Set Top Boxes: State-Corporate Nexus (Again)

When I came across this headline over my morning coffee, “Set-top boxes a must from July for greater choice“, I was very excited.  More choices always make my little heart beat very hard.

So this is the deal:

Starting July, every household in Delhi will need a set-top box to be able to view channels of one’s liking. The information and broadcasting ministry is planning to implement a ‘must-provide clause’ for cable operators to enable TV viewers in the four Metro cities to ask for their favourite channels as a right. After July 1, the sub-divisional magistrates across Delhi will take action against all cable operators who are found violating the new norms, which mandate provision of set-top box enabled digital facilities to all viewers.

Hold on, so I can no longer go with the local cable operator who already provides me with all the channels I want legally, at a very low cost, but will be forced to pay larger amounts directly to the big companies (Tata, Reliance)?

This is more choice?

An I&B ministry official told the media

At present, the analog cables can transmit a limited number of channels. Therefore, the local cable operator has to select which channels to provide and the consumer is left with no choice. After digitization, consumers will be able to pick and choose channels through a settop box (STB). They will pay money only for the channels they have chosen.

All lies. At the moment I can get any channel I want, and pay the same fixed amount, while with the big companies I will be forced to pay separately for separate “bouquets” called Southern Delight or whatever, paying for Telugu, Tamil and Kannada even if I only want Malayalam.

Nothing so sweet smelling as the restriction of choice…

The question I have is – why is the Parliament of this country, which does not have the time or inclination to pass or even decently debate the Lokpal Bill or the Women’s Reservations Bill, or to sit down and discuss the utter irrelevance of colonial penal provisions such as Section 377, why is this parliament so efficiently moving to pass a law to force people to use set top boxes?

So then I turned to that organ of the Indian communists, The Financial Express, which told me that

In less than 11-months, no consumer of cable television in Delhi, Mumbai, Kolkata and Chennai will be able to watch the services without a set-top box (STB). The STB will also become mandatory for all the 100 million-plus cable and satellite subscribers in India by 2014. This means, the monthly cable bills of the subscribers will shoot-up though the quality of service is expected to become world-class.

Thou shalt have world-class service if thou canst afford it.

And if you can’t afford it, you can’t have cable television at all.

Adding to the communist propaganda, it went on to say:

While a switch-over from analogue cable (copper-wire cable) to complete digitalisation (via STB, fiber-optic cables and digital backend) has been a long-standing demand from the large cable operators, the move will become a bane for small-time, city-based local operators, experts said.

(Not a communist paper, you say? Oops. My mistake.)

This legislation is essentially the government acting with alacrity in the  interests of monopoly capital, using the might of the state (“will take action”) to eliminate competition in the  cable television market. Why, I ask myself, must the move from a lower to a higher technology be legislated by the state in a non-life saving situation? I understand that corporations will continually phase out technologies in order to make us pay more for “upgraded” technologies, leaving us with no choice. So even if I want to stick to Windows 2003,  I will have to keep upgrading to higher and higher versions. But then, it’s up to me to shift to Linux or whatever.  And that’s what I expect from a corporation – the going after higher and higher profits. But here it’s as if the government passed a law that made Microsoft’s profits easier, by outlawing all earlier versions of Windows.

The government has mandated that I must perforce shift to the “world-class” technology.

The Conditional Access System, the slick consumer-friendly name (consumer- bamboozling, more like it) for the set top box regime, was introduced in 2003 in Delhi and Mumbai but it did not eliminate local cable  operators. Eight years later, when the market failed to ensure on its own, the transition to set-top boxes on a large enough scale (i.e. people continue to prefer the local cable operators), the state steps in to help out the big cable companies.

And then I found that similar legislation mandating the shift from analog to digital television broadcast had been enacted in the USA in 2009 and in the Philippines in 2010.

Oh – is that what they meant by world-class? Walking the walk of global monopoly capital?

41 thoughts on “Set Top Boxes: State-Corporate Nexus (Again)”

  1. This issue was on my mind just today morning. What about people who have slightly older television sets incompatible with STBs? Their TVs will now be rendered obsolete!

