Come 2014: DAS still in Limbo

Year 2013 has come to an end and we are yet to see any substantial progress in DAS implementation. Going by Telecom Regulatory Authority of India data, the top three metros are fully digital. The next 38 towns are 75 per cent digital but the situation on the ground tell a different story. There are over 19 million subscribers across 41 cities that are covered under Phase 1 and Phase 2 of digitisation.

Chennai is still struggling with analogue cable as state run ARASU cable has not been given a DAS licence by the Ministry. Company has now approached High Court to get their licence which the I & B Ministry has been holding on the basis of recommendations of TRAI on issues regarding ownership of media by states and government bodies. 

While admitting plea of ARASU, the Madras High Court has said there cannot be any disconnection of cable TV signals of the Tamil Nadu Arasu Cable TV Corporation (TNACTVC) Ltd., in Chennai Metro area pursuant to an announcement by the Telecom Regulatory Authority of India (TRAI), New Delhi, that transmission of analog cable TV signals in the area was illegal. Since the petitioner had licence for MSO, it continued to give analogous signals as per the erstwhile regulations. It had taken steps to get the DAS licence, said the court. The Court has also asked the Ministry of Information and Broadcasting (MIB) to take a decision on Tamil Nadu Arasu Cable TV Corporation’s digital addressable system (DAS) licence. 

In Kolkata around 100 LCOs - some affiliated with Siticable, others with Manthan - have come together and invested between Rs 2 and Rs 3 crore toward setting up a headend and accompanying infrastructure at Salt Lake College More in the city to start their own DAS network. This group is setting up a cooperative venture. With the LCOs’ rising concern over MSOs becoming the owners of their hard-won subscribers, the development does not come as a surprise to the industry. This trend is spreading in many other cities too where LCOs are coming together to launch their own digital cable networks.

Gross Billing Holding up DAS Implementation

Although TRAI has time and again been warning MSOs and LCOs/ LMOs to comply by its regulations, tariff orders and directions MSOs and LCOs are finding it very difficult to go ahead as many basic issues regarding billing, revenue share, taxation, integration of SMS in the system and submission of CAF forms are yet to be resolved. Every day reports are coming in the media regarding ongoing disputes between MSOs and LCOs and some some disputes have even been taken to the court but TRAI seems to have turned a deaf ear to them and is sticking with its tough stand of compliance to its regulations. 

On 02 December TRAI issued a direction to all the MSOs in Phase I to:

(a)offer cable TV services to its subscribers on both pre-paid and post-paid payment options and generate bills for subscriber;

(b)give to every subscriber the bill, on regular basis, for charges due and payable for each month or for any other agreed period and the bill for the period ending the 30th November, 2013 shall be given to the subscriber latest by the 15th December, 2013, as per the billing cycle agreed between the parties; 

(c)provide itemized bill to the subscriber clearly indicating the price of channels or bouquet of channels along with the name of channels in the bouquet, charges for basic tier and channels comprised therein, charges for set-top-box, charges for value added service, the details of taxes along with the rate of taxes and Service Tax registration number and Entertainment Tax registration number; 

(d)ensure that a proper receipt is given to the subscriber by it or its linked local cable operator for every payment made by the subscriber;

(e)provide to the pre-paid subscriber, at a reasonable cost, the information relating to the itemized usage charge showing actual usage of service; and

(f)submit compliance report by the 31st December 2013 for the areas of the National Capital Territory of Delhi, Municipal Council of Greater Mumbai and Kolkata Metropolitan area.

Also again TRAI issued another direction on 13 December to 118 MSOs of DAS areas after noticing that multi-system operators have not reported the requisite details of tariff packages along with the terms and conditions for supply and installation of set top box (STB) to consumers, till date. It directed the MSOs to submit the requisite details within 7 days from issue of this direction.

