Your cable guy may charge more

NEW DELHI: Consumers across the country will witness a significant increase in their monthly cable TV bills if major broadcasters and multi-system-operators have their way. All major broadcasters including Time Warner, BBC, ESPN, STAR, Zee, SET, Walt Disney along with leading MSOs have approached telecom regulator Trai seeking that existing cable TV tariffs in non-CAS areas (which includes the whole of India except select areas in the four metros) be revised. Cable TV tariffs in India have been frozen at January 2005 rates.

Even as almost all players in the broadcasting sector have supported the move to increase cable TV tariffs, local cable operators represented by the Cable Operators Federation of India, consumer groups and some industry bodies such as Hotel and Restaurant Association have opposed it, and have demanded the existing tariff regime be continued.

The regulator will consider the demands made by broadcasters as it is currently taking a relook at the Cable TV tariff structure in India. The current tariff regime has been in place for over two-and-a-half years now. Trai is expected to take a final call on revising Cable TV tariffs by next month.

These broadcasters have said that the existing price cap was intended to be a temporary measure and since more than three years have elapsed since its imposition, market forces should determine tariffs in the future.

They have also rejected an alternate proposal, where Trai had suggested the current regime could be replaced by another structure which lays down an overall specific ceiling for monthly cable bill for the end consumers. “Rather than Trai fixing the ceiling cable operators, MSOs and broadcasters should decide the price, leaving it for the consumer to influence the market by exercising his choice,” the BBC said.

“The fairest, most straightforward, transparent and effective solution is to remove the price freeze and to let the market forces of competition, which now exist (thanks to the introduction of a range of DTH service) to regulate cost, supply and demand,” Time Warner said.

According to STAR, if Trai is unable to lift the price freeze immediately, it must clearly lay down the conditions upon it will be lifted. “The conditions could be that as soon as DTH reaches a threshold limit of 10% of the cable and satellite households, the price regulation would be lifted, or it could be as soon as IPTV launches in a given territory, the price freeze would be withdrawn, given that packaged services would be offered by the operators. Trai can also look at the benchmarks used by FCC in the US in determining the existence of competition as a point of reference,” STAR said.

Justifying its demand for lifting the tariff freeze, ESPN has said that since sports broadcasters cost of acquisition of rights has seen a steep rise, tariff freeze in present form would be devastating for sports broadcasters. In fact, sports broadcasters have already been made to suffer huge losses on account of The Sports Broadcasting Signals (mandatory Sharing with Prasar Bharti) Ordinance 2007, and the authority should continue to devote energy in devising solutions to further increase competition among cable operators, ESPN added.