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  2. A friend told me about two years ago that his company which imports set top boxes has been aggressively lobbying the government to introduce this system. Their efforts seem to have paid off, as always.

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    1. Interesting information, Neeraj. Of course, “aggressive lobbying” is not only about rational arguments but much more material persuasive measures, as we know!

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  3. Actually it is a good thing in my opinion. We have lived without a TV for 12 years now in the US, and from what I have seen, the TV channels broadcast even more idiotic stuff in India. Indian companies and the government may be a little late to this con job, because a lot of content is now available online anyway.

    -Ravi

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  4. My goodness. Biased much?

    Firstly, you simply assume that digital TV = more expensive. Without citing a shred of evidence.

    Secondly, you can get all the channels you want from your local cable operator? If you’re a Punjabi living in Chennai, your local cable operator will give you Punjabi music and entertainment channels?

    Thirdly, you do realize that your local cable operator has a de facto monopoly over the area served by him/her? And I trust you recognize that competition is better than monopoly?

    Under digitization, you will have a choice of operator, which you currently don’t. True, there are fewer DTH operators than there are cable operators, but the important thing is you have access to only one cable operator, but multiple DTH operators. They will fight for your custom.

    Regarding prices, see http://www.mediapro.net.in/rate-card-pdf/DTH-Rate-Card.pdf and add up the prices of all the channels that you regularly watch. Then tell me you pay less than that. Moreover, digital broadcasting is an industry characterized by high up front costs, but low marginal costs. This means that it costs a lot to set up the basic infrastructure, but once that is done, an additional consumer can be served at a very low cost. Which in turn means that the more customers a provider serves, the lower the average cost per consumer is. And a lowering of average costs eventually means a lower price, given that monopoly would not exist anymore.

    Also, this is more choice. Right now you pay for everything. That is the only option you have. At least after digitization you will have some options. And it is foolhardy on your part to simply assume that the corporates will give you whatever bouquets that suit them. When providers compete for your custom, they have an incentive to tailor their offerings as best they can toward what the market wants. Look at the number of products in the mobile telephone market to see what I mean.

    And lastly, the fact that the government is mandating it follows simple logic. Beaming content in both digital and analogue format costs a LOT more than beaming it in just one format. Further, digitization will give us a ‘digital dividend’ in the form of all the spectrum that will be freed up once analogue transmission is stopped. See http://en.wikipedia.org/wiki/Digital_dividend_after_digital_television_transition.

    The extent to which other countries’ policies can be models for ours is often underestimated, in my opinion. Instead of being so skeptical and coming out with knee-jerk reactions, it might be better to do some proper research into the costs and benefits of digitization, and whether the arguments for and against are affected by the fact that we are a different country. I’d like to see some well reasoned analysis, not rhetoric just for the sake of it.

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    1. Oh I get it. The corporate AND government are both thinking about only one thing – the good of the consumer. Hmm. It seems you have a little bit of a reading issue, Saattvic. Nivedita’s article cites reports in mainstream, pro-capital newspapers including the Financial Express that concede that costs will in all likelihood rise for the consumer. That’s a little more than a ‘shred’ of evidence. Ok, let’s assume the monopoly of the local cable guy is replaced by the ‘free competition’ of the cable multinationals, which initially offers attractive tariffs to the consumer. What if they decide, over an amicable meeting, to collectively raise their costs? Of course, they will always figure out some way to undercut each other, but what is to stop them from jointly pushing prices up steadily over the next few years? And since stockholder dividends or CEO salaries are things that most people either don’t understand or don’t have access to, how will we argue when these big boys say they need to raise tariffs to cover operating costs? With the local cable guy you have face-to-face contact, which at least gives you the satisfaction of yelling at him. With big companies you have the ubiquitous and insanely frustrating call centre IVR. And by the way, before the big companies started coming in, there were multiple local cable operators in most areas, so it wasn’t quite a monopoly. If the government wanted to regulate these to ensure consumer satisfaction, it could have, and did, to a limited extent. It’s just that now the game’s a lot bigger, the opportunities for profit and rent-seeking and corruption are bigger all round. About spectrum, your belief that it will go to the highest bidder in an open auction is touching, given the experience of 2G. Speaking of which, I’m a little tired of the mobile phone example. So we have reasonably successful competition in the mobiles market (leaving aside the 2G embarrassment). That negates the experience of other sectors, in which bringing in private players has led to rising consumer costs? Electricity? Water? Public transport? Internet? We’ll see what is rhetoric and what is fact in a couple of years, when the brave new world of digitised cable has taken over.

