Delhi HC orders Government to implement CAS within four weeks

NEW DELHI / MUMBAI: In a decision that could have major ramifications for the Indian television industry, the Delhi High Court has ordered the government to enforce the rollout of addressability in cable pay television (conditional access system or CAS) in India within four weeks.

Delivering its verdict on a writ petition filed by a bunch of MSOs, after reserving the judgement for several months, the court also directed the government to pay damages worth Rs 100,000 to the petitioners. The court has ordered the government to make haste on the report of the Telecom Regulatory Authority of India (Trai), which has been pending before it since October 2004.

The court has ordered the government to revoke its notification of 27 February 2004 that scrapped the rollout of CAS in the three metros of Mumbai, Delhi and Kolkata in phases (it eventually got implemented only in Chennai). This in effect will revive the notification of 10 July 2003 which provided for partial CAS in these three metros.

The Delhi HC also said that the government cannot denotify an earlier notification on CAS and keep the issue in limbo. The government has the right to appeal against the order in Delhi HC and Supreme Court.
No immediate reaction, however, was available from the government as information and broadcasting ministry officials said that the court verdict is being "studied in its entirety."

The court gave the order in response to a writ petition filed by MSOs in response to the government's decision to withdraw CAS. The petitioners include Hathway, INCablenet and RPG's cable company that was bought over by Siti Cable last year.

Reacting to the court direction on CAS, MSO Alliance president Ashok Mansukhani said that their viewpoint stands vindicated. "The verdict is a clear direction to the government to start the process of CAS, which will help bring transparency in the market and choice to consumers."

Added Hathway Cable & Datacom CEO K Jayaraman: "We will cooperate wholeheartedly with the government to roll out CAS."

But with Tata Sky preparing to launch in June, is the timing too close for cable to have an advantage over direct-to-home (DTH)? "The deployment of digital cable is going to be in a phased manner as directed by the court in line with the last notification. It will evolve first in the notified areas of the metros specified, like south Mumbai and Delhi. Besides, cable networks who can offer value additions to subscribers like data and telephony will stand to gain. Also, analogue cable will be available," said Siticable CEO Jagjit Kohli.

Will supply of boxes at such a short notice be a matter of concern? Cable Operators' Federation of India head Roop Sharma brushes aside such criticisms saying, "The cable industry has enough stock of set-top boxes."

Welcoming the judgement, Sharma further said, "This would break the monopoly of broadcasters and bring respite to consumers also."

However, National Cable and Telecom Association president and owner of Delhi's Home Cable Network Vikki Chowdhry was more cautious in his reaction, saying the full text of the court order has to be seen before jumping to any conclusion.

According to Chowdhry, if the court order pertains to CAS rollout in only south zones of some cities, as once had been discussed earlier, then the impact would be neutralised and "create legal and operational problems."

Chowdhry added that if the south zone formula was implemented by the government, then his company would appeal against it to higher authorities, including the Supreme Court.

The court dismissed the government's contention that implementation of CAS was unjustifiable. The government has been ordered to compensate the MSOs for losses incurred due to the non implementation of CAS to the tune of Rs 100,000.

In January, information and broadcasting secretary SK Arora appeared before the court and sought three months time to implement CAS in the country. The request was rejected by Justice Vikramjit Sen. Petitioner Hathway Cable Datacom's counsel Indu Malhotra submitted that the government was only buying time to delay the implementation of CAS.

Additional solicitor general PP Malhotra, who appeared for the government, had submitted that the issue of CAS had been decided by another division bench of the High Court in December 2003.

CAS rollout plan as originally envisaged in 2003:

* Initial 15-day period will be used primarily for creating consumer awareness about CAS, procurement of set-top boxes by cable operators and MSOs, and for broadcasters of pay channels to conduct promotional campaigns.

* Each of the three notified metro cities (Delhi, Mumbai, and Kolkata) would be divided into four zones for the purpose of staggered rollout of the addressable system of transmission of pay channels.

* After the initial 15-day period, within a one-month time frame, in Zone A in each metro, pay channels can be watched only with the use of STBs. Pay channel consumers in this zone will be charged, in addition to the price of the basic tier plus taxes, only for the individual channels of their choice as per the pre-announced rates set for them.

Consumers of free-to-air (FTA) channels, who will not need an STB, will be charged only the basic FTA channel package charge plus taxes. In zones B, C, and D, cable operators will charged only for the basic tier plus taxes for all channels, including all available pay channels.

* From Day 1 of the second month onwards, CAS will take effect in Zone B in each metro, while in zones C and D subscribers will pay only for the basic tier plus taxes for all channels.

* And so it follows in Zone C from Day 1 of the third month onwards and Zone D from Day 1 of the fourth month onwards.

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