The Hindu : CAS and controversy

Online edition of India's National Newspaper
Tuesday, Jun 03, 2003

Opinion

Opinion - Editorials

CAS and controversy

BY DRASTICALLY REDUCING custom duties on set-top-boxes, the Centre has attempted to address the main concern of consumers over the introduction of the Conditional Access System (CAS) — the high cost of these contrivances. As a result, imported set-top-boxes will become available (albeit for a short period) at almost half the price in the four metropolitan cities where CAS will be implemented. By taking a good part of the financial sting away from the changeover to CAS, the Centre may have partially appeased consumer sentiment. But this does not mean that switching to the proposed new cable television regime will now be a cakewalk. Pressure from the powerful lobby of broadcasters against implementing CAS is unabated and the entire issue has become complicated with the involvement of politicians, who fear that the new system may alienate the so-called middle class vote bank.

Vested interests have contributed towards spreading a great deal of misinformation about the Conditional Access System, which has certain obvious benefits over the somewhat chaotic and under-regulated system that exists now. Set-top-boxes solve the problem of massive under-declarations of subscribers by cable operators. They will also help the Government by improving the collection of the entertainment tax and the service tax imposed on cable operators. Finally, despite the initial investment on set-top-boxes, the CAS protects the consumer from arbitrary increases in cable subscription rates. It empowers the consumer to cough up only for those pay channels he or she wishes to watch. In the long run, the introduction of a regulated cable TV system is also bound to widen the choice for consumers as a number of premium pay channels are reportedly waiting in the wings for the introduction of CAS.

Under the existing system, broadcasters frequently charge cable operators with under-reporting the number of subscribers — a problem that the CAS directly addresses. Ironically, a section of broadcasters who run pay channels are now worried that the new system will expose their true viewership. Households may simply be unwilling to pay for certain pay channels, which in turn would mean much lower advertising revenues. It is possible that under CAS, some pay channels — at least relatively less popular entertainment channels — may be forced to return to the free-to-air mode in order to survive. As things stand, after having either paid for or leased the set-top-boxes, the consumer may find he saves some money. The Government has mandated that cable operators under CAS must offer a basic bouquet of at least 30 free channels for a moderate Rs. 72 per month. Add-ons will cost more but the pricing structure clearly invalidates fears that CAS will somehow cast a huge financial burden on the Indian couch potato.

For various reasons, it is impossible for India to catapult immediately into the Direct-To-Home (DTH) regime and it would appear that CAS is a phase, if only a possibly intermediary one, that it would have to inevitably go through. However, with politics getting into the act, there are now doubts whether the new system will be in place before mid-July as scheduled. Politicians in Delhi, where elections are slated later this month, have been at the forefront of opposing CAS, with one eye on the vote bank and the other jaundiced by the misperception that the system is anti-consumer. The BJP leader, Madan Lal Khurana, has actually claimed to have received an assurance from the Prime Minister, Atal Behari Vajpayee, that the implementation of CAS will be postponed and although there has been no official word on deferment, there are doubts now about whether it will be implemented in mid-July and whether this will be done without further changes. A combination of populist politics and vested interests has resulted in distorting some basic truths about the advantages of CAS and raising some needless fears about its implementation.

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