Ms. Roop Sharma

Report
Presentation By
Mrs. Roop Sharma
President
Cable Operators Federation of India (COFI)
We need to Review the DAS Law and Regulations
TDSAT Seminar, Gangtok (Sikkim)
17 September 2014, Hotel Mayfair, Gangtok
Mobile: 9810069272
[email protected]
Digitalisation Law Introduced for 1. Transparency
a) Revenue to Government.
b) Pay Broadcasters to get full revenue.
c) Correct TRPs.
2. Consumers to get good quality cable service,
Broadband, Internet at reasonable rates.
3. A-la-carte choice and lowered billing to consumers.
4. LCO/ LMO not to go out of business.
5. Increase in ARPUs through VAS like VoD, Games, eServices.
2
Digitalisation has happened
But Here Digitalisation means Seeding of STBs
seeding of imported old technology based STBs without
BIS standards, no BEE rating, no Interoperability, MPEG2
old technology, No guarantee and warrantee; forced on
consumers with billions of foreign exchange going outside
the country without achieving the above.
 No promotion to Indigenous Manufacturers
 No Right of Way given to operators by States
NO ADDRESSABILITY
Minimum Guarantee Deals, Gross Billing,
Default Packages Still CONTINUE
3
NEW ERA- NAYA DIGITAL ZAMANA
Digitalisation is good but …..
 Regulations are biased in favour of
broadcasters & large MSOs
 Method of implementation is WRONG.
 Time lines are not practical/ Prerequisite
not done.
 REVENUE SHARE NOT FAIR FOR
LMOS- TOO LESS TO SUSTAIN
BUSINESS EVEN.
4
TRAI’s Draconian Regulations that are
Dangerous to Cable Operator’s Business
1. Tariff Order :dt. 30.04.12 (No 3 of 2012)
2. Interconnect regulation: dt: 30.04.12 (No 9 of 2012)
3. Quality of Service regulations: dt:14.05.2012 ( No 12
of 2012)
4. Consumer Complaint Redressal (DAS) Regulations
dt:14.05.2012 (No.13 of 2012)
Infringement of Fundamental Rights (LCO’s Business
Rights on consumer data, billing, CAF/ SAF Forms,
activation/ deactivation of STBs etc. have been given
to MSOs. He has been made only a service and
collection agent by TRAI without a fixed salary)
5
TRAI’s Draconian Regulations that are
Dangerous to Cable Operator’s Business
 Revenue share of LCO to be decided by MSO after
mutual negotiations. LCO needs a barest minimum fixed
revenue to build, upgrade, maintain and operate his network
to provide prescribed standards of service to consumers.
This minimum not defined and not assured. CAS regulations
had assured him this.
 Clause 4(a) of Tariff Order : FTA & Bouquet of FTA
Channels, Revenue share of MSO-55%, LCO-45% as a
fallback arrangement.
 Clause 4(b) of Tariff Order: Pay Channels and their
Bouquet. Revenue Share of MSO- 65%, LCO- 35% as
fallback arrangement.
6
DAS :-Disputed Addressable
Systems
Tariff Order No. 3 of 2012
Dt. 30 Apr 2012 (Contd)
 Clause 6(1) (B) of Tariff Order: MSO to decide rate of BST
Bouquet- Not to exceed Rs 100, can be lower than this, thus
revenue share of LCO can also go down lower than Rs 45.
 Clause 6(1) (D)Tariff Order: subscriber of DAS to subscribe a
basic service tier or basic service tier and one or more pay
channel or only free to air channels or only pay channels or pay
channels and free to air channels. (Note: If subscriber subscribes
only a few pay channels, LCO share will further go down).
 Clause 6(1) (E) Tariff Order: MSO will decide rate of Pay
channels or their bouquet with a minimum monthly subscription,
not exceeding Rs 150 (exclusive of taxes) per month.
7
Definition of MSO
Definition of MSO as given in Cable TV Rules 2012
 MSO can do direct networking in the last mile. Thus he is a
competitor to his own LCOs.
 This is also against Supreme Court judgment of 2007 in the
case of Star TV v/s Sea TV (Appeal (civil) 5524 of 2005.
“Multi-System Operator” means a cable operator who has been
granted registration under rule 11C of the Cable Television Networks
Rules, 1994, and who receives a programming service from a
broadcaster or its authorised agencies and re-transmits the same
or transmits his own programming service for simultaneous reception
either by multiple subscribers directly or through one or more local
cable operators and includes his authorised distribution agencies, by
whatever name called”
8
Unfair Revenue Sharing
Only LCO Revenue being shared,
not of MSO or Broadcaster
LCOs
MSOs
Broadcasters
Subscription from FTA
channels(only 45% share left)
Earlier LCO kept 100%
Get 55% of FTA channel
revenue.
Get paid for all channels,
selling in bouquet or a a-lacarte.
Subscription from ‘Pay’
Channels( only 35% share left)
Consumer may or may not opt
for a ‘Pay’ channel
If vertically integrated MSO, he
gets most of the 65% of Pay
Channel Revenue.
Force unpopular channels to
subscribers in bouquets and
get paid even for them, FTA or
Pay.
Revenue from Broadband/
Internet (all gone to MSO)
Uses LCO network for reaching
broadband to subscribers.
Does not pay any revenue
share.
.
Get advt revenue in ‘Pay”
channels too.
Revenue from ads in local
video channels (All gone to
MSO)
In analogue and CAS Regime,
LCO/ LMO was able to run a
video channel and earn
revenue and could subsidize
poor consumers.
All Revenue from Video
channels gone to MSO. A
number of local video
channels(unregistered), to the
extent of 20 channels or more
are provided to consumers
using LCO network. No ad
revenue or carriage fee given
to LCO.
Revenue from sponsored and
promotional programmes.
Revenue from dubbed
channels, channels created by
mix and match of their other
channels like old serials etc.
where no content cost involved.
Unfair Revenue Sharing (Contd..)
LCO
MSO
Broadcasters
Revenue from sponsored
local programmes-(All gone
to MSO)
LCO/ LMO do not get any
CARRIAGE Fee
Gets heavy carriage fee from
hundreds of channels without
sharing it with LCOs whose
networks are used to reach
the subscribers.
Revenue from paid news
campaign.
Retained consumers with
local news, community
functions and live shows. (All
gone to MSO).
Makes money from political
campaigns, value added
services(HD, VOD, games),
paid news and other
sponsored events but no
share given to LCOs to use
his subscribers.
Revenue from In-content
advertising, tickers, logos,
scrolling ads and violate adcap rule prescribed in Cable
TV Rules, still get away
LCO builds, maintains,
operates, upgrades and
service his network, pays
salaries to staff.
MSO floats IPO and makes
huge money from public
based upon connectivity of
the LCOs but does not make
them partner of his business
Sell Indian content in
international market but do
not benefit Indian
subscribers.
LCO/ LMO is the biggest
Loser, fearing
unemployment
MSO is the Second
Gainer creating virtual
monopolies
Broadcaster is the gainer
10
in DAS Regime
Unfair Revenue Sharing (Contd..)
LCO
MSO
Broadcasters
Revenue from sponsored
local programmes-(All gone
to MSO)
LCO/ LMO do not get any
CARRIAGE Fee
Gets heavy carriage fee from
hundreds of channels without
sharing it with LCOs whose
networks are used to reach
the subscribers.
Revenue from paid news
campaign.
Retained consumers with
local news, community
functions and live shows. (All
gone to MSO).
Makes money from political
campaigns, value added
services(HD, VOD, games),
paid news and other
sponsored events but no
share given to LCOs to use
his subscribers.
Revenue from In-content
advertising, tickers, logos,
scrolling ads and violate adcap rule prescribed in Cable
TV Rules, still get away
LCO builds, maintains,
operates, upgrades and
service his network, pays
salaries to staff.
LCO/ LMO is the biggest
Loser, fearing
unemployment
Sell Indian content in
international market but do
not benefit Indian
subscribers.
MSO is the Second
Gainer creating virtual
monopolies
Broadcaster is the gainer
in DAS Regime
11
Revenue Share
BONE OF CONTENTION
 LCO/LMO Builds, Operates, Maintains
Network and provide Service to
consumer, collect Tax but
MSO DECIDES HIS REVENUE




