CAS comes at a price - let not government decide what that price is

Theres a lot of wishful thinking going on in government. That it can and should control pricing. That too, in a country which is moving from a shackled economy to a free one. That too, in a nation in which structures choked and weighed under by government control are being dismantled and slowly being handed out to private organisations to run. That too, in a nation in which price subsidies in almost every sector are being removed. And the sad part is that even the Prime Minister's name is being dragged into it. Continuously.

The issue we are referring to is the migration of the cable TV industry towards conditional access systems. The government has been driving it all along because the fractured, fragmented, rift-ridden cable and satellite TV industry has at first been playing the ostrich with its head buried in the sand, not in the least worried about getting order into its working. And later it has been playing the tortoise, loathe and slow to follow the governments whip which was being cracked in the shape of the CAS amendment.

The government mandating CAS is something we can stomach, because authorities in some nations have done so. India boasts of being the largest democracy. The US is the second largest. However, in the US CAS was not mandated. It evolved over time, with HBO being the first pay TV service. The industry and consumers drove it, not government.

We will accept the governments avowed honest intentions of having the consumers interest in mind for shoving CAS down everyones throats. That is a lower monthly cable TV tab for viewers.

But logic states that unless a free market situation is established with competitive forces coming into play, prices never come down. They always go up.

Even the US Federal Communications Commission is kept busy on this account. Like a vigilante, it keeps a hawks eye on anyone spiking rates, swooping down on any errant player once a cry of excess is heard. The propensity to cartelise and hike rates is there even in a competitive market like the US. Expect nothing different from monopolistic and opportunistic cable TV operators, MSOs and broadcasters in India.

The rate card proposed by broadcasters two days ago hence comes as no surprise. The MSOs are raising Cain and are asking the government to intervene by putting a ceiling on rates. And information & broadcasting minister Ravi Shankar Prasad has been like a CAS evangelist, preaching everytime that pay TV channel prices have to be consumer friendly. Who is to decide what is consumer friendly? Should it be consumers or consumer organizations with vested interests? Or should it be left to market forces? Does the government decide what the cover price of The Times of India or a Mid-Day should be on a weekday or on a Sunday? If it decides on pay TV channel rates, then it should do the same for even the price tags on shirts, pants, chocolates, and what have you.

The government should understand that if cable TV rates are pegged too high only those who can afford the sticker prices will subscribe to the service. Others will not. Those who find the cost too steep and cannot do without their daily TV fix will in all likelihood raise a hue and cry. And if there are enough numbers of these to justify rate cuts, theres no doubt that the cable TV operators and broadcasters will wilt under the viewer pressure. Remember, pay TV and CAS has to be made viable as a business model.

What is trying to say is that let pricing be left to market forces, let not the government decide the cost to consumers. There is going to be pressure from all sides, especially the cable TV trade, and other vested parties. Stand firm. You have drawn the route map. Now work with the industry and trade towards its successful implementation.


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