About Amba

In my final year of law school, I am six months away from completing my undergraduate education at the National University of Juridical Sciences, Kolkata. Research Interests: Media policy, e-governance, privacy, internet governance.

News: PIL against Social Networking sites in the Delhi HC

Social networking sites are under judicial scrutiny: A PIL has been filed in the Delhi High Court against different social networking websites. The petition scrutinizes the income generated by these sites and the taxation of the same. Among other things, it seeks a direction that such websites should not “do agreements” with individuals under the age of 13, and that government officers do “not use social networking websites through office computers” as this would pose a potential data threat.

The matter is listed for April 9, 2013. Watch this space.

Source: http://www.barandbench.com/brief/2/3221/social-networking-sites-under-judicial-scrutiny-again-delhi-high-court-seeks-response-in-pil-on-their-tax-returns

Analogue Sunset: Will It Be the Dawn of Consumer Choice?

By the end of October this year analog television sets will go black. First, the four metropolitan cities of Delhi, Mumbai, Chennai and Kolkata, and eventually throughout India, by the end of 2014. In all, a whopping 88 million households across India are to be equipped with Set Top Boxes (STBs). (For a sense of scale, by mid-August this year, less than 35 % of the total television households in the metros alone had been seeded with STBs.) News reports cite sluggish consumer demand, and the lack of on-the-ground clarity as its main reason. The move has been publicized as a revolution in consumer choice, a claim I will analyze in this post. I will critically examine the social costs associated with this transition.

The Cable Television Networks (Regulation) Amendment Bill was passed in December, 2011. It enables the implementation of a “digitally addressable system” (DAS) for the reason that digitally compressed channels consume less bandwidth and thereby address capacity constraints. While the publicity for the move focuses on the consumer being king, in reality there are several stakeholders involved in the cable food-chain. There are the broadcasters who manufacture content, multi system operators (MSOs, like Hathway, Digicable etc) who download signals from the Broadcasters and feed them either to your local cable operators (LCOs) or directly to the end-viewers. Other delivery platforms include Direct to Home (such as Tata Sky), IPTV and Doordarshan and its digital platform, DD Direct. For the purpose of revenue sharing, currently LCOs are meant to report the number of subscribers for which they provide last-mile access to MSOs. MSOs in turn, are mandated to furnish lists of LCOs along with their subscriber base to the broadcasters on a monthly basis. It is argued that the non-addressablenature of analogue cable makes it impossible to arrive at the actual subscriber base and therefore, incentivises under-reporting by LCOs. Industry estimates are that LCOs declare only around 15% of their subscriber base to MSOs and broadcasters. For broadcasters, who seek to gain enhanced subscription revenue, this under-reporting has been a constant source of misery. Digitalization would bring full addressability (every STB has a unique address), and thereby tackle under-reporting as well as give MSOs more bargaining power by linking them directly to subscribers

Left in the dark

The beneficiaries of digitalization may be many, but publicity has promoted consumers as the biggest winners. Consumer choice is consistently being described solely in terms of sharper picture quality, more channels than you could ask for, the ability to record your favourite shows and use digital cable connection to make calls and browse the internet. This discourse is disturbing in that it ignores the fact that due to this switch those households who cannot afford investment in STBs are doomed to go black with the analogue sunset on October 30th. Households must decide whether they can afford to pay more for this service (the average cost for installing a STB alone is Rs.1000-Rs.1200). The choice is between having access to a critical medium of communication, or not at all. Unlike the Conditional Access System (CAS), introduced in certain areas in 2006, which allowed free-to-air channels to continue on analogue, under the DAS both pay and free-to-air channels will have to be wired through set top boxes.

