Cable TV Conundrum

Cable TV Conundrum :
Monopoly sends customer to face blacked-out tv screens in contravention of TRAI regulation.

By Debkumar Bhadra

As far as delivery of services in these islands are concerned, it is no secret that customers had been getting a raw deal since choice in almost cent per cent cases is limited to single operator/service provider. Be it Telecom, Internet, LPG, POL or Cable TV Networks “take it or leave it” is the regime that is in vogue in this monopolistic region.

In a bid to dismantle the status quo in the broadcasting and cable service sector, the regulatory body Telecom Regulatory Authority of India (TRAI) way back in March 2017, mandated compulsory switchover from analog to digitally addressable systems (DAS) for cable networks. However, finding that the stated objectives viz transparency and real choice to consumers, weren’t met, TRAI initiated a comprehensive review of the entire framework and came up with a completely new tariff regime effective from 1st February, 2019. Though efficacy of the initiative to address the monopoly issue is debatable, yet it can be said that with implementation of new tariff order, there would be transparency in pricing and control on choice of channels on DTH/Cable TV Networks will now be in the hands of the consumer.
As of now subscribers were charged a lumpsum monthly fee for a bundled bouquet of about 400 channels; majority of which were neither asked-for nor ever watched, yet they were there and paid for since customer had nothing but Hobson’s choice. With the new tariff regime, TRAI strives to set the consumers free from the shackles and give subscribers the freedom to choose channels one wish to watch and pay accordingly.

The new tariff regime has two components the Network Capacity Fee (NCF) which is like rental and the other component is price of the pay channel. A customer however will have to subscribe minimum 100 channels wherein 25 Doordarshan (DD) channels are mandatory. Remaining 75 slots could be filled up either by Free to Air (FTA) and or pay channels (SD or HD) in any combination.

The NCF payable for the first 100 channels (also called as Base Pack) has been fixed at Rs 130/- plus GST. For every additional 25 channels (over and above the first 100 channels), subscriber is required to pay additional NCF of Rs 20/- plus GST. For reckoning additional NCF, each HD channel is counted as 2 SD. The final bill therefore would contain NCF + GST @ 18% on NCF + Pay channel charges if any.
I am taking up a few hypothetical situations, which will help readers understand the new tariff regime. Consider a scenario where the customer selects 100 Free to Air (FTA) channels (25 DD + 75 FTA) in other words he does not subscribe to any pay channel. According to the new tariff order, such customer need to pay NCF of Rs 130.00 + GST of  Rs 23.00 which adds up to Rs 153.00 per month.

Similarly a customer may not take any of the free channels provided in the base pack and decides to select 25 DD, Bouquet of 45 SD channels @ Rs 95/- and 15 HD channels @ Rs 10/- each on A-la-Carte basis. Such customer will be required to pay NCF of Rs 153.00 + Bouquet charge of Rs 95.00 + A-la-Carte charges of Rs 150.00 adding up to Rs 398.00 for a month. Here one need to remember since pay channels are sold on MRP, which by definition is inclusive of all taxes including GST. Hence one should insist GST be computed on NCF component alone.

There could be other scenarios, say for instance a customer selects 105 channels comprising both FTA and pay channels. 25 DD + 50 FTA + 30 SD pay channels @ Rs 2/- each. Such customers will be required to pay NCF of Rs 130.00 + additional NCF of Rs 20.00 adding up to Rs 150.00 + Rs 27.00 GST. In addition, the customer would be billed for pay channel charges (30 SD channels @ Rs 2/- each). The total cost thus would be NCF of Rs 150.00 + Rs 27.00 GST + Rs 60.00 pay channel taking the total to Rs 237.00 a month.

