THE BROADCASTING BILL ITS IMPACT ON THE CABLE TV INDUSTRY

Cable TV in India started with one video channel in 1989 by small entrepreneurs giving a low cost entertainment to the masses including educational and informative programmes. Low cost of this service and variety of programmes made the industry grow to a gigantic size of 18 million households in a short span of “/years. Today we have :

(i.) More than 70,000 cable operators in the country.

(ii.) 18 million cable TV households.

(iii.) More than 50 entertainment, information and educational channels

(iv.) Employment to 12 lakh people.

(v.) Revenue of 2200 crores annually from subscription only.

(vi.) Additional revenue through local advertising, hardware sale, local programming etc.

(vii.) Industry started as an unorganised sector supported only by small operators’ personal grit, finance and spirit to venture into something ew. But all this would not have happened if market had not supported it. After the incessant efforts on the part of these small operators, government recognised them as a Small Scale Service and Business Enterprise in February 1994. However except giving a legal recognition, there was nothing much achieved. Getting afraid of satellite explosion, cultural invasion and what not, the Ministry of Information and Broadcasting mooted the Cable TV Networks (Regulation) Act in 1994, which received Parliament’s nod in 1995.

(viii.) Now all small operators are registered under the Cable TV Networks (Regulations) Act, 1995. 

The Cable TV Act of 1995 failed miserably to regulate the industry, mainly due to lack of will to implement the same. However, this gave opportunity to many business houses to enter the field to make a quick buck competing with the existing operators. Thus started the war between the operators and the MSOs.

To grab the market MSOs have used all kinds of fair and unfair tactics like coercion, armtwisting, using mafia, influencing police, politicians and the local administration.

They even monopolised the prime-band to popularise their own channels and demanded hefty sums from broadcasters as carriage-fee.

Instead of consolidating the market as it is commonly believed, they have disintegrated the market by creating dummy operators and mistrust among the existing operators.

Inspite of all their efforts the market is still in the hands of small operators who have now grown to the size of average 1000 households in big cities and 100 or less households in rural areas. All the MSOs combined do not hold more than 20% of the market. Even this market share is through their franchisees who are basically small operators having no permanent alliance with any MSO.

Some Facts :

1. Subscribers are serviced by small operators whether independent or franchisees.

2. Distribution of signals, maintenance of networks, collection of subscription is done solely by the small operators and franchisees.

3. MSOs efforts to go direct to subscriber have met with strong opposition and failed.

4. Investments made by small operators combined are 4-5 times more than the MSOs.

5. Small operators are continuously upgrading their systems whereas the MSOs have shown no inclination to improve their services. Examples are many:-

(a) MSOs are still using 450 MHz. equipment whereas some operators have upgraded their networks to 550MHz.

(b) MSOs do not have sufficient connectors and jointers to join cables cut due to accident or sabotage. One Km. of 500 series cable may have 5-6 local joints degrading the signal quality to the franchisees.

(c) MSOs are still using 500-series cables on trunk lines, which are normally meant to distribution.

(d) Pirated cassettes of very poor quality are being used in many of their head ends for the video channels.

How the government gave them permission to start this business when there were no proper regulations is questionable. The same government has withheld clearance to many new ventures now, with the plea that action would be taken only after the Broadcasting Bill gets the OK.

Since the Government failed to regulate 70,000 Cable Networks through the Cable TV Act, they have now drafted the Broadcasting Bill whose fate is still hanging in dark due to the present political crisis in the country. This Broadcasting Bill is expected to superseed the old Cable TV Act and bring about radical changes in the Satellite & Broadcasting industry in the country. Some of the main highlights of the Bill are: -

1. There will be an autonomous body called “ Broadcast Authority of India” that will look after private broadcasting in the country.

2. Licenses will be given to a person in only one of the following categories:-

(i) Terrestrial radio broadcasting.

(ii)Terrestrial television broadcasting.

(iii) Satellite television broadcasting.

(iv) Satellite radio broadcasting.

(v) Direct to Home broadcasting

(vi) Local delivery services including Cable TV and MMDS.

(vii) Any other category or categories of services, which may be notified by the Central Government for the purpose.

(viii) Two parties to be granted licences for local delivery service for each telecom circle.

(ix) Cable TV (Regulations) Act 1995 to be repealed. All existing registered operators with less than 5000 connections to continue to operate.

(x) Local and government bodies barred from obtaining licences for broadcast services.

(xi) Foreign Equity in terrestrial broadcasting is barred; This will be allowed in other services up to 49%.

(xii) Media cross-holding limit of 20%.

(xiii) Uplink from India mandatory for all services. Reasonable time to be given to shift base to India.

BROADCASTING BILL NEEDS IMMEDIATE CORRECTION 

Negative impact of the Bill.

1. It will slow poison the small operators by taking the path of least resistance of giving licences for telecom circles, thus denying them the right to do their own business as provided under Article 19 of the Constitution.

2. Will render investment of small operators worth Rs. 1800 crores useless.

(i) Lakhs of people will become jobless.

(ii) Create monopolies in electronic media.

(iii) Result in information manipulation by the Corporate Houses managing the cable networks as well as MMDS.

(iv) Escalate cost of services to the viewers.

(v) Create a duplicate infrastructure of broadband services, one of the Basic Telecom operators and the other of the licensed cable operators, causing national wastage of finance, manpower and material.

(vi) Escalate unfair competition between the big and the small, deteriorating the service to subscribers.

(vii) Deny personalised service to the subscribers.

Hence there is a need to regulate the existing industry rather than for creating a new one.

