Discussions over Tea (Of course, cutting maar ke)

Tuesday, January 06, 2004

SOCIETY: Why should only Ravi Shankar quit?

Jivha claims in his latest piece against CAS, that the Information & Broadcasting Minister Ravi Shankar is solely responsible for the fiasco that is CAS. The reasons he provides are compelling from a consumer's point of view. Any aggrieved reader would instantaneously have to agree with his lashing.

But if you take a closer look at the points he makes they are open to some debate.

Per Jivha, the cable industry was "going along fine" until Ravi Shankar intervened with his insane piece of legislation. But was that really the case? From a consumer point of view, sure it was. Why did the consumer care as long as he/she didn't have to shell out the right price for watching their favourite channels? So what if your MSO was hiding the true number of cable connections from the channel operator? So what if your channel operator was spending tons of money trying to encrypt his signals and get some sense of parity in the number of connections he was actually providing and the number of connections he was getting paid for by the MSO? Of course the consumer could always complain that the channel operator could bear the losses since it was such a big corporation.

The point is - things weren't going all that fine.

Note: I don't say that the I&B Ministry wasn't responsible for any part in this fiasco. I'm just saying it played it's part by setting the ball rolling.

But an equal share of the responsibility also lies with the MSO and the channel providers who failed to do their part in ensuring whatever limited success could have been achieved by a CAS rollout. Here's how ...
  • The channel providers did not release any rates until the last moment when the government declared that there will not be any more postponements in the launch dates. The channel providers were the biggest gainers by this CAS rollout. They would have a better hold on the number of connections they provided, the popularity of channels and a way to ensure a relative maximisation of their profits. Unfortunately, the channel providers brought out their pricing simply on the basis of a mathematical maximization of profits formula (more popular channels were priced higher than less popular ones). They didn't consider the fact that people would consider prices too steep and might drop the channels from their boxes altogether. The channel providers should've brought in duplicate channel feeds - with and without advertisements - which would've given more options to the consumer to select from.

  • MSOs played a greater role in the fiasco. In most cities where CAS was being introduced, the MSOs exist in a monopoly or a duopoly. Unfortunately these aren't run as companies but as organizations intended to squeeze as much profits out of the deals without ethical considerations. MSOs could have gotten a firmer grip on demand of STBs before the launch date. MSOs could've collaborated with the channel providers in setting the prices of channels, in collusion with a regulatory authority, because they are the ones who have got a finger on the consumer's financial pulse.

Finally, the role of a minister is not that of a regulator. He should have appointed a regulator in the first place, as he has done in post-haste, who would lay down the guidelines, setup prices for the channels and bouquets and act as an intermediary between the MSOs and the channel operators.

So let them share the blame. And share some of the burden with ourselves, the consumer too. We weren't only the victims. And neither should Ravi Shankar be the only one.

End of Post

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