CAS bill trawling uncharted waters, says survey

NEW DELHI: The issue of conditional access system (CAS) is generating renewed heat on the eve of its expected passage in the Indian Parliament's Upper House (Rajya Sabha) and a recent survey carried out at Broadcast Asia in Singapore points out that India is attempting to introduce CAS in a manner which has not been tested anywhere or, if done so, has failed to have the desired effect.

No other country in Asia has successfully mandated CAS as the technology for addressability has largely been left to market forces to determine, the survey carried out by an Indian legal firm says.

The government set up a task force on CAS comprising prominent members of the broadcasting community to go into the issue and it made its recommendations late last year. A perusal of the provisions of the bill that is to be tabled in the Rajya Sabha however, indicate a great variance between the recommendations of the task force and what the government proposes.

The Cable TV (Networks) Regulation Amendment Bill 2002 gives the government far reaching powers much beyond anything contemplated by the task force. If the bill is cleared, India will join South Korea and Singapore as the only Asian countries where the use of set top boxes (STBs) or similar technology and tiering for cable systems are mandated by a Central law. Hong Kong, China, Indonesia, Malaysia, the Philippines and Taiwan in Asia as well as the US and UK are all countries that have allowed market forces to make these determinations.

For example, the study points out, in China pricing of channels is fixed but that is done at the local level of governance and not through a Central legislation as is being attempted in India. "In fact it appears that no country in the world has enacted a legislation that is directly analogous to the Bill. The concept of CAS proposed in the (Indian) Bill is, therefore untested. The provisions of the bill should be carefully considered to ensure that there is minimal disruption to the cable and satellite TV industry, which employs close to 30,000 people, generating revenue close to Rs 40 billion, the study says. "Any disruption in its functioning would have major socio-economic consequences," the study, being circulated amongst Rajya Sabha members, says.

In addition the bill differs from the recommendations of the government-sponsored task Force on CAS on controlling the size and composition of the basic tier of service. Although current "must carry" regulations mandate carriage of certain public service broadcaster (Doordarshan) channels, government determination of the inclusion and exclusion of any other channels in the basic tier amounts to a form of censorship that was not recommended by the Task Force, the study points out.

Also, the Bill does not adequately address the Task Force recommendations that cable operators be more accountable and transparent, providing more efficient and responsive service through methods, including accurate billing and collection system.

The study also points out that, for example, though the Task Force made no recommendation on the issue of price differentiation in different areas, the Bill proposes to do that. "Such a differentiation will create a large administrative burden for the local and national governments as each area will need to be monitored and price fixed. Again, the Bill does not outline its plan for determining the pricing in different markets," the study explains. 

Dwelling on the fact that adoption of CAS is market driven in almost every jurisdiction in Asia, the study says. For example, STBs are mandated in Singapore for new TVs, but old ones continue to receive cable without STBs.

Price controls exist in China and Taiwan at the local level, not through a national level legislation.


Indonesia: Use of CAS is market driven. There are no regulations and CAS may be used by the two existing Multi-System Operators (MSO) among several delivery solutions.

Malaysia: Use of CAS is market driven. There are no regulations. Apart from licensing channels, the government has retained minimal control. The cable market is small and the only cable operator recently went bankrupt as consumers prefer DTH.

Korea: CAS is one of several options available in the market and its adoption has been entirely market driven. The cable market is large and heavily regulated. There are different tiers with the basic tier available at a low cost. Two-way addressability was recently introduced and now you need a STB to receive the different tiers. This has caused consolidation of the market as small operators are unable to compete with larger MSOs. The smaller operators have simply been put out of business and have had to shut down. This could happen in India.

Taiwan: There are no regulations to mandate adoption of CAS or STBs as the process is essentially market driven. Taiwan has licensing and content restrictions, but apart from this, the government is not trying to change or regulate the structure or mandate technology, although the issues are similar to India in that there are many relay operators and content sensitivity. There are four MSOs with several smaller players operating in the country. There is price control and a content code.

Phillipines: There is one basic cable service. STBs have become necessary and this has forced consolidation of the market. Although there were many MSOs earlier, the number has now reduced.

Thailand: There is minimal regulation. CAS is not regulated. The cable market is very small, and the cable operator is owned by the company that has the DTH rights for the whole country. Effectively a monopoly with one MSO.

Hong Kong: STBs are needed. Tiering is present and is wholly market driven. There is a single cable operator who has a license to operate, apart from this there are no other regulations.

Japan: Primarily DTH and digital cable. Broadband services are available - no regulation, all market driven.

Singapore: Primarily cable. New TV owners are opting for DTH although old TV owners prefer cable which is available without a STB. The process is entirely market driven so there are no regulations mandating CAS. Singapore does control the composition of the basic tier. 

Argentina, on the other side of the world, tried like India to fix prices. The price control resulted in a sharp decline in the quality of programming and this caused consumers to switch over en masse to DTH. The cable market has collapsed subsequently. The ceiling on price killed the industry as people wanted better quality programming and value added services which the cable industry because of price restrictions was not able to provide.


The CAS scheme differs from the recommendations of the Task Force in the following ways:

1. Must-carry provisions for Doordarshan channels were recommended by the Task Force. "This may be achieved without the Government assuming the power to specify any channel other than the public broadcaster as this would amount to directing the choice of the viewers and their right to free access to information would be infringed," points out a Delhi-based media analyst.

2. The Task Force had suggested that package of services should be left to the market. There is no rationale behind the Government assuming control of the package of services. Nor did the Task force recommend control of the number of channels. "The Government has explained that it mean to specify only the minimum number of channels, but this is not clear from the language of the section," the analyst said. 

3. The Task force was silent on the issue of price differentiation in different areas. It did not say that the receiver set technology should be limited to the current technology that exists in India without scope for technological upgradation.

4. The Task Force had suggested that the consumer should be educated on the cost of content creation and distribution. This recommendation has not been addressed anywhere in the Bill.

5. The technology for implementing the CAS has been left to the Bureau of Indian Standards. The Broadcasters need to be consulted to see if their recommendations will work for the industry. Without this there will be a gradual shrinking of the market.

See earlier report: CAS will give govt unparalleled powers, says survey 

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