Similarly say a customer selects 150 channels comprising 75 FTA, a Bouquet of 10 SD pay channel @ Rs 49/- plus 20 SD channels @ Rs 2/- each and 10 HD channels @ Rs 10/- each on A-la-Carte. In such a scenario, the customer will be charged NCF of Rs 170.00 + Rs 30.60 GST + Rs 49.00 Bouquet charges + Rs 40.00 for SD + Rs 100.00 for HD channels on A-la-Carte. Thus the bill amount will be Rs 390/- a month.

One may ask, whether the cable tv bill would be lesser than currently in vogue? Well answer to this question cannot be a definite Yes or No since bill amount would depend on individual’s choice. Customers who consciously select only those channels they regularly watch, the monthly bill for such customers is certainly going to see a decline. However those who continue with bulk subscription, wherein they subscribe to say 400 channels but watch only 25-30 of them, reduction in cable tv bill is going to be elusive.

Further since the price regime is completely new, initial hiccups are expected both at the customer as well as MSO/LCO side. In my case, I tried to reason with my LCO on giving me choice to select the first 100 (leaving 25 mandatory DD) channels. He declined saying it being Base Pack, the listed 100 FTA channels cannot be changed or replaced. There were quite a few other points but finding the LCO not fully aware of the new tariff order, I handed over my signed form without any argument. Thereafter I spoke to Mr Ashwin Dinakaran representing Mr G Dhinakaran of Andaman Cable Network (ACN) the lone Multi System Operator (MSO) in South Andaman. I am sharing gist of the discussion with the view to give readers a better understanding of the issue.

Contrary to expectation, the representative was quite forthcoming and out rightly said they are fully aware of all the provisions and don’t contest any part of the tariff order. When informed that despite filling the form well on time, how is that I am facing blackout of pay channels? Ashwin agreed blackout should not have taken place but it happened since ACN is not getting support from broadcasters end. He added there are 65000 connections which are to be individually handled. It is a huge time consuming task and referred to a meeting wherein the licencing authority is said to have allowed ACN time till 1st May, to complete the migration process.

Hearing this, the next logical question that came to my mind is who is going to bear the cable tv bill till such time those STB’s/cable TV connections are made compliant to new tariff order? Ashwin said, till a customer’s STB is activated with new tariff, only FTA channels are provided hence customer need not pay anything other than NCF of Rs 153.00 for that period.

When pointed out that my LCO is insisting the first 100 channels in Base Pack is fixed whereas TRAI regulation says except 25 DD channels, consumer is free to choose remaining 75 channels. He made it clear that ACN will give customers freedom to choose channels in the Base Pack also.

One aspect Ashwin argued and remained un-convinced by my submission was levy of GST on pay channel charges. When pointed out that the terminology used with reference to pay channel charges in TRAI’s order is MRP which by definition is inclusive of all taxes including GST, he agreed to the definition of MRP, but declined to accept pay channel charges are inclusive of taxes. Thus through this post I urge the concerned authorities to intervene so as to protect consumers (MSO included) from payment of GST on MRP. At the same time I urge ACN to go by the definition of MRP and compute GST on NCF component only.

Ideally customer expect its interest would be protected, atleast TRAI thought that way. Contrarily, ACN/MSO holding its commercial interests paramount pushed customers to face blacked-out tv screens. Had it not been enjoying monopoly in the entire South Andaman region, what would have been the situation is anybody’s guess. However since blackout has already happened, all a captive customer like me can do is request the MSO to speed up the process so that migration formalities could be completed within the agreed revised deadline.

The new tariff order strives to bring full transparency in pricing and gives customers complete control on the choice of channels one wish to subscribe and pay accordingly. The onus therefore is upon us. We need to make ourselves aware of the new tariff regime, exercise our options cautiously and reap the benefits. Rest, am optimistic that ACN would walk the talk.
This post was carried in the Port Blair edition of Echo of India dated 07/02/2019
This post was carried in Andaman Sheekha dated 08/02/2019
This post was carried in The Island Reflector dated 09/02/2019

Excerpts from this post was carried in The Phoenix Post dated 13/02/2019

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