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      1. Electricity, Water and Public transport are subsidized services (by the government) in India. It is no wonder that privatization has increased its cost. Internet cost has definitely reduced with privatization. Further, service delivery of electricity has definitely improved with privatization. In small towns in India, we still have 10-12 hours of power cuts. Even in metro cities like Hyderabad have 3-4 hours of power cuts.

        As far as I recollect, there were multiple cable operators in my area in the early 1990’s after which it became a monopoly of a single player. There might be 100’s of cable operators in India but in a particular area is generally serviced by only one. Further, these cable operators in my own personnel experience are notorious for not under-reporting subscriptions, bad quality of service and illegal use of electric and telephone poles.

        If all cable operators come together to decide to increase prices, it is a called cartel and legal action can be taken against them.

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    2. I love your comment Saattvic, for the tone of innocence with which it defends crony capitalism. Don’t Google, just get out and check with a cable operator and then with a set-top box company to see what costs more. And supposing cable actually costs more, and presuming that digital-only will bring prices down more and will be cheaper than allowing both – none of that still explains the rationale of banning analog. That’s not what a ‘free’ market does.

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      1. Sunalini, Shivam. If you were to look beyond blind hatred for what you call ‘crony capitalism’, and start talking logic, we can have a discussion.

        1. As the dear dark lord pointed out, electricity, water, etc used to be subsidized. Moreover, the electricity price increase might have a bit to do with the increase in prices of coal over the last 10 years as well.

        2. As the dear dark lord also pointed out, if four digital operators sit in a room and agree to bump up prices, they will have committed a crime under the Competition Act (2002), which allows the Competition Commission of India to impose penalties for cartelisation. The penalties currently stand at 3 times the profit made or 10% of turnover, whichever is higher.

        3. The passages from the FT cited by Nivedita do not contain any analysis. They are statements. Assertions. Just because someone else says it doesn’t make it a shred of evidence. I’ll tell you what… try citing an FT article in a court of law and see whether it gets accepted as evidence.

        4. Shivam, I did check. There’s a reason my house has DTH and not cable.

        5. Shivam, read my response again. The rationale for phasing out analogue is (i) ‘digital dividend’ and (ii) the fact that is costs more to beam the same content by two methods (analogue and digital) than by one.

        6. As much as it may hurt you to know, I am no supporter of ‘crony capitalism’. I don’t even know what that means. I’m a supporter of logically reasoned economic analysis. I don’t know what your idea of a ‘free’ market is, but I hope you realize that free markets often fail in the presence of externalities. Seriously Shivam, read up on externalities. I’m no fan of government intervention at all. But there’s never any absolutes in the real world, and there are some circumstances where government intervention can and does improve things.

        7. The corporate is not thinking about the good of the comsumer. The corporate is thinking about profits. I don’t know whether you realize this or not, but in order to make profits, you have to attract customers. In order to attract customers you have to give them a reason to choose you. And to get them to choose you, you have to tailor your offerings according to what the market desires. Its simple really, you supply that for which there is most demand. Its common business sense. You dont need to assume some crazy philanthropic desire on the part of corporates to see that.

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  5. A simple solution is already at hand: Stop watching TeeVee.

    You had enough of that poison already. It is well proved that TeeVee kills your brain cells; even the occasional exposure has serious emotional and nervous hazards for a sane person.

    Also the bit “Linux or whatever” is very objectionable. Complaints about governments helping M$ Corporation, and complaints about M$ Corporation’s proprietory greed, point nowhere except to their enhanced parasitism and your helplessness, even within the limits of your example.

