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"To bring some certainty in the rates prevailing for these
(cable) services, it was considered necessary by the Telecom Regulatory
Authority of India to intervene in the matter. The TRAI has, therefore,
deemed it appropriate to
specify as ceiling the rates at which the charges will be paid by
the cable subscribers to cable operators, by the cable operators
to multi service operators and by multi service operators to broadcasters,
as those prevailing on 26 December 2003 with respect to both free-to-air
channels and pay channels, and for both CAS and non-CAS areas,"
a TRAI notification states.
It further adds that this intervention will continue until a final
determination by the regulator on the various issues involved.
The confusion stems from the fact that as freezing of rates of
cable services is open to interpretation. It raises the question
whether a demand in increase in connectivity (as done by Star India)
would also be frozen as of 26 December. Certain channels have claimed
that they have not increased their rates, but have slashed them.
However, the reduced price is available only those cable ops and
MSOs who increased their declared subscription base, which, in effect,
is tantamount to a rate hike as the outflow of the cable industry
to broadcasters would increase under this formula.
This was evident in how Star India COO Sameer Nair saw the development.
"We have to study the TRAI order, but on the face of it, I
don't think the order would effect us. Rather, we have reduced the
prices of Star channels (from Rs 30 to Rs 27)," he told indiantelevision.com.
Zee Telefilms vice-chairman and head of Siti Cable, Jawahar Goel,
offers a counter view. According to him, if TRAI is speaking about
freezing of rates, then it makes no sense as an MSO's outflow would
increase because of the demand of increased declaration in subscriber
base. If TRAI is talking about a freeze in the charges, which would
include an upped subscriber base, then it would indicate that the
"regulator has managed to rein in the pay broadcasters."
He added: " Still, clarifications would be needed on what actually
TRAI is trying to say."
One industry player however, saw no confusion in the TRAI ruling.
HTMT group director and CTO KV Seshasayee under whose charge InCableNet
also falls, expressed "relief that the regulator has acted
very quickly."
Queried as to what was the satus of deals that had been reached
with the different broadcasters for 2004, Seshasayee said they stodd
invalidated. Payment terms would have to be based on agreements
that were in existence as on 26 December 2003, Seshasayee said.
SET India CEO Kunal Dasgupta had this to say: "I still need
to study the implications of the order. But I do hope that the freezing
of rates is not an indefinite one. However, I am sure there is a
logic to what the TRAI is doing. We'll just have to wait and watch."
And what does TRAI chairman Pradip Baijal has to say on this issue?
Steering clear of this new debate that has been sparked off, maybe
unwittingly by TRAI, Baijal said, "We have started a consultation
process on various issues. I did not want a change in the status,
including rates (of cable service) till I have taken a final view
on the matter."
He also said that TRAI cannot put a stop to CAS rollout or take
any decision as a case relating to addressability is pending in
the Delhi HC. So, can the cable ops and MSOs push ahead with CAS
in South Delhi after a lull. "I suppose so," the TRAI
chief replied.
Further, what could have caused immediate confusion in the industry
is the fact that TRAI has issued two sets of communications, apart
from a press release sent to the media. One is the notification
and the other is the more than 10 pages of consultation paper.
CAUTION & CONFUSION PREVAILS
Surprising though, the fact that TRAI's first initiative for the
broadcast and cable industry hasn't elicited the type of enthusiasm
one had expected, considering a sizeable section of the industry
wanted a regulator to be in place.
So much so that many broadcasters either did not want to comment
immediately or did not want to be quoted.
Even the cable fraternity is confused. And it is not only Zee's
Goel. National Cable and Telecom Association (NCTA) president Vikki
Chowdhry said, "The official language is totally confusing.
But I read it as we don't have
to pay the extra amount of money being demanded by the broadcasters."
Cable Operators' Federation of India (COFI) chief Roop Sharma said
from Cochin, where she has gone to rally cable operators for CAS,
that she too is "slightly confused."
"Does the TRAI order mean that rates have been frozen all
over the country or for CAS zones? Who'll monitor whether the order
is being followed or not? Does TRAI have enough manpower to do an
effective monitoring of the situation?" Sharma came out with
a deluge of questions.
Valid questions, though. For example, for CAS zones, Star India
may have 'dropped' rates, but for non-CAS zones, according to the
cable industry, the network is charging Rs. 55 for the bouquet now,
up from Rs 50. Of course, it includes the newly-launched The History
Channel too.
Another broadcaster that can get effected significantly, ESPN-Star
Sports, was not available for comment.
A senior executive of Hathway Datacom, without wanting to get into
nitty-gritties, said, "It's good that TRAI has come out with
something. We'll study the material and revert to the regulator."
What is the moral of the story? Even a regulator, probably, would
need some time to understand the complexities of the broadcast and
cable industry. Now, that gives rise to a very fundamental question:
is TRAI adequately equipped to do so?
Also Read:
TRAI
notification freezes cable TV rates as on 26 December 2003
Click here for full details
of "The Telecommunication (Broadcasting And Cable) Services
Tariff Order 2004"
TRAI
releases CAS consultation note; seeks inputs by 30 Jan
For the complete TRAI consultation note, click
here
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