TRACING THE PARLIAMENTARY DISCOURSE AROUND DIGITIZATION OF CABLE DISTRIBUTION (A DRAFT PAPER)

 

By Susan Koshy, Research Associate – TAD

Paper presented at panel Policy Analysis of Television Distribution IAMCR, Hyderabad, 16-19 July, 2014

 

In November 2012, the Ministry of Information and Broadcasting of India issued an ordinance to digitize the Television Cable Distribution networks across the country. A plan was drawn up to implement the change in four phases. This was aimed make the television distribution in the country addressable, it also implied an overhaul of an extant system which had lasted for around twenty years. This paper traces the Parliamentary discourse (Debates and Questions) around this policy shift across a period of 10 years.

 

Policy History

If one looks at the shift to digitization in hindsight, one can say that the television distribution segment has come a long way from the early nineties when it grew primarily as a cottage industry catering to the urban public. The broadcast of the Gulf War in 1991 presented a glimpse of what was to come soon in the future. The emergence of the satellite channels fit into the structure of cable television perfectly to form a heady mix of entertainment for public consumption.

The first official step in giving the sector a formal identity was when the ‘Installation and Operation of Cable T.V Network’ was recognised as a Small Scale Service and Business Industry by the Ministry of Industry in 1994[1]. The efforts to regulate the sector followed shortly after, with the Cable Television Network Regulation Act which was passed in 1995 giving the sector a formal identity. However, the glamour that was associated with the content that was broadcast over the satellite channels relegated the distribution sector to the background while it continued its function of ensuring that the content reaches the Television viewing households. The sector was brought to the policymaker’s consciousness only in response to issues which were connected to regulation of distribution in a tangential manner, two of which are discussed below:

  • One, arbitrary hikes in subscription prices
  • Two when the cable operators were often targeted for the content being broadcast in violation of the Program and Advertising Code. While at times this included broadcast of channels which had been branded illegal due to the violation, it also included content produced by the cable operators which violated the code.

There were subsequent amendments made to the 1995 Act to include provisions to make the networks regulated in terms of the players who operate within it and the content being broadcast over the network.

The beginning of addressable technology in television distribution goes back to 1997 when Star TV announced its plans to distribute television channels directly to the subscriber’s homes in high frequency Ku-band. This would help bypass the cable operator, thus bringing in competition in a market where the cable network had a monopoly. However, the move was opposed by the government on grounds of security and morality which was shortly followed with a ban of DTH technology thus prohibiting transmission or reception of signals, establishment, maintenance, working, possession of, or dealing in equipment capable of receiving signals in frequency bands above 4800 MHz (incl. Ku band).[2] There was a move to reconsider the ban shortly after when two Groups of Ministers were constituted in 1999 and 2000 whose recommendations were accepted by the Parliament and the ban on DTH was withdrawn.

This was also at a time when the cable operations which catered to the television viewing needs of over 20 million[3] Cable TV households in the country had mushroomed with a significant amount of muscle power and the sector had become notorious for its links with the goons and the underworld. The frequent increase of subscription prices by the broadcasters and the Multi System Operators had led to arbitrary increases of cable prices which had led to them being viewed as a menace. In such a scenario, DTH, as mentioned earlier which would help bypass the cable operator would have presented a welcome option with its better quality of transmission and the option of value added services. However, the licenses which got entangled in the government processes and the delay in setting up the infrastructure by the licensees the launch of DTH in the country. It did not help that DTH was more expensive in comparison to the cable and was always visualized as a technology which would cater to a niche audience.

Once it was realized that the satellite channels enjoy a certain amount of popularity free to air channels converted to pay channels to tap into subscription revenue. This burden was passed onto the subscribers who had to pay higher subscription charges. It was in response to this that the Act was amended to include the idea of addressability in the cable television networks in 2002. This was aimed to counter three problems associated with the networks out of which two have been explained above. The third issue was related to under-reporting of subscribers by cable operators. This was a rampant practice due to which the MSOs and broadcasters would not receive the correct subscription revenue and the government would not receive its accurate share of entertainment and service tax. As was acknowledged in a report by the Parliamentary Committee:

The cable operators were under – declaring cable subscribers substantially and there was a wide gap in the figures furnished by them. They declared 6 lakh subscribers to Star TV, 4.47 lakh to Maharastra Government for entertainment tax and only 2 lakh for service tax to Ministry of Finance. [4]

The Act was amended in 2002 to allow consumers to pay for what they want to watch and pay only for those channels that they watch rather than paying a bulk amount for all the channels. This would be done through the installation of set top boxes in the households which would want to watch pay channels. Secondly, the amendment also mandated a mix of a minimum number of free to air channels to be provided to the subscriber at a minimum price which would be regulated by the government. However, those who only wanted to FTA channels would not need to acquire a STB.

