NEW DELHI: A suitable CASe for deferment seems to have been drummed up.
The Indian government has seemingly blinked first. After maintaining all these days there would be no deferment, the government is now expected to announce that implementation of conditional access system (CAS) in the four metros would go into effect from 1 September. It is only then the area-wise rollout of South Mumbai, South Delhi, the whole of Chennai and the whole of Kolkata will supposedly see the full blackout of pay channels not delivered through a set top box. We say supposedly because between now and then, what other political and other factors come into play only time will tell.
Pointing out that a "formal announcement" by the government would be made in a couple of days time, India's information and broadcasting minister Ravi Shankar Prasad today told journalists after a meeting at the PMO with broadcasters and MSOs, "One common conclusion is that they'll (the industry) undertake to educate people on CAS from 15 July to 31 August."
The government is also expected to come out with a notification to include satellite towns like Noida and Gurgaon near Delhi and Thane and Navi Mumbai on the outskirts of Mumbai municipal area.
In a move the broadcasting companies say will cost them over Rs 1 billion in lost revenues, there is also a proposal being finalised by the government, that pay channels would be asked to waive subscription fee in the four metros during the month of August to help the consumers buy set-top boxes for the migration.
What may give rise another round of controversy, the consumers in the cities of Delhi, Kolkata, Chennai and Mumbai, where CAS as sought to be implemented in the first phase, will be charged only Rs 72 (exclusive of taxes) for the free-to-air and pay channels for the month of August.
The rest of the country will continue to pay the existing prices for the channels and their cable service.
According to Prasad, all information on the availability of set-top boxes would have to be made available to the government latest by 1 September.
Though the Indian broadcasters like SAB TV, Aaj Tak and Sahara TV denounced the "arm-twisting tactics" of foreign (including Subhash Chandra's Zee telefilms) broadcasters keen on deferment of CAS rollout, the pay broadcasters welcomed the move.
Zee Telefilms additional vice-chairman Jawahar Goel told indiantelevision.com, "The proposal is a good one for subscribers as there would be no blackouts of pay channels post 15 July."
Similar sentiments were also echoed by SET India CEO Kunal Dasgupta who said that the time gained ought to be spent fruitfully on properly seeding the market with boxes.
BROADCASTERS' RIDER
While the pay channels are likely to agree to the waiver of charging subscription revenue of pay channels from the cable fraternity, including the MSOs, they have petitioned the government to put in riders to safeguard their interests.
The rider being the MSOs should clear all dues of broadcasters by July-end and come clean with their subscriber base; otherwise broadcasters should have the right to switch off pay channels to MSOs and cable operators without any interference from the government on this issue.
According to a Star India executive, We expect all MSOs to clear our dues by 30 July. We also expect that MSOs in CAS-enabled zones would have internationally recognised subscriber management system and transparent pricing mechanism."
Zee's Goel said that it would be in the interest of all to have a transparent system where the distributor's margin would also be in the region of 40-45 per cent.
But MSOs are playing it cautiously. Contacted by indiantelevision.com, HTMT's Ashok Mansukhani withheld comment on the broadcasters' rider saying, "He had yet to be informed about in formally and would reserve his comments till then."
CONSENSUS FORMULA AFTER MARATHON MEETING
Broadcasters have been lobbying hard in the last few weeks for such a deferment citing the non-availability of set-top boxes in the country as the reason. Several of them feared a total blackout of their channels in the CAS regime with not enough boxes in the market. The proposed extension in the deadline, broadcasters hope, will help in the boxes being readily available.
The consensus formula was worked out in a seven-hour long meeting today between broadcasters, cable companies and Sudheendra Kulkarni, additional secretary in the Prime Minister's Office and the media advisor to information and broadcasting minister Prasad.
As per the agreement, the government will also direct the broadcasting companies to come out with a revised price list which would be applicable during the CAS regime, which, according to Zee's Goel, should not be a problem as most broadcasters have informally arrived at a consensus on a "super bouquet type of formula."
In addition, channels and the cable network companies have been asked to go on a full-scale education and demystification campaign on CAS starting from 15 July.
While giving some breathing space to the broadcasters, today's solution does not touch upon the contentious issue of the margins that the broadcasters would pay the cable network companies.
Cable companies have been demanding a 60 per cent margin on the pay channel prices, while the broadcasters are ready to pay between 15-25 per cent as the margin to the cable companies.
The bickering between the two parties too, had cast its shadow over the CAS rollout. "It is a business issue between the broadcasters and the cable network companies. They would have to decide on it independently," an information and broadcasting ministry official said philosophically.