India Today - - FRONT PAGE - By Dhi­raj Nay­yar

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

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