The system was called Conditional Access System (CAS) and was to be initially implemented in the four metros after which it would be expanded to the entire country. There were significant hiccups in its implementation due to which it got delayed and it was stuck due to a High Court Order especially in Chennai. However, this also fuelled another change in the sector whereby TRAI’s mandate was expanded following a Delhi High Court Order to include broadcasting and cable. It mandate also included to ensure the smooth implementation of bringing in addressability to the sector. Ever since, TRAI has been actively regulating the subscription prices of pay channels, basic service tier, Set top box, Quality of Service Regulations among various other things.

The second phase of addressability saw the UPA II government in a more determined mode which was announced by Ambika Soni whereby an Ordinance was initially passed to amend the Act through the shift was brought about. This was then introduced in the Parliament and passed by the two Houses of the Parliament in 2011. The Amendment mandated that the shift would be brought about in four phases:

(i).The plan is for complete digitalization of cable television in the four metros by October 31, 2012.

(ii).The next target will be cities with over 10 lakh population by March 2013. (iii).By the end of 2014, the entire country is scheduled to have phased out analogue cable TV.[5]

The shift which was planned in four phases is currently underway and is being closely monitored by the government.

The ongoing shift brings to light the lack of planning on the part of the government. The paper tries to understand how the debates around the issues which were discussed in the Parliamentary circles. The study has looked into the Parliamentary Debates and Questions between the period 2000- 2013 to understand how the discourse has shifted over the year. The data has been mined the two websites of the government, www.loksabha.in and www.rajyasabha.in.

Parliamentary Debates around Digitization

As explained above, the amendment to any Act will have to be passed by a majority the two houses of the Parliament after which it is sent for Presidential assent. The bill is passed only it is debated by the Parliamentarians.

The amendments to the Cable Television Networks Regulation Act in the context of introducing addressability have been actively debated in both the Houses of the Parliament. The next section will give an outline of the debates which occurred around the time of CAS and around second phase of digitization in 2011.

Amendment in the Cable TV Networks Regulation Act to introduce Conditional Access System (CAS)

The amendment to the Act was largely supported by everyone who spoke about it but with a number of concerns and queries which were raised in the context of various provisions in the Bill. The bill was presented by the then Minister of Information and Broadcasting (MIB), Sushma Swaraj in the Lok Sabha on 15th May, 2002 . The approach to bringing in regulation in the sector was clearly based on the mandate that the government would prefer to avoid interfering in the sector and leave it open to market forces. It was often repeated that the government would prefer the approach of minimal interference. While there were a few MPs who mentioned in their speeches about the delay in the introducing the amendment, there were some common queries which were raised in the debates by all the members, some of which are discussed below.

The high price of the Set top boxes was definitely one of issues which was raised by everyone who rose to speak. Since the Set top box is essential to introducing CAS, its high prices to the tune of 2-3k was a significant cause of concern as the move to introduce CAS for the benefit of the consumers would be undermined with such high priced boxes. The Minister’s response to this was that the price of the Set top box would be brought down with the volume of the Set top boxes that would be ordered.

Another concern that was voiced was related to how the amendment would be relevant with the introduction of the Communication Convergence Bill. [6]

The pricing of channels was definitely an area of concern which as voiced by MP Pawan Kumar Bansal pointed out that while it is commendable to fix the price of the basic service tier, it is also important to fix the price of pay channels to which the response by the Minister was that it is preferable to leave the prices of pay channels open to market forces. Also it was said that the broadcaster would be required to make the prices of their channels public so that it makes the system of billing transparent for the consumer.

There was also a view that the bringing in of CAS would allow for censorship whereby channels which have a certain kind of objectionable content can be priced high that it would be difficult for the common man to afford it.