    Linux is freedom from corporate greed and state control; it is based on the highest ideals known to humankind: freedom of choice, and mutual help. It is not “whatever.” And by the way, most of the latest Linux distros run successfully on 98 and 2003 PCs. Some like Linux Mint will help you make the transition effortlessly; there are others like Puppy Linux that boot on a 4gb USB stick without using your computer’s CPU.

    Saying that, set-top boxes and impending proletarianization of poor cabblewallahs is of greater concern to those who live in their boxes and cables. Try stepping out of those. For there are more important issues at hand deserving attention. And also the books that you always wanted to read, but never could find time to read…

    Peace,

    MM

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    1. MM, I don’t have TeeVee and I use Linux. Both have worked very well for me. Doesn’t stop me from being interested in, and commenting critically on developments which have large-scale economic, social and political implications. Have you been to a working class home recently? Do you have any idea how important TeeVee is in the lives of those who have to make do with 12 and a half square feet of built-up area (government mandated size of slum houses) and no parks for their children to play in?

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  6. I tend to agree with Ravi. A world without TV for the common man, and even the lower middle class, might lessen the threat to our social life. People might visit each other more frequently and may discuss issues of common interest. Gender activists should have a sigh of relief the sexists soaps may have lesser number of viewers. After all dear Manmohan and his colleaues think of the Aam Admi
    Apurba K Baruah

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  7. my cable-wallah in santa cruz mumbai has provided me with a set-top box. and he is a small guy not tata or dish. his man provides service in case something goes wrong and comes to collect the subscription amount.

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  8. Shama, this is how it goes: local cable operators are normally multi system operators, companies which create and distribute channels through cable networks and then there are DTH operators (the big companies) who transmit their own bouquet of channels via satellites. Some of the former did give out set top boxes in the first phase of digitization (after 2003), but did not tie you to the big companies. This option will no longer exist once the new legislation is operational. But I have since learnt that at least one of the big companies (Dish) is tying up with neighbourhood cable operators to push Dish set-top boxes. While this is a respite in terms of livelihood for the local cable guys (who are going to be rendered jobless en masse), it does not do anything for the consumer who will have to pay the exorbitant rate the DTH companies will extract.
    To those who advocate or live in a world without TV, I do see the point of what you are saying, but to be forced to be without TV simply because you can no longer afford it is not a principled position against TV (which can only be taken by the likes of us, with our various alternative forms of entertainment, as Sunalini points out in her comment.)
    MM – why do you think I referred to Linux derisively? What is it about cyber debates that even when people are saying exactly what you are, they must pose it in this aggressive adversarial manner? I’m all for Linux – my point precisely was that we can opt out of spheres of corporate greed, but not out of the coercive ambit of the state.
    I think Saattvic’s rant that basically ignores the arguments I make to state his own vociferous defence of STB’s has been adequately addressed by Sunalini. Just one addition – the Punjabi in Chennai can choose to go with the local cable or DTH providers as she chooses. What’s your problem with that? You want local cable operators to be eliminated and only then can the Punjabi in Chennai really enjoy her bhangra rap? You dont even make simple sense in your haste to promote the monopoly of corporate cable companies.
    But one thing you say I do agree with – “I’d like to see some well reasoned analysis, not rhetoric just for the sake of it.” Practice what you preach, Saattvic.

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    1. Wait, I thought this discussion was about analogue being eliminated. If the local cable wallah can provide digital content, then there is absolutely no issue, is there? I firmly believe that analogue needs to be eliminated, for reasons I’ve elaborated on at length already.

      Also, what on earth do you mean by corporate monopolies? Please explain to me how these corporates can monopolise ANYTHING without contravening competition law.

      And re practicing what I preach, I think some mature reflection might convince you that I did precisely that. It seems you’ve taken this as some sort of personal affront. It isn’t. I disagree with your logic, your assertions and I think there are flaws in your argument. I have tried to point them out. I don’t profess to be right all the time, but I’m prepared to discuss things.

