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 PM:
Does anyone have an election strategy that does not involve
the usual contentious issues?
YM: Sir, I have a sure-shot winning
strategy. I propose the following:
- Food products manufacturers should be
forced to reduce prices by 20 per cent, or face price ceilings.
- Clothing manufacturers should be made
to reduce prices by 30 per cent, or face ceilings again.
- All newspapers or magazines should be
given away free, or face an advertising ban.
- Vehicle makers should be forced to reduce
prices by 15 per cent, or face alternate-day usage strictures.
Cinema halls and
restaurants should be made to slash prices by 50 per cent, or face
reduced open days.
Fiction? This is the age of free enterprise and
markets, or so we think. Yet, in the course of the unseemly confusion
over the Conditional Access System (CAS) proposed by the government
to regulate cable and satellite (C&S) TV in India, the above described
scenario does not seem bizarre any more.
This is a time for reflection. The growth of
the C&S industry in India has been remarkable. From scarcely
any C&S TV in 1993, we have an estimated 40 million C&S
homes today. There are about 70 channels, showing a wide variety
of programming, delivered to the comfort of our homes-all for about
Rs 5-10 a day. Too good to be true, maybe, but true nonetheless.
And then
what happens? The broadcasters and cable operators fight. The former
claim that the latter are not owning up to how many subscribers
they have for their pay-TV fare, while the latter protest price
hikes for the same. Viewers complain that they have to pay for channels
they do not watch. The next thing you know, the government swoops
in.
The amendment to the Cable Television Networks
(Regulation) Act, 1995, was proposed by the Government of India
with the objective of giving the consumer choice through the installation
of a piece of hardware called the set top box (STB). The law authorised
the government to set a price the consumers to pay the cable operator
(to cover cable costs) in exchange for free-to-air channels, as
part of the basic tier. The government said it would leave the pricing
of hardware and pay channels to market forces.
Then, on March 30, 2003, the Ministry of Information
and Broadcasting published a public interest notice in newspapers,
admitting that: "The central government has no authority to
fix the price of the pay channels, which will, however, be required
to be notified (separately for each channel) and publicised for
the information of the subscribers, by the cable operator concerned.
The cable operator shall also publicise the periodical intervals
at which subscription charges (for free-to-air as well as pay channels,
if any) are payable by the subscriber to the cable operator."
Believe it or not, there are suggestions that
broadcasters should be told to fall in line on the government recommended
pay-channel prices, or face a cut-off in access to advertising revenue.
The Miscalculations
- The target date for CAS implementation was
unrealistic. It was known that STBs would have to be imported,
but import duties were lowered only recently.
- The assumption that a host of pay channels
would go free-to-air ignored the economics of broadcasting.
- There was no guarantee of the STBs being
standard.
- Most homes that watched a wide variety of
channels would end up paying more under CAS.
The Pain
Today, with CAS upon us in the metros, everyone
seems clueless, even cable operators. I certainly haven't heard
from my cable operator, or from any STB installer. How many have
been installed? Nobody knows. Yet, the government wants broadcasters
to announce formulate business plans and announce prices.
So where do we go from here? The government
needs to delay the implementation of CAS by a reasonable period.
This can be used to test the STBs, develop after-sales service support
and allow consumer confidence to develop. What on earth is the hurry?
Ajay Bhai is Managing
Partner, Ajay Bahl & Co., a Delhi-based law firm.
He can be reached at Ajay@ajaybahlco.com
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