Amendment in the Cable TV Networks Regulation Act to introduce Digital Addressable System (DAS)

The Bill to amend the CaTV Networks Regulation Act was passed in the Lok Sabha on 13th December, 2011 by the Minster of Information and Broadcasting Minister, Ambika Soni. The significant amendments which the Bill sought to introduce in the Act were:

  • to make it possible for the government to mandate that the transmission of all channels through digital addressable systems among other changes to regulate the cable network sector for which the cable operator would be given a time period of six months to install digital systems. This was based on the recommendation by TRAI that addressability should be expanded to all of country.
  • To allow for renewal of licenses and new licenses to be given to only those cable operators who undertake to provide digital signals.
  • To allow right of way to cable operators to lay cables
  • Seizure of equipment on violation of rules as perceived by the authorized officer

Among the proposed amendments, the clause related to digital addressable systems is quite significant as it allowed the government to continue the plan for mandatory digitization which had already been initiated through an Ordinance which had been passed since the Parliament was not in session at the time.

An analysis of the debates in the Lok Sabha about this amendment shows that barring two speakers who opposed the Bill, it was supported by all the speakers though with a number suggestions and clarifications.

The fact that Ministry decided to go ahead with the implementation of digitization without amending the Act through an Ordinance was perceived as unnecessary as voiced by some MPs. The fact that the move was to ensure that the 2014 deadline is met does not explain it enough particularly since many issues which existed during the CAS regime continued to be unresolved. Amongst this the most pertinent was that the cost of the Set top Box continued to be prohibitive to the public who cannot pay. Though the option of making the boxes available to the public with the options of rent, purchase or paying installments was an option for the public, the implementation on the ground is yet to be explored in detail.

A cable operator as described by Tathagatha Satpathy:

from production houses, broadcast houses down to the distribution set up, whether it is hawkers for a newspaper or it is a cable operation, which is equivalent to a hawker of a newspaper – the cable operator in a village operates, lives and invests his or her money and survives. They are the people who live and stand on their own feet[7]

There is an evident fear that the highly capital intensive shift to digital mode of distribution would put a lot of small cable operators out of business due to consolidation. The argument that Headend in The Sky(HITS)[8] policy was passed with the intention to support the cable operators such that CO could directly receive digital signals so that they would not have to install expensive digital equipment [9]does not hold valid in hindsight since the Jain HITS (which was the only company to launch the HITS technology) never took off beyond the initial hype. This also points to the lack of a comprehensive study the viable options in the market which would cater to the needs of the cable operators. This is further discussed in the study of the Parliament Questions which significantly highlights the lack of any study of the TV viewer who is touted to benefit from this shift.

However, the shift to digitization with the purpose to allow TV viewers to pay for only those channels that they wish to watch was a move that was highly lauded especially since consumers are often forced to pay for the channels they do not watch. There were also concerns voiced where cable operators do not make the channels of the language of region.[10]

While the move to make a mix of different genres of Free to Air channels available at a basic price was definitely lauded, the government’s role in deciding the composition of the Basic Service Tier was said to take away the consumer’s choice.

With regard to issues related to pricing of cable services, an interesting incident is narrated by Dr. Sanjeev Ganesh Naik to highlight the need for regulating prices of cable subscription.

One cable operator was contesting the Corporation elections for the post of the Corporator. He declared to the people that for the next three months the cable subscription charge would be reduced from 100 Rs to 50 Rs which made people happy. But when he lost the election, he increased the subscription price from 100 Rs to 200 Rs. There was no control over whether the charge would be 100 or 50 Rs.[11] (translated from Hindi)

However, there were apprehensions that leaving the prices open to market forces would leave the low income households unable to afford Cable television.

Parliament Questions

The Parliament questions between the years 2000-2013 had 445 questions which were asked in the Parliament out of which

There were numerous queries about the details of the sector like the number of cable television homes, number of cable operators, the revenue generated from the sector as well as the data related to evasion of taxes. There were numerous queries about the number of cable operators, number of cable television homes that have been asked almost across all the years. There have two two attempts to answer this questions in 2002 when the data is quoted from the NSS survey and in 2013, a FICCI report is quoted. It is also important to note the shift in the nature of the source from a government source to an industry based organisation’s. However it is continually maintained by the Ministry that the government does not keep a central database. The claims about the loss of revenue by the government, the entertainment and sales tax is also consequently not known due to the lack of this data. The lack of this data is one of the major planks on which the drive to digitisation is pushed. However, it is important to note that the cable operators are required by the Act to register with the Head Post Office which is also stated by the Ministry in all its responses to related queries. Therefore on being repeatedly questioned about this data, it would be expected that the government would collate the data to put together a central database of the cable sector. This would have also helped the government deal with many of the problems much earlier with other measures.