      If you want, I can give you some references – academic and otherwise – that deal with these issues conceptually. Things like why government after government is turning off analogue transmission. Things like why it makes sense for the government to intervene in situations involving externalities and public goods.

      I happen to be a professional economist, and I’ve worked in competition and regulation for all my professional career. I’ve worked for the private sector and for the public sector. I’m also as concerned an Indian as you are. If you want to seriously get into these issues, then some research is an excellent idea. And let me tell you, I’m very open to changing my mind if you can point me towards some research that contradicts anything I have said as well.

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  9. I would like to hear what is Nivedita’s response to Saattvic’s reference to the prices of channels (from the source given in the post) and the digital dividend that will be gained from transition to digitisation.

    I would like to add that the policy as envisaged by the government says it hopes to end the fight for more TRPs among channels to gain more advertisements with this legislation. This is because DTH viewing will enable the operators to have actual statistics about the viewership and popularity of different channels and programmes.

    Also, the law looks at the digitisation process in 4 phases. In Phase 1, all the 4 metros are covered. In Phase 2, all million-plus cities will be covered by March 31, 2013. All urban areas would be covered in Phase 3 and the entire country will be covered by December 31, 2014.

    Hariprasad

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  10. I’m glad this topic is being debated..urgently needed. The basic point here is analogue cable supports anywhere between 80-100 channels. Today we have more than 600 channels which are available, but in any analogue cable service, it means that about 500 of them can’t get through to the end subscriber due to limitations of the analogue cable. Now as a side point – Technically, this is a case for technology preventing greater diversity and pluralism in media, but it would be interesting to note how different are these 600 channels from each other? My guess would be not too different.

    The stats reveal why this hurry to digitize – There are 140 million (approx) sets in the country. Of these, 136 million are grouped under cable and satellite. The break up is: Cable = 94 million and DTH = 42 million.
    Further, of the 94 million cable homes, 88 million are analogue.

    It is primarily this massive chunk of the market that the distributors, carriers, advertisers, etc are eyeing.
    Of course, there are under-subscription issues from the digital companies, and the lack of control in pricing etc, from the cable operators and MSO’s. Both are valid, but not necessarily made in “public interest” when articulated by these parties. TRAI has attempted a series of interventions on these issues, but hasn’t really worked.

    The transition to digitization leading to dividend is not really applicable here. We are not using terrestrial analogue spectrum for cable. Only Doordarshan broadcasts on this spectrum, and as of this year, Prasar Bharti has lost control of UHF Band Five, which hosts the waterfront 700 MHz spectrum – now to be used for 4G. However that’s another story for another time.

    The digitization here is really about “addressability” – which means the ability to do precise audits in terms of viewership. This is where the revenue jump will be for most of the companies who have invested or are investing. Film producers and Bollywood will also be supportive for this, with the recent trend of films now selling off TV rights at huge sums within weeks of theatrical release. The more viewers they get on DTH, the more they are sure that there are X amount of viewers, and it means more revenue for everyone concerned.

    As far as the viewers are concerned – there are a whole host of issues. Take the case of the US, Obama had to sign the DTV Delay Act, when it became apparent that approx 2 million wont have access to television when the almost overnight analogue switchoff was supposed to happen. I would suspect that the figure will be only more drastic in India, even in urban India, and definitely more so in semi-urban and rural areas.

    The big question here is even if digitization will happen – who will foot the bill? Elsewhere, it has been a mix of industry picking up part of the tab, and partly government through cutting of import duties, and further subsidy of relevant equipment. Consumers cannot be asked to invest up front for STB. There are other issues relating to inter-operability, Right of Way, Entertainment Tax issues etc. A tragic consequence of digitization will be the elimination of local video and its dissemination. Also, cable as infrastructure has not been given enough of an opportunity – can it be used to provide internet to these homes? Instead govt plans to use all the USOF funds to put Optical Fibre Cable to provide connectivity as per National Broadband Plan – no rational assessment – just excitement about technology!

    I believe that this issue of digitization cannot be looked at in isolation. Digitization debates are going on all over the world now, and we need to put it in perspective. Further, digitization in cable