Why penalise the viewer?

What TV viewers in Chennai have been suffering for the last few years will now be visited on their counterparts elsewhere—thanks to a court order that asks the government to introduce the conditional access system (or CAS) in four weeks. The CAS was to have been introduced across the country in 2003, but the government got cold feet in the wake of public misgivings about its claimed benefits. In Chennai, companies that had imported set-top boxes were able to get a court order that kept the system going in the city. Now the same principle of damage to commercial interests has prevailed, so the CAS will be introduced to a much wider audience. Expect public criticism to grow, and with reason.

At the heart of the CAS issue is the dispute between broadcasters and cable operators about the honest reporting of cable connections and therefore income. The broadcasters accuse cable operators of large-scale under-reporting, which is a fact. The cable operators respond that it is the broadcasters who have jacked up fees in recent years, so more money has been going to them—also a fact. The issue is whether the TV-viewing public should be made hostage to this dispute about who makes how much.

The overwhelming majority of TV-owning households in India are connected to cable, and the monthly charges are mostly reasonable. So the system works, except that local monopolies have developed. Cable households therefore have one complaint: lack of choice when there is poor service. The CAS, as it has been dreamt up, does not address this problem. The set-top boxes that are to be supplied are not open architecture; so you are tied to one supplier of cable service, and cannot switch if unhappy with the service—since you have forked out a substantial sum to buy the box. The sole benefit claimed for the viewer is that s/he can decide which channels to buy and pay for; but with broadcasters jacking up fees and the government or regulator deciding what rates to charge, no one expects to be paying less for taking less. But a lot of set-top boxes, costing a few thousand rupees each, will be sold. At Rs 4,000 per box and 70 million cable homes, the potential money to be made is Rs 28,000 crore.

More important than introducing a monopoly CAS at this cost is to offer the viewer choice. The government had dragged its feet on the direct-to-home (DTH) service, but two services may become available soon. In addition, telecom firms are experimenting with signals to your TV through their networks—state-owned MTNL is already doing field trials. And Verizon in the US hopes to launch its TV/video services on high-end phones by October—a communications expo in the capital a few weeks ago had Qualcomm demonstrating the technology, and at least one Indian telco is examining its feasibility. Given the promise of choice, it is important that TV households are not steamrolled into buying set-top boxes when alternatives will soon become available. The government should seek time from the court to introduce the CAS simultaneously with DTH, so that consumers can choose. And the government must guarantee genuine choice by ensuring that the cable operator and satellite operator (and later the phone company) are competing entities. If the issue before the court was the commercial losses of those who imported set-top boxes, the court should simply have asked the government to pay compensation. There is no reason to make the TV viewer the fall guy.