DTH

Smuggled STBs & Indian DTH may be used, IBF advises Nepal to defer Clean Feed

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MUMBAI: Nepal had recently issued a clean feed policy. However, owing to unviable business proposition, it is felt that distribution channels may face discontinuation leading to rampant piracy all over Nepal. It was highlighted that in-cable operators may resort to using Indian DTH connections to re-distribute the signals. Viewers too may start buying Set-Top Boxes (STBs) and Viewing Cards of Indian DTH operators without knowing that the same may have been smuggled into Nepal. IBF has appealed that “the Government of Nepal ought to defer implementation of a “Clean Feed” policy until implementation of digitization so as to evaluate best ways to take advantage of the same as is being done by other countries.

In the recent past, Government of Nepal issued clean feed policy pursuant to which downlinking licenses of foreign broadcasters is sought to be permitted only if foreign channels being distributed in Nepal do not contain any advertisements (“Clean Feed Policy”). The Clean Feed Policy is sought to be implemented by Government of Nepal from 16 July, 2017.

To apprise the Government of Nepal on the possible fallouts of the proposed policy and its likely impact on the economic development of Nepal - particularly from the point of view of loss in revenue and employment in the Country, Indian Broadcasting Foundation (IBF) has had a series of discussions with Nepal Government officials. During the discussions, broadcast fraternity of India conveyed the technical and economic unviability of the proposed Clean Feed Policy in Nepal. Broadcasters also conveyed that consumers and various distribution platforms in Nepal would be adversely effected in case the proposed policy is implemented on the designated date.

(a) It was highlighted to the Government of Nepal that any such policy ought to be framed only after holding transparent and holistic consultations involving all stakeholders in an environment where digitalization of distribution networks in Nepal has been completed and issues relating to implementation of anti-piracy laws have been put in place, as is not the case presently.

(b) Launch of clean feed would inter-alia entail separate playout, uplink and downlink costs. Nepal being an emerging market with very low ‘Average Revenue Per User’ (“ARPU”), such exorbitant costs to create clean feeds are not justifiable from a business viability point of view.

(c) Due to unviable business proposition, it is felt that distribution channels may face discontinuation leading into rampant piracy all over Nepal. It was highlighted that in cable operators may resort to using Indian DTH connections to re-distribute the signals. Further, in such a situation, viewers too may start buying Set-Top Boxes (STBs) and Viewing Cards of Indian DTH operators without knowing that the same may have been smuggled into Nepal.

(d) The demand for ‘clean feed’ is at variance with and may be counter-productive to Government of Nepal’s laudable initiative for implementation of digitalization of distribution networks. This is so because digitization is a cost intensive exercise and any discontinuation of channels on account of implementation of Clean Feed Policy ought to have an adverse impact on revenues of cable operators (thereby affecting their ability to invest monies for digitization). It was submitted that such impact can have a cascading effect on survival of distribution platforms thereby, as a chain reaction affecting employment locally and also distribution / reach of local Nepalese channels.

(e) Government of Nepal should first allow implementation of digitization before proceeding to evaluate need for introduction of a Clean Feed Policy. It was highlighted that digitization with addressability is a potent tool to keep in check on unaccounted cash transactions, which may not only cause losses to distribution platforms and broadcasters but, also to the Government exchequer in the form of lost taxes.

(f) Proper and effective implementation of digitization will give an insight to broadcasters on type of content being consumed, and as a consequence, they will be able to evaluate consumer choice better. From Government’s point of view, digitization will also afford a line of sight on content being distributed in Nepal, revenues being generated by distribution platforms and consequential license fees / taxes that they are paying. Such license fees / taxes can be utilized by the Government inter-alia towards cross-subsidizing expenses of Nepalese broadcasters or other initiatives.

Girish Srivastava, Secretary General of IBF, appealed that “the Government of Nepal ought to defer implementation of a “Clean Feed” policy until implementation of digitization so as to evaluate best ways to take advantage of the same as is being done by other countries. Meanwhile, with the renewal of channel licenses due on 15 July 2017 – we would request the Ministry of Information and Communication (MOIC) to allow existing/new channels to be distributed without the Clean feed condition – with the understanding that the license shall not be withdrawn for at least till the next term is due”. Adding further to his request, Srivastava stated that “entire Indian broadcasting fraternity attaches a great degree of significance to the existing deep cultural, linguistic, social, economic ties between the two nations and its commitment to further the same in times to come”.

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