As per the above directions MSOs are to give every subscriber the bill for charges due and payable each month or for any other agreed period. The bill should be itemised, giving details of the name and price of channels in the bouquet (package), the service tax and the entertainment tax levied. The onus is on the MSOs and LCOs to make sure the bill reaches the customers on time and to maintain co-ordination and ensure that a proper receipt is given to the customer on payment.

LMOs (last mile operators) or LCOs are unhappy with the Telecom Regulatory Authority of India (TRAI) ruling on consumer application forms (CAF) and billing, which according to them, makes multi system operators (MSOs) the owners of consumers infringing on their Fundamental Rights.

In Maharashtra the multi-system operators (MSOs) are finding it difficult to comply by TRAI directions as they are still struggling to smooth out the issue of gross billing to LCOs. 

While the deadline set by the Telecom Regulatory Authority of India (TRAI) to achieve 100 per cent customer application forms (CAFs) for phase II cities and submitting compliance report for gross billing for phase I cities came to an end on 31 December 2013, the MSOs have been unable to start gross billing in Maharashtra. Issue of entertainment tax, which is supposed to be included in the bills generated to the consumer, is in the Bombay High Court holding the MSOs to generate gross billing.  The MSOs are claiming to have achieved 90-95 per cent CAF and also submitted the compliance report for Delhi and Kolkata to TRAI. 

The last mile operators (LMOs) in Maharashtra have decided to not allow gross billing till the case is in the Bombay High Court. Though Hathway has verbally agreed to give partial access to its subscriber management system (SMS) to the LMOs and said that while it will bill the LMOs, the latter can bill the subscriber, thus being the owner of its subscriber, there has been no response from other MSOs.

The MSOs say they have already generated the bill for November and have passed it on to the LMOs who have to give it to the customers. Considering the LMOs’ tough stance on the issue, particularly in Mumbai, it is unlikely that the MSOs will be able to start billing. 

The LCO/ LMOs are also unhappy to move forward on billing since the MSOs have not signed interconnect agreements. They are also demanding the right to bill consumers, as has been the case in the analogue regime. 

In some networks in Delhi MSOs are sharing their SMS and Billing system with the LMO so that he can generate his own billing for consumers adding entertainment Tax. For national MSOs such arrangements are difficult to implement on all India basis. 

Cable operators demand a 10 year licence 

Cable Operators Federation of India (COFI) had always been requesting the Ministry as well as TRAI to maintain the independence of LMO’s business so that he would feel secure in the DAS regime but nothing has happened in this respect. Now, cable operators associations in different states are approaching the High Courts to protect their fundamental rights. 

The Federation has also written to the Ministry and TRAI to give a licence to the registered LCOs/ LMOs for a period of ten years in line with broadcasters and MSOs so that no one can bully them out of the industry taking shelter of the DAS regulations.

COFI has also requested the Regulator to give its recommendations on status of aggregators soon as monopolies by large aggregators is one of the biggest factor creating hurdles in implementation of DAS.

Problems of Right of Way (RoW)

DAS regulations also mandate every state government to provide right of way to cable operators and MSOs. Many states have framed their policies in this respect but many have yet to react. Rates for providing the RoW are so exorbitant that it will create a big hurdle in building an organized network infrastructure. 

The Greater Guwahati Cable TV Operators Association(GGCTOA) in its emergency General Meeting held on 20 December 2013 at Ulubari resolved to protest through Black Out of transmission of Cable TV the arbitrary charges fixed by Assam Power Distribution Company Ltd (APDCL) on utilization of poles of electricity. APDCL had earlier on Sep’13 issued notice through News Papers regarding fixation of Rs 25/- per pole per month as utilization charges of poles of electricity which is mostly used by Cable TV Operators for running the Cable TV Network. Till date there were no charges or rentals of the poles although the GGCTOA during 2008 had proposed the then ASEB to legalize the pole utilization by charging reasonable rate.