However, even in 2013, when there is a question about the revenues generated the government again states the lack of centrally maintained database. This causes one to raise further questions about the usefulness of the digitisation drive post which it was assured that data related to the sector would be known which would have helped government plug the leak of revenue but the lack of knowledge about revenue highlights the lack of a comprehensive plan dealing with the different aspects of the drive. This is again reflected in the case of Doordarhsan’s DTH where while the government decided to take the plunge into the distribution sector, there is no information about the audience or about its popularity.[12] Though in 2008, there is an approximate data provided, there is no source to this data to judge whether this is authentic.

This data would have also been significant to deal with the numerous queries pertaining to the complaints about the price hikes of the cable and DTH subscription which are raised in the Parliament. It is important to note that the nature of questions raised were primarily related to retail tariff and not as much about wholesale tariff. The response to the queries of this nature shifted from the government claiming a hands-off approach since it was a matter between private parties[13] to the twin proposal of introducing the choice to the consumer to pay what he/she wants and a cap on subscription prices. The first effort to regulate the prices was in the form of the First Tariff Order passed by TRAI which was passed in 2004. It fixed a ceiling on the charges payable by the cable subscribers to cable operators; by cable operators to Multi-system operators (MSOs) /Broadcasters; and by MSOs to Broadcasters (including their authorized distribution agencies) as on 26th December, 2003 with respect to both free-to-air and pay channels (both for CAS and non-CAS areas. It is important to note that the issues related to the MSO and the broadcasters were not commonly asked about in the Parliament as much as the queries related to the retail tariffs. In the context of CAS, the concern related to price of the Set Top Boxes which was predominant in the debates was also raised in the queries though not as prominently as was seen in the questions. The government primarily pushed the two phases to introduce addressability through CAS and DAS as the means to resolve the issue of subscription prices as was seen in the debates.

The kind of players, including the State owned companies and organisations in distribution was also questioned about both, in the context of cable and DTH. in the initial years, once the ban on DTH was lifted, it was proposed that the State owned enterprise, Videsh Sanchar Nigam Limited would be allowed to enter into DTH platform.[14] However, the discourse changed by 2008 when M/s Arasu Cable Corporation Pvt.Ltd., a company owned by the government was granted a license to enter into cable distribution in Chennai. The context of how it entered the field is beyond the scope of this paper but this does point to a new scenario where the government was getting into distributing media infrastructures directly which was previously unheard of. TRAI did not support this move but Arasu’s license continues to function as a cable company though proposals from other state governments have not been accepted.[15] It is in this kind of situation that the Doordarshan decided to enter distribution through DTH further adding confusion to the market. Distribution has never been the part of the core mandates of Prasar Bharathi and the logic of why the Doordarshan entered DTH is yet to be understood. Though the stated objective is provide television to uncovered areas[16], there is no comprehensive plan of gong about this. this is evident from the questions and answers raised once DD Direct, the DTH project was launched. They largely revolved around the number of Doordarshan and private channels which was increased from 33 to 50 and further plans to increase it to 97 over the years. The STBs were to be purchased from the market and lack of subscription fees meant that there is no data about the number of subscribers, which is again the same trap that cable distribution had got entangled in.

Though there is a constant harp about the concern for the consumer who is harassed by the cable operators (which was also one of the reasons that Digitization was introduced), the responses of the government do not show an effort to use the existing mechanism to bring about a change to the status quo. The Act provides for authorised officers at the district level to look into issues like non-telecast of Doordarshan channels and violation of Program and Advertising Code. When there were frequent complaints from the consumers about harassment by the cable operators, it is curious about why these authorised officers were not asked to look into the issue. This highlights the lack of an effective enforcement mechanism of the existing provisions which could have been used to solve many of the problems.

The question of providing choice to the consumer can also be raised when the digitisation is made mandatory for the consumers who are left with no option but to migrate to digital systems. It is important to note that TRAI in it’s recommendations has stated the following:

i) Introduction of digital service in all cities/urban agglomerations with a population of one million plus by 2010. In all these cities the existing analogue service will continue simultaneously;

ii) Licensing for new entrants and automatic licensing for existing operators.

iii) Rationalization of import and domestic duties by April 1, 2006

iv)Use of Entertainment tax for a consumer education programme during these four years (2006-10)[17]

The manner in which the drive was finally implemented did not follow any of the above mentioned aspect and there was an overbearing significance given to installation of Set Top Boxes as seen in the responses by the government. However, the aspect about educating the consumers was completely sidelined. The efforts to educate the consumers was initiated only towards the end and there was definitely very little that the consumers knew about the nationwide shift apart from the fact that they had to get STB to watch television.

 Conclusion

An analysis of the Digitization Drive by the Government shows a significant lack of preparation on the part of the government to implement a drive of this scale. The data presented above shows how the debates and the questions across the two phases of introducing landmark changes in the sector, CAS in 2002 and DAS in 2011 have remained the same despite a gap of nine years. This highlights a slack on the part of the government to deliver on the promises which were made in 2002 which led to similar debates and questions in 2011.

The Parliamentary Committee which is responsible to advise the Parliament on issues which require technical expertise has merely advisory role to the former. Therefore, even though the Committee’s reports show a deeper understanding of the issues raised, they seldom find space in the discussions which ensue in the Parliament.

The smooth manner in which the two amendments were passed in the Parliament were in direct contrast to the implementation both the cases. The implementation of CAS was mired in delays while the implementation of DAS is on its way to completion, despite protests having being raised from different quarters. This can be seen in the numerous litigations which have been witnessed in the sectors and the numerous papers which have been released by TRAI.

Notes & References

[1] http://www.cablequest.org/pdfs/catv/SSI%20&%20BE%20Delhi%20Govt.doc, accessed on 10 May, 2014

[2] Direct to Home (DTH) Telecast, Fortieth Report Standing Committee on Information Technology(2002), Thirteenth Lok Sabha, Ministry of Information and Broadcasting presented on 28 November 2002

[3] Naregal, V. 2000; Cable communications in Mumbai: Integrating corporate interests with local and media networks; Contemporary South Asia, 9:3, 289-314

[4] Conditional Access System Fifty Second Report Standing Committee on Information Technology(2003), Thirteenth Lok Sabha, Ministry of Information and Broadcasting

[5] http://digitalindiamib.com/faq_4.html accessed on 6th July, 2014

[6] The Communication Convergence Bill was introduced in the Parliament in 2001 which was aimed at regulating a converged media environment and more importantly, would repeal the Cable Television Networks Regulation Act, 1995. However the Bill is yet to be passed.

[7] Lok Sabha Speech by Tathagatha Satpathy in Discussion on the motion for consideration of the Cable Television Networks (Regulation) Amendment Bill, 2011 (Bill Passed) on 13 December 2011

[8] The Head End in the Sky (HITS) is a technology by which a cable operator can receive directly receive digital signals.

[9] Lok Sabha Speech by Ambika Soni in Discussion on the motion for consideration of the Cable Television Networks (Regulation) Amendment Bill, 2011 (Bill Passed) on 13 December 2011

[10]Lok Sabha Speech by Ramshankar Rajbhar in Discussion on the motion for consideration of the Cable Television Networks (Regulation) Amendment Bill, 2011 (Bill Passed) on 13 December 2011

[11] Lok Sabha Speech by Dr. Sanjeev Ganesh Naik in Discussion on the motion for consideration of the Cable Television Networks (Regulation) Amendment Bill, 2011 (Bill Passed) on 13 December 2011

[12] Lok Sabha, Unstarred Question no. 5334 answered on 15 May, 2007

[13] Lok Sabha Unstarred Question No. 7205 answered on 5 December, 2000

[14] Lok Sabha Unstarred Question No. 5336 answered on 23 April 2001

[15] Lok Sabha, Unstarred Question No. 2691 answered on 17 December 2008

[16] Lok Sabha Unstarred Question No. 1627 answered on 7 August 2006

[17] Lok Sabha Unstarred Question No. 4338 answered on 22 December 2005

This entry was published on July 24, 2014 at 5:52 pm. It’s filed under Media Justice, Media Markets, Media Policy and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow any comments here with the RSS feed for this post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: