ITV

Tag: CAS

  • Delhi HC orders Government to implement CAS within four weeks

    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.

  • CAS Ruling: MSOs now have the ammo to take on DTH

    CAS Ruling: MSOs now have the ammo to take on DTH

    It was one piece of news that cable TV networks were waiting to hear for long, too long in actual fact!

     

    Buffeted by potential competition from direct-to-home (DTH) operators, the timing of the Delhi High Court ruling that has ordered the government to enforce the rollout of conditional access system (CAS) in India within four weeks couldn’t have been more crucial. Tata Sky is preparing to launch in June and Dish TV, at present the only existing private sector DTH service provider, is expected to sort out programming contracts with Star India and SET Discovery by then.

     

    Cable TV can take DTH head on with its digital service. It has the firepower to do so, having built a rich battery of last mile operators (LMOs) who have serviced consumers over the years.

     

    Firstly, it can cobble together more channels than DTH can offer at the initial stage when the consumer is making the shift from analogue to digital. Already, some MSOs are making available a little under 150 TV channels. DTH operators, on the other hand, are limited by transponder space on satellite and can only ramp up under MPEG-4 compression technology.

     

    Second, cable TV can bundle broadband and, with preparation in future, telephony services.

     

    Third, it can develop interactive features with its fibre network.

     

    Fourth, it has manpower in place which can be quickly energised to push digital set-top boxes (STBs).

     

    Sure, MSOs and independent operators would have preferred the courts to have come up with the same verdict much earlier, after the government withdrew CAS in 2004. That would have given them a first mover advantage with a considerable time lag before DTH could kickstart operations.

     

    But there was one issue which had still to be sorted out for an effective rollout: LMOs felt insecure and did not back the rollout of digital cable. With competition from DTH looming large, they now have the support of their franchisee operators.

     

    But what if the verdict on CAS had come after Tata Sky’s launch and Dish TV’s content contracts had been stitched with Star and Sony? Cable TV operators would have been able to fight against DTH with two weapons in their armoury – analogue cable and voluntary digitalisation. On analogue cable, operators have the flexibility of dropping subscription fees drastically. With a price warrior in place through analogue service, digital cable could offer an alternate choice to consumers to combat DTH head on. On the flip side, the digital service would still remain unaddressable while DTH could provide consumers the choice of selecting channels and packages they want to pay for.

     

    Under CAS, cable operators do not have the flexibility of delivering pay channels on their analogue network. Consumers will have to select between DTH and digital cable for receiving these channels. They will, in other words, have to buy either a DTH or a cable TV set-top box.

     

    But delaying the direct knock-to-knock face-off between cable and DTH operators hardly serves any purpose. The business model for MSOs and independent operators can only get worse if no CAS is in place. Because the way out to stop DTH from invading into cable territory without a properly tiered and price-packaged digital service would have been possible only through rate drops. While LMOs would have been unaffected, the MSOs would have felt the pinch.

     

    Retooling business strategies and organising the sector is in the commercial interest of the cable operators. The hour has come to change the mindset and bring in quality and service-oriented practices. It will be meaningless to wish away competition from DTH and later IPTV providers.

     

    Several networks already have a stockpile of digital STBs. So far, they have been unable to place these boxes in consumer homes. Even Hathway Cable & Datacom, the more aggressive of the digital cable TV players, claims it has managed to distribute just 40,000 boxes. It would do better for operators to take a more positive view: that with CAS, digitalisation, either through cable or DTH or IPTV, would move faster.

     

    After all, the market is too big and diverse for any single player to cover it all.

     

    Ensuring a ramp up in supply of boxes, erecting a solid encryption system, and having a sound billing mechanism should be the focus areas. Also, it is crucial for operators to find more, better and premium content which can lure customers. They will also have to work out rental schemes and low up-front charges to subsidise the boxes in order to stay competitive with DTH.

     

    Another hard lesson to be learnt from this is that investments on old technologies won’t help. For those who have put their money on analogue STBs, the chances of surviving the battle look grim. Yes, there is a market for free-to-air analogue service. But no, not for analogue STBs as that will limit the channel offerings at a time when supply is growing rapidly.

     

    There will be competitive pressure for cable operators to upgrade their networks and services. Territorial monopolies will end and cable operators will also have to fight amongst themselves for retaining or acquiring subscribers.

     

    DTH, of course, retains one advantage. It has a national footprint while CAS is limited to the four metros in the first phase. This will give DTH economies of scale, but then it will still face the big hurdle of drawing in consumers to buy a box in the non-CAS areas.

     

    By bringing in CAS, the MSOs realise the entire business model changes in favour of them. Gaining control over the entire value chain across the network and having an addressable system will pump up valuation of cable companies and draw in global investors.

     

    The green signal on CAS couldn’t have come at a riper time. If there is any year which can drive digitalisation forward, this is it. In June-July, ESPN Star Sports will show live the football World Cup. The other key properties on the roster are ICC cricket Champions Trophy in September and the cricket World Cup early 2007 (both events on Sony).