OUR MAJOR OBJECTIONS:

Clause 17 (1): Licensing of Local Delivery Services. 

It is being viewed as a mechanism engineered to kill the business of Cable TV operators.

Auction of areas of operation on the lines of DoT circles to two bidders i.e.. 40 licences for the country for ten years under Section 17(1) of the proposed Bill will restrict -

1. Only 6 to 7 Indian mega corporates to monopolies the business or 1 or 2 multinational giants to take over

2. Being the highest bidders, can increase the service charges from the average of Rs 100 per month to Rs. 500-600 per month or more per subscriber, to recover the cost of bid with profit and interest.

3. These monopolies will develop the market only in the Metros leaving the rural areas far behind.

4. In the rest of the country, DTH will be encouraged.

Solutions.

1. Allow grant of annual licence to existing registered cable TV operators under Section 35 of the proposed Bill.

2. Licensing of cable TV networks on Telecom circle basis should be withheld for the next five years to allow existing networks to grow in a regulatory environment. Even after five years, the final distribution should remain with these cable operators.

3. Since the MSOs are not servicing the subscribers, they should be disqualified for grant of license under this section.

Definition of local delivery services as given in Clause 2 (t) includes Cable TV and MMDS.

MMDS (Multi channel Microwave Distribution System) being a wireless service as opposed to cable TV, which is a wired service, should be clubbed with terrestrial services for licensing.

Clause 35 : Repeal of Cable Television Networks (Regulation) Act, 1995

Cable Television Networks (Regulations) Act, 1995 should not be repealed. Government should try to implement it in letter and spirit.

Solutions.

1. License should be granted to all those who are registered with the post offices under the Cable Television Networks (Regulations) Act, 1995.

2. First right of operation in an area should be given to these operators.

3. As far as cable TV is concerned Cable Television Networks (Regulations) Act ’95 and Cable Television Networks Rules ’94 are adequate as they already cover the registration of networks, prescribed programme code and advertisement code, compulsory transmission of two Doordarshan Channels, conforming to the Indian Standards for equipment and transmission to ensure noninterference of cable TV network with the functioning of authorised telecommunication systems.

Some of the points not dealt by the Cable TV Act should be considered now.

(a)Laying of Cables. A central policy needs to be framed on the subject for all state governments to follow.

(b)Stealing of Signals. There is no regulation for prosecuting non- paying subscribers or persons who steal cable TV signals. This needs to be made a cognisable offence.

(c)Entertainment Tax. There are no guidelines laid down for levying entertainment tax on cable TV subscribers. All states are levying this tax according to their will. This must be regulated.

(d)Copyright Act. Copyright Act has not been amended to clearly distinguish between various types of rights applicable to the Satellite and Broadcasting industry. This has resulted in undue increase in court cases, harassment to cable operators, extortion and exploitation in the name of copyright violations.

(e)Pay Channels. All pay channels like ESPN, Zee Cinema, Star Movies, NBC are doing their business with cable operators without being governed by any regulations. There has to be some norm for operating such pay-channels, particularly for subscription-rates.

(f)Cable Channels. A number of cable channels with mixed programming are being operated using VCRs by the Multi System Operators. Channels like Siti Channel, INCable, CVO attract a good amount of advertisement and are operated all over the country. The Broadcasting Bill does not mention if a separate license is required to run these VCR based local channels or if every one is free to make any type of programme and show through VCR in a cable network.

ACTION TO BE TAKEN BY THE GOVERNMENT

1. Government should encourage operators to form cooperatives and give them financial help to improve their networks to meet the laid down standards.

2. Proclaiming that cable television is also television-constituting Broadcast and hence a Central Govt., Not a state Govt. subject, in that BAI only should be empowered to ascertain charges and/or taxes to be levied at uniform rates.

3. Provide for nomination for at least 3 members from cable TV field on the BAI (Section 3(8).

4. Specify minimum charges that can be levied for free to air, or pay channels, from the subscriber on per channel per month basis.

5. Like it has been done for the Telecom Industry, Cable TV should be declared as the National Infrastructure Industry as both these services are going to converge soon using the same infrastructure. All privileges of the Infrastructure industry like tax holidays, low custom duties, help from finncial institutions etc. should be extended to this industry too.

6. Cable Operation should be brought into the ambit of essential services thus protecting the rights of the operators as well as the subscribers.

7. Action to resolve various operational issues mentioned above should be initiated immediately.

8. Strict control on the Pay TV channels to be initiated to stop exploitation of the operators and subscribers.

It is not the question of how much money can we spend or how much technically advanced the small operators are, they are confident in giving what the subscribers want.

Subscribers in India are not prepared to pay the high cost of value added services to make their operation economically viable. What they need at present is a few entertainment and information channels at low cost with reasonable quality. Since there are no addressable systems vendors, and the equipment is not within the reach of small operators, subscribers have not felt the need to pay more for these pay-channels.

Any unreasonable regulations at this stage may have very far-reaching effects in throttling this infant industry, which, in the coming years, is expected to yield maximum growth. We expect that notwithstanding the political scenario in the country, all interested parties from all over the world who are trying to make a dent in the Indian market will cooperate with us in the progress of this industry.

By: MRS. ROOP SHARMA

Source: http://cablequest.org/articles/broadcast-bill/item/1285-the-broadcasting-bill-its-impact-on-the-cable-tv-industry.html
Source: http://cablequest.org/articles/broadcast-bill/item/1285-the-broadcasting-bill-its-impact-on-the-cable-tv-industry.html