LMO/ LMO Share 35% of Pay Channels
45% OF BST (Basic Service Tier of FTA Channels)
NEGOTIATION/ OFFER OF MSO on Revenue share is Temporary, only
an EYEWASH to trap and divide LMOs.
 MSOs provide same CONTENT but different offers.
 Payment of Taxes
 TRAI should Relook on MSO/ LCO relationship & Revenue Share.
NOW MSO Negotiations an Eye-Wash. If fail, only 35% for
LCO/ LMO
12
13
14
DAS:- Disputed Addressable System
Quality of Service Regulations , 12 0f 2012
(Dt 14 May 2012)
Even after two years of implementation and
Eleven Directions ( Recent ones : 02 Dec, 13 Dec 2013 & 27
May 2014)
 MSOs are yet to generate bills as per SMS system.
 Many FIRs have been registered against LCOs
 Consumers are forced to pay higher subscriptions to please
‘Pay’ Broadcasters.
 Threatening advts are shown to consumers by TV channels,
either to fill up CAF or face a blackout.
DO WE CALL THIS A SUCCESS OF DIGITISATION?
15
TRAI Adds Fuel to Fire
DAS :-Destructive Addressable Systems
Pay channel tariff hiked by 27.5% from 01 Apr 2014.
(In two steps)
 TRAI went to Supreme Court on its own to help Pay channels. Rates
increased without consultation and open house discussion and
ignoring all ground realities
 Who gains? Large broadcasters who control pay channel distribution
through their aggregators, DTH and MSOs.
 Who loses? Millions of poor people living in Phase 3 & 4 areas which
are not digitised suffer the most. Phase 1 & 2 subscriber also pay more
for Pay channels.
 Media Gagged. NO Protests as Media is a partner or gagged and no
news goes out.
This Hike has been challenged in TDSAT by a consumer
organisation , Independent MSOs and many LCO
Associations.
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Introduce Interoperability
We welcome new government ‘s stand to bring
interoperability in STBs.
This requires 
BIS specifications for STBs be amended.