The digital switch-over is taking place all over the world, and it is useful to look to the process and principles formulated in other jurisdictions.  Instead of a harsh or sudden cessation of analogue television, Europe favoured a “fade to black” approach. This was to be done on a rolling basis based on market demand for switching to digital. The European Commission (EC) published a “Communication on the transition from analogue to digital broadcasting”. The EC suggested certain elements be a part of member-state analogue switch-off plans. Firstly, it advised that the switch-off process should be a “market led process, not a simple infrastructure change with no added value for citizens”. Second, that it should “transparent, justified, proportionate and timely”, and finally that the process should be “non-discriminatory, technologically neutral” and should occur only when “digital broadcasting has achieved almost universal penetration” in order to minimize social cost. Accessibility to all sections of society has been integral to the process in the United States as well, where a subsidy-coupon system was established by the Digital Television Transition and Public Safety Act of 2005 for families dependent on analogue cable and unable to afford the switch. Consumer unions in the US argue that a transition without an adequate set top box financial assistance programme forces consumers to expend their own resources for a transition that they didn’t demand to begin with. In fact, discourse in these countries on the analogue switch off often turned on the right to freedom of speech and expression. Inability to ensure accessibility of this new technology to all was viewed as a violation of the First Amendment.  The idea that a change in technology should necessarily be market driven has inspired countries to implement incentives for consumers. For example, in the U.K, Freeview is a free package of digital programming that was available to convince consumers to switch.

These reflect a process of persuasion, rather than compulsion and if anything, these principles are even more crucial in the Indian context. Unlike Europe and the US, where digital cable had almost achieved universal penetration when the switch was effected, a majority of households in India metro’s alone are analogue dependent. The percentage of households with set top boxes in Delhi, Mumbai, Kolkata and Chennai currently vary between 12 and 38%. A “market led process” as described in the EC directives would ensure that the demand for this change in technology is organic and originating from consumers rather than a deadline oriented process consumers are not prepared for. In the absence of a financial assistance or subsidy programme, the urban poor in these cities lack resources to effect this technology switch. In an interview to The Hoot, the Principal Adviser (Broadcasting & Cable Services) to the Telecom Regulatory Authority of India (TRAI, the assigned regulator for broadcasting), feebly mentioned that TRAI would be providing STBs on lease and rent at prices that anybody could avail. But he also conceded that there is no public information about this scheme. The Minister for Information & Broadcasting has made equally vague promises to reduce the cost of STBs in the future.

It isn’t just the consumers, but the other players in the market too are equally unprepared. Suppliers are struggling to provide STBs to meet whatever demand has been created. Most of the demand is being met by imports from China, rather than local manufacturers. Other countries like Brazil, Russia and South Korea are undergoing the same switch, and importing from the same Chinese suppliers. In this background, even if manufacturing capacity is not a constraint, delays are inevitable. LCOs have a vested interest in continuing on the analogue system as close to the deadline as possible. In the absence of adequate information, even consumers equipped to make the change are likely to be left in the dark. The LCOs face acute threat to their livelihoods with the prospect of gradual redundancy. In the interview to the Hoot, the Principle Advisor to TRAI advised to look to the future, where everyone will benefit from more capacity, and apparently LCOs will emerge as MSOs or broadband providers. Skepticism to the switch is compared to the “psychosis” created when computers came into India: eventually fears of retrenchment will give way to more opportunities. This response gravely understates the harshness of a transition with a final deadline, and over-estimates the ability of LCOs to break into the MSO market independently.

Adoption of this new technology may be necessary and inevitable, but one can’t help but question what the hurry is about. This transition should ideally happen over time as it becomes affordable and attractive to consumers. Instead of a campaign to incentivise it or ensure accessibility to all, a mandatory switch-off riding on the banner of consumer choice has been preferred. In a subsequent post, I will examine the consumer’s choice of channels under the digital paradigm as per the very recent TRAI Guidelines. Consumer activism on the switch is largely absent in India, and this may be blamed in part on the superficial information they armed with. The need of the hour is to question whether these digital set top boxes will in fact bring freedom into consumer homes.

Image from here.