Barefoot Broadcast

It has all the trappings of a disaster. And even before it's been accepted by the government, the proposed technology to regulate the cable industry has been criticised by all interested segments—broadcasters, MSOs (multi-system operators), local cable operators and consumers. Last week, the Telecom Regulatory Authority of India (TRAI) proposed that an interim system, 'Trap', be introduced until policymakers take a final decision on CAS (Conditional Access System). Not surprisingly, just the mere announcement was enough to create another huge furore.

Trap, a four-inch device, is installed in cable homes and acts as a frequency lock to block access to pay channels in case consumers decide they don't want to watch them. TRAI chairman Pradip Baijal, the brain behind the proposal, feels that Trap(s) can be an alternative option to CAS. As he puts it, "The government has been trying to implement CAS for the last two years. Trap can at least take care of the situation now. Almost 20 per cent of cable homes in the US, Canada and Latin America are successfully using Trap."

But that's not the way the industry or consumers see it. The former feels that Trap is obsolete technology, prone to rigging and could lead to tremendous loss of revenues for both cable companies as well as broadcasters. Explains K. Jayaraman, MD & CEO, Hathway Cable: "It's a regressive technology. When cable companies are bringing in the latest digital technologies, TRAI is taking us back to the dark ages. It's not even clear who will put the Trap—the MSO or the last-mile operator, and who'll bear the cost." (From what Baijal says, it seems the consumer will not have to pay for Trap.)

The cable industry thinks the TRAI's proposal is a deliberate move to delay—or completely derail—the introduction of CAS. Agrees a CEO of a large cable company, "These are tactics to create confusion and delay CAS so that newer technologies like DTH (direct-to-home) and broadband comes in. Once that happens, subscribers may get fed up and opt for those." Let's also remember that because the nda government was keen to introduce CAS—at least initially, till it became a politically-sensitive issue before the national elections—MSOs had invested over Rs 800 crore in CAS-related infrastructure, including imports of digital set-top boxes to be purchased by consumers. Obviously, if Trap is introduced, the investments will go down the tube.

Ironically, the introduction of Trap will lead to more problems, instead of solving existing ones. Says Dinyar Contractor, a cable industry expert: "They're diverting attention, introducing the concept of Trap which will go against everything that CAS promised." For instance, Trap may turn out to be more expensive than CAS' set-top box, estimated to cost Rs 3,000 each. And it'll be the local operator or the MSOs who'll have to bear this fresh burden.

Here's how the math works out. Blocking out each channel will require a separate Trap, which costs Rs 300-500 per device. So, if a subscriber decides he/she doesn't wish to watch 20 of the 40 pay channels available currently, 20 Traps will have to be installed at a cost of Rs 6,000-10,000, or much more than the set-top boxes. Think of it in another way—with each Trap being four inches long, 20 Traps would take up nearly seven feet of space! Adds an agitated cable operator: "Mumbai has two million cable homes. We'll need 40 million Traps in case even half the subscribers opt out of the 40 pay channels." The use of Trap may also lead to a major loss in signal strength. Explains Ashok Mansukhani, V-P, corporate affairs, IndusInd Media: "At 20-35 dB (decibels) loss per insertion, the subscriber may hardly get any usable signal at the end."

Experts also point out that Trap has other loose ends.First, it is a passive device and, therefore, can only be monitored through physical inspection. So the current system will continue; broadcasters and MSOs have no way of knowing who's watching what channels, and local cable operators can continue to misrepresent subscriber-related data to broadcasters. At present, the industry estimates that subscribers' declaration by the cable operators is a pathetic 10-30 per cent. This leads to substantial revenue loss for broadcasters, who collect a specific charge per subscriber from the local cable operators. In fact, this was one reason why policymakers were interested in CAS, which can be monitored at any stage of the network.

Add to that the fact that even local operators won't find it easy to monitor cable homes—Trap will be installed in the consumer premises and will be open to tampering. (In the US, Trap is installed on 40-50 feet high poles and is relatively tamper-proof.) TRAI's Baijal, however, says that rigging is present in all metering devices and can be tackled only by better monitoring as is being done in the case of electrical and water meters. But in India, firms have experimented with Trap, and the results have been disappointing to say the least. Three years ago, a cable company introduced it in Thiruvananthapuram, Kerala. More recently, it was introduced in small pockets of Dahanu in Maharashtra and in Gujarat. In each of these cases, it didn't meet with much success.

Finally, whether it's CAS or Trap, DTH or broadband, the fight is about supremacy and a bid to control the technology that's supported by policymakers. It's clear that Baijal, who says the decision on Trap will be taken within a month, does not like CAS. He's not convinced about CAS's efficacy and feels issues like inter-operability of set-top boxes between MSOs have to be thrashed out before a full-scale rollout. He asks, "As a regulator, am I responsible for an unimplementable CAS that was introduced through legislation and was not successful? We cannot ultimately impose a mandatory CAS. Nowhere in the world is CAS mandatory. We have to be convinced of a regime that is implementable."

Such an attitude will help new broadcast technologies like DTH and Broadband, which will be available in the near future. Reliance Industries, for instance, is planning to start its consumer broadband initiative in the next two months, while the Tata-Star TV DTH rollout is scheduled for October-November this year. Zee TV's DTH service, Dish TV, is already up and running. Moreover, to woo customers, the newer technologies are pricing their offerings quite competitively. Zee, for instance, offers its equipment for Rs 7,500 per subscriber, but charges a low Rs 200 per month. That would be true for Reliance and the Tata-Star combine too, and their one-time costs may be lower.

Not surprisingly, the major MSOs formed an alliance last month to fight the Trap proposal. The alliance includes IndusInd Media, Hathway Cable, Siticable, Sumangali Cable Vision (owned by telecom minister Dayanidhi Maran's family), and rpg, who together account for around 40 per cent of the estimated 50-million cable and satellite homes. It has submitted a memorandum to both the prime minister and TRAI stating its members' views. With the cable industry up in arms against TRAI's Trap proposal, it'll be difficult for the government to push it through. But signals are going to be quite distorted till all these issues are sorted out.