The multi-system operators (MSOs) and internet service providers (ISPs) in Bengaluru will also have to loosen their pockets and pay tax to the Bruhat Bengaluru Mahanagara Palike (BBMP) for cabling on main roads and the arterial roads of the garden city. While initially, even the local cable operators (LCOs) were in the BBMP hit list, the body, in its meeting last month has released the LCOs from paying the taxes for using its services. BBMP has formed a committee to decide on the tax that both MSOs and ISPs will need to pay. 

Rationalisation of Entertainment Tax

Entertainment Tax is another issue that is a big hurdle in DAS implementation. Although the Tax has to be collected from the subscribers, rates of tax across all states vary so much that in some states consumers are reluctant to shell out such huge amount. 

The multi-system operators (MSOs) in Kolkata have urged the state government to maintain leniency in amusement tax collection as they are yet to collect money from the end customer. The MSOs in Kolkata were so far paying amusement tax on a lower subscriber base in analogue regime. However, the advent of digital addressable system (DAS) has resulted in full declaration which means that their tax burden will go up considerably. 

The MSOs will have to pay Rs. 10 per STB as amusement tax for three million cable TV homes in the metropolitan city. The amusement outgo works out to Rs. 30 million a month.

Disputes between Broadcasters and MSOs

Broadcasters, particularly those belonging to large media companies having monopolies in the market are in confrontation with distribution platforms, both DTH and cable to extract the maximum revenue before even the DAS regime is fully operational. 

After GTPL and Siti Cable, Star Sports India has threatened Hinduja Group-owned MSO IndusInd Media and Communications Limited (IMCL) with de-activation of its channels for non-payment of subscription fees and non-receipt of monthly subscriber base. Star Sports India had issued three public notices informing consumers and franchises of IMCL of imminent de-activation of Star Sports channels in digital addressable system (DAS) areas of Mumbai, Thane, Navi Mumbai and Nasik. 

On the other hand Tamilnadu State Government run Arasu Cable TV has demanded reduction in pay channel pay out from Mediapro to meet the shortfall of their revenue from carriage fee. After MediaPro denied the payout, Arasu Cable has issued a public notice in the leading newspapers saying that they are unable to carry Mediapro channels due to financial crisis. The matter is yet to be resolved.

Siti Cable in Kolkata to Organise New Year Bash for the Industry

Ending the year on a positive note, SitiCable Network in Kolkata is all set to welcome the New Year hosting its yearly get-together with around 14,000 last mile operators (LMOs) along with their families and the broadcasters attending it. The get-together which is scheduled for 4 January 2014 is a platform for the MSO to discuss its ambitious expansion plans in the eastern region as well as share their achievements.

According to Suresh Sethia, SitiCable Kolkata director this get-together is very important for them as it is here that they will talk about the cable TV industry’s future in West Bengal and also announce their achievements, particularly, in the eastern region.

The MSO claims to have seeded around 1.7 million set top boxes (STBs) in the eastern region. They plan to install another 1.5 million STBs by December 2014. The MSO is also focusing on creating and acquiring content for approximately eight server based television channels to provide advanced services of video-on-demand. The MSO is also looking at tapping into the market in Patna and Guwahati.   

Let 2014 be a Happy New Year

The New Year should bring many cheers to the industry as most of the teething problems of the industry in implementing mandatory digitization are likely to be resolved. Many matters are now in the courts and we expect the courts to resolve these issues in a just and speedy manner unlike the Ministry or the regulator who have always been favourable to large corporates. 

In May we are facing General Elections of the country and the way things are going for the ruling UPA government, it may be difficult for them to remain in power. Although personally I feel it will be better for the industry that the present government continues because sudden changes in the policies may take the industry backwards by many years.

Source: http://cablequest.org/articles/digitization/item/3978-come-2014-das-still-in-limbo.html
Source: http://cablequest.org/articles/digitization/item/3978-come-2014-das-still-in-limbo.html