TV standards be be redrafted to include CI (Common Interface) in IDTV sets(
Integrated Digital TV) so that separate STB is not required.

Cable TV Rules 2012 should be amended .

Interconnect Regulations require amendment. This will make one sided audit
requirement of Pay Broadcasters redundant.

A common CAS be designed and made mandatory by the government. DOT is
already in the process of creating an Indian CAS.

STBs must be available in the open market as stipulated in Cable TV Rules and
TRAI Regulations.
17
Wishlist of Cable Operators
 DAS licence should be given to group of
operators co-operative on Fast track basis. Pay
channels should be made available.
 Licence /Registration for 10 years for Cable
Operators like DTH and MSO.
 Review of Regulation of Tariff Order,
Interconnect Regulation, QoS etc.
 Digitisation in Phase III & IV should be ongoing
process. Broadcasters must make DAS
interconnect deals.
18
Wishlist of Cable Operators (Contd)
 CAS type Revenue Share model to ensure a fixed minimum
revenue to LCO per subscriber.
FTA-100%
Pay TV-25%
 Retail MRP of every pay channel to be Fixed - Like Rs 5 in CAS
(Conditional Access System).
 Encourage digital FTA networks and 30-50 unencrypted FTA
channels including Doordarshan in all digital Networks, atleast for
next five years to help poor consumers adopt digital technology
without undergoing financial hardship.
 Ownership of Customer connection remain with LCO.
 Standard Interconnect Agreement made by TRAI for all MSOs,
LCOs and consumer.
 Billing, Activation, deactivation of STB with LCO. Also CAF, SAF
Forms with LCO.
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Wishlist of Cable Operators (Contd)
 LCO should get a share of Carriage Fee paid to MSO by
Broadcasters.
 Carriage Fee of video channels of MSO should also be given to
LCO for using his network
 Advertisement Revenue of Video Channels of MSO should be
shared with LCO.
 Indigenous (Local) Set Top Box manufacturing encouraged.
 STBs should be available in open market as given in regulations.
 Uniform/ No Entertainment Tax all over India.
Standard Agreement for all MSOs.
 Disconnection of Signal to LCO by MSO should not be resorted
to in consumer interest. MSOs should treat LCOs as partners
rather than always look at capturing them by unethical means.
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We are thankful to TDSAT
 What MIB and TRAI should have done, is being done
by TDSAT
 It is Finding flaws in Regulations
 It is trying to create level Playing Field between all
stake holders
 TRAI thinks once it has framed the regulations on
paper, it has finished with its responsibility.
 MIB thinks, once a law is made, its job is finished.
 Both TRAI and MIB play the ball game passing the ball
in each other’s court to take next step
 Both MIB and TRAI take shelter of Parliament passing
the law and forget that it is they who drafted it .
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Please Don’t Let This Happen to
Cable Operators
22
Mrs. Roop Sharma
Mobile: 9810069272
[email protected]

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