CAS task force meet on Friday crucial

NEW DELHI: The next meeting of the government - piloted task force on conditional access system (CAS), scheduled to be held on Friday, may be crucial, but less stormy as compared to the last one held last month.

Though the agenda of the meeting has not been listed out, but it is expected that the failure of the government to fully address rationalisation of various duties on import of set-top boxes (STBs) will one of the topics that is likely to be brought up by some task force member or other.

Especially in the light of yesterday's post-Budget meeting that CETMA, the apex body of electronics goods manufacturers in India, had with officials of the finance ministry where it was indicated that the government is highly unlikely to hand out more sops on STBs. At the moment, the import of an STB will attract various duties amounting to 51 per cent, according to CETMA, 

which is likely to push up the price of the box when it finally reaches the consumer defeating the purpose of making available cheap STBs to Indian cable homes.

After yesterday's meeting, MSOs have raised doubts over availability of STBs in India from July as local manufacturing is almost next to nil. "If the high duties have to be paid for import of STBs, then the price of a digital box can be as high as between Rs 6,000-7,000 finally when it reaches the consumer's end with an analog box costing up to Rs 4,000," a senior 

executive of an MSO told

The task force meeting later this week may also attempt to find ways to quickly arrive at the twin issues of pricing of free to air channels and maximum retail price (MRP) for pay channels.

During the last task force meeting, the representatives of MSOs-cable operators and broadcasters had said both could not finalise their individual business plans for a post-CAS scenario as the pricing have not been firmed 

up. Broadcasters had also opined that they are unable to fix an MRP for each pay channels as they did not know the pricing of the basic tier of service, something that the cable operators had dubbed as a "dilly-dallying tactic."

According to government sources, who quoted the minutes of the last task force meet, Shantonu Aditya (from Sony Entertainment TV) had informed the 

meeting that the Indian Broadcasting Foundation (IBF) had held meetings with the representatives of all the stakeholders to start a dialogue on some contentious issues. Aditya also mentioned that although no purchase orders had been placed with CETMA or globally, there was acknowledgment of the time frame to be adhered to and this was an "area of concern."

Aditya is also reported to have mentioned that major issues of security, copyright, piracy and the robustness of technology of SMS (subscriber management system) also needed to be sorted out. IBF has taken the responsibility for discussing and determining some basic standards in this regard.

According to the sources, Aditya also mentioned that all parties would wait for the budget (that has now come and gone without enthusing the industry much) and after taking into account the rationalisation of the customs and central excise duty for STBs, they would decide the quantum of boxes and the import of other equipment required. He had also expressed concern regarding the deadlines being stipulated beyond July.

The representatives of MSOs had expressed concern about the pricing of FTA channels, which only would enable the business models to develop.

The chairman of the task force, Rakesh Mohan, joint secretary (broadcasting in the I&B ministry, had enquired from IBF the preparedness of broadcasters to meet the demand of STBs in time. In reply, it was stated that while 

sufficient import would be available to cater to the demand, firm orders needed to be placed, since a period of at least 10 weeks' time was required even for the analog box.

Requirements needed to be firmed up by the end of March 2003 so that orders could be placed. It was informed that initially, demand would be substantially met through imports.

Manu Sawhney of ESPN India had stated that in the last three to four years, IBF had not held deliberations with MSOs/cable operators/consumer groups and the process of consultation was an index of the broadcasters' seriousness. 

It was also expected that commercial negotiations between broadcasters and MSOs would progress in a proactive manner, after first week of March, the 

government sources said.

Shri Ram Khanna of consumer activist group, VOICE, had suggested that since there was divergence of opinion on the pricing of FTA channels, it was 

necessary to have it resolved through an arbitrator. He had also mentioned other problems of changes in hardware, converging technologies and disputes 

over jurisdiction.

Jayaraman of Hathway had responded to this by stating that the issue of convergence can be addressed separately and the consumer will get what he 

wants-- be it Internet or any other service-- but it would be at the price of the STB/pay channel, which was important. However, the task force head had clarified that services arising from convergence of technologies were beyond the brief of the task force and would require inter-ministerial consultations.

Ashim Dutta of RPG Netcom, Kolkata, had stated that the pay channel pricing structure would be dependent on the finalisation of the free-to-air channels pricing. If orders are placed by the first week of March 2003, only then, the deadline of July, 2003 could be met.

Roop Sharma of Cable Operators' Federation of India, the sources said, had raised the question of 'bouquetisation' of pay channels and wanted to know 

whether the broadcasters would provide a single channel or insist on tagging on channels with the driver channels. The representative of Mumbai Grahak Panchayat also opined that bundling should not be allowed. Bundling was a form of cartel and amounted to monopoly and restrictive trade practices..

Datta had also suggested the government fix the bench mark dates for finalisation and declaration of number and cost of pay channels, placing orders for STBs and other issues as deemed fit by the government and that 

every one should adhere to the deadlines to avoid any further delay.

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