Broadbandindia Magazine

But the Bill is not just about shifting from analogue to digital. From the industry perspective, aren’t you worried about the controls digitisation will bring about ? Why would digitisation be about control?

Lok Sabha passed the second Bill to amend the Cable TV Networks (Regulation) Act 1995 that aims to replace the Ordinance promulgated. Also Rajya  Sabha has passed the Cable TV Networks (Regulation) Second Amendment Bill which has already been approved by the Lok Sabha. Information and Broadcasting Minister Ambika Soni, while talking on the discussion on the Bill, assured the cable operators that they would not be “put out of business” contrary to fears expressed by some quarters with digitisation of cable services, and capacity building programmes would be held to apprise them with new technologies. Soni said that an enabling provision had put in place to the effect that only Rs 200,000 to Rs 300,000 would be needed by cable operators to move to digitisation. She said digitisation would give a true assessment of the subscriber base of the broadcasters and reduce dependence on advertisements. In turn, this may also lead to reduction in the vulgar content on television channels as there would be lesser dependence on TRPs.

Apart from improving the quality of reception, digitization would also empower the viewers and the cable operators. It will enable cable operators to give larger number of channels to the consumers. There will be no prime band after digitisation, she said. She said the Bill would plug revenue leakage and enable regulatory agencies to check illegal content. Soni said that with the passing of this Bill, the Headend-in-the-sky (HITS), which had so far failed, would take off with greater investments. While most members supported the Bill, they cautioned the government against exploitation of the common viewer in the form of unjustifiable hikes in  the cable rates and vulgar and misleading advertisements.

The Bill aims to digitise the cable sector in the country by 31 December, 2014. The Government had earlier announced a timetable for complete digitisation of  cable television in the four metros by 31 March, 2012, but this was put off to June 2012 in a notification issued subsequently. The target date for completely digitising cable sector in cities with population of more than one million was 30 March 2013, all urban areas by 30 September 2014, and the whole country by 31 December 2014. This will also mean an end to the analogue era and customers of cable networks must have a digital addressable set-top-box irrespective of whether they wish to receive free-to-air or encrypted (pay) channels.

The delay for two months is because the Government had laid down in the Ordinance that promulgated earlier this month that six months notice will be given to the cable TV operators to enable them to install the necessary equipment for transmitting encrypted channels through a digital addressable system, in keeping with the deadlines set for this purpose for various states and cities. A clause has been inserted in the Act to make a digital addressable system mandatory in the cable sector. The amending Bill also has provisions for right of way and systemisation for registration of cable operators, inspection of cable services, compulsory transmission of certain channels, prescription of interference standards by the government and an enabling provision for the Telecom Regulatory Authority of India to lay down the basic service tier and its tariff. After digitisation, all cable operators carry encrypted signals only through digital set top boxes in accordance with the deadlines that have been notified.

Financial support

The ministry of Information and Broadcasting (I&B) plans to push for financial incentives to ease the import of equipment, including set-top boxes, to help speed up the process of converting India’s cable TV distribution system from analogue to digital. The steps being considered include raising the foreign direct investment (FDI) limit for cable companies to 74% from 49% and launching awareness campaigns on the merits of digital cable. The ministry will help the industry make a smooth transition to digital cable, Uday Kumar Varma, secretary at the I&B ministry, said at the second CEOs Roundtable on Broadcast, organized by the Confederation of Indian Industry (CII). Varma’s remarks followed the Lok Sabha passing the Cable Television Networks (Regulation) Amendment Bill, 2011.“The likely passage of the Bill in Parliament will show the commitment of government to the change,” Varma said. “Digitizing will be beneficial for all stakeholders… (and) play an important role in the economy, particularly the broadcasting industry.” An investment of $8 billion will be required for digitizing Indian cable TV networks in the next three years, Varma said, citing a report by Media Partners Asia Ltd, a leading independent provider of information focusing on the media, communications and entertainment industries.

The ministry has already written to the Department of Industrial Policy and Promotion (DIPP) seeking an increase in FDI in the cable industry. The ministry is also in discussions with the finance ministry to provide financial incentives, give tax holidays and customs concessions, given that most of the equipment— including set-top boxes—is usually imported. In the first phase, by June 2012, roughly 8-10 million set-top boxes will be required for all four metros. The ministry has already moved a cabinet proposal to set up a committee of secretaries in a bid to communicate the views of all stakeholders. Through this committee, the ministry will help organize discussions by stakeholders to convey their concerns directly. “This is essential so all viewpoints can emerge and discussed properly,” said Varma.

Besides, the ministry is already working on a public awareness campaign. Though he declined to share how much will be required for the campaign, Varma said “certain allocation for the same will be provided in the 12th National Plan”.Nearly 230,000 people will have to be trained in various departments in several Indian cities to ensure that the migration from analogue to digital takes place, the ministry has said. A capacity building programme has already been launched by state-run Broadcast Engineering Consultants India Ltd. The first phase of the training programme will be launched by next week in some of the metros, said Varma.

Boost small screen content

A bill aimed at digitalization of cable TV with the government assuring that the move would be beneficial for viewers and lead to better and more meaningful content. Information and broadcasting minister Ambika Soni, who had earlier introduced the Cable Television Networks (Regulation) Second Amendment Bill, said it was a major step towards reform that would enable digitalization of the analog TV network and bring India on a par with other countries like the US, the UK, Korea and Taiwan.

On the issue of regulating content on TV, Soni told the House that she was open to the idea of holding an all-party meeting to discuss the ministry’s broadcast regulation bill. A draft Broadcasting Services Regulation Bill has been posted on the website and a final bill could be brought for consideration of Parliament after the stipulated time to get feedback from various stakeholders is over, Soni said during Question Hour in the Lok Sabha.

The minister said a Group of Ministers on media has been set up and some of her Cabinet colleagues have started an open debate on it. “We are getting views. After collating the views, we want to bring a law which is beyond the self-regulatory body that has been set up…I have no objections if a law is made after an all-party meeting is convened by the Prime Minister in which views of everyone are taken in writing,” she said. Speaking on the amendment bill later, Soni said that concerns that cable operators would become jobless were misplaced and insisted that the main concern of the government was the viewers’ interest. “The prices of settop boxes will fall. These will be available on both installments and on rent. Also, viewers do not have to take a whole bouquet of channels. TRAI will impose a tariff capping for subscribing to channels,” she said.

The most important aspect of this legislation is that it would end the fight for more TRPs among channels. The bill also gives the government the right to cancel licences of cable operators who flout rules. “But this bill is not anti-poor and not against small operators. This is not for big players. It is for India,” Soni said. The minister justified the government decision to bring an ordinance earlier, saying this was done to meet the deadline set for full digitalization by December 31, 2014. The government will complete the process in four phases, starting with the metros. She said it would benefit the customer by providing a la carte selection of channels and video-on-demand, and for broadcasters and cable operators by ensuring transparency, reducing their dependency on TRP and ad revenues and raising subscription revenues. The government would also stand to benefit as it would ensure proper tax collection, she added.

Wrapping up

It was a joyful matter for the digitization drive when Parliament gave its clearance for the initiating the digitization step in the country. But the Bill is not just about shifting from analogue to digital. From the industry perspective, aren’t you worried about the controls digitisation will bring about? Why would digitisation be about control? The entire broadcasting chain in India has been broken for some time. Broadcasters have always got either no subscription money or very little—only 18% of the total income. Broadcasters were always paying very high carriage fees. Consequently, subscription or distribution, which anywhere in the world would have been a major distribution source for a broadcaster, has become a major cost centre for them. That’s the way this thing has been there for a long time.

I&B Minister Ambika Soni says that the Bill will end Television Raring Points (TRP). Broadcasters have been entirely banking upon advertising and, therefore, entirely depended on rating—that’s why there is the mad race for TRP, which everyone keeps complaining about. Now, for the first time, the distribution environment has changed. Hopefully, carriage fees will come down and subscription revenues will go up so that there are alternative viable business models for broadcasters.

This is not directly affecting TRPs but certainly indirectly. People will now start looking for a slightly different business model. The economic pressure on broadcasters, who are dependent on TRPs, will hopefully go down a little bit. But we do feel that, in general, we have to look at the rating measuring system. We do think this is to some extent flawed. The sample is not large enough; it doesn’t always reflect what people are watching. There are also questions whether it is completely tamperproof. There are lots of complaints. The rating system itself needs a lot of work. After the Cable Bill, TRP should be next. Broadcasters and Television Audience Measurement, not the government, should figure out how to improve the rating system and make it slightly more robust to find out what people are watching.

The Telecom Regulatory Authority of India (TRAI) has to decide on the fine print regarding the cap. Lot of things have to be sorted out like how it is actually going to work and what will be the requirements for cable operators in terms of payment. Obviously, there is a long way to go, but, at least, the Bill has set into place enabling conditions for a modern, mature, organized and systematic broadcasting sector, which is a very positive development.

So, are you happy with the Bill? TRAI has lot of work to do on this. It will obviously take some time. The Bill still doesn’t cover the rating system and that has to be separately addressed. This is an important step towards professionalisation of the entire broadcasting value chain from the broadcaster to the distributor and to the customer.