NEW CABLE ORDER A DIGITAL DUD
The UPA Government and its functionaries have made a habit of undoing sensible reform measures. On April 30, the Telecom Regulatory Authority of India ( TRAI) issued an order specifying the modalities to enable the implementation of the Cable Television Networks ( Regulation) Amendment Act of December 2011. A controversial clause in the order puts the broadcasting business, particularly television news, in a difficult spot. It threatens to derail a good Act.
The main purpose of the 2011 Act is to make it mandatory for cable television networks to transfer from outdated analogue technologies to new digital technologies within a set timeframe— as early as July 2012 for the four metros and no later than 2014 for the entire country. The change in technology would rid cable networks of serious capacity constraints which limits the number of channels they can broadcast.
In an analogue signal system, a single channel requires 7- 8 Mhz of bandwidth to be broadcast. In a digital system, which compresses and encrypts signals, 10- 15 channels can be broadcast using the same bandwidth. A digital system would bring consumers much greater choice in the channels they can view. Digitisation will also bring better quality of picture, including high definition, besides top quality sound to consumers.
The 10- 15 fold increase in capacity was also expected to help business. Digitisation was supposed to rid broadcasters of one of the most extortionist features of the old system— carriage fee. Broadcasters had to pay multisystem operators ( MSOS), for example Hathaway and Digicable, which own major cable networks across the country and extend their services as franchises to neighbourhood cable operators to transmit their signals to homes. Since MSOS had limited capacity to transmit signals, carriage fee was somewhat like a competitive bidding process to ensure that a broadcaster’s channel reached viewers.
The clause of the TRAI order, instead of doing away with carriage fee, which imposes a huge financial burden on broadcasters, particularly news channels which are free to air, allows continuation of the fee. “The Authority has decided that every MSO may fix a Carriage Fee,” it says in the clause. The clause says that TRAI wants broadcasters to share the burden of the “substantial investment for implementation of Digital Addressable Cable TV Systems… made by the MSO, and the cost of carriage of the channels.”
The News Broadcasters Association ( NBA) is outraged by the order. “This ( carriage fee) unfairly penalises broadcasters and threatens the very survival of the broadcasting industry,” says the association in a press release on May 1. Sunil Lulla, CEO of Times Broadcasting Co, estimates that carriage fee amounts to Rs 2,500Rs 3,000 crore every year, and says “half of this amount is paid by news broadcasters”. Says KVL Narayan Rao, executive vice- chairman of NDTV and president of NBA, “Carriage fee can be up to 30 per cent of the total costs incurred by a news broadcaster. So it’s a very significant burden. That amount could easily be invested to improve content.” Like other broadcasters, Rao was expecting carriage fee to be abolished. Instead, according to critics, the Act favours cable operators.
MSOS disagree. Ashok Mansukhani, president of the MSO Alliance, says, “How can the entire cost of upgradation of technology to digital be borne by operators alone? For 100 million households, the cost is Rs 35,000 crore.” He argues that since broadcasters will eventually benefit from digitisation, they must share the burden. “The broadcasters, particularly NBA which is protesting loudest, will gain the most by getting more viewers and a solid subscription base which can both be used to generate more advertising revenues. Therefore, they have to share the burden of the cost with us,” he says. The only alternative is getting the consumer