthy and hence it is prudent on part of the central government as well as the state governments to intervene and amend/modify the laws and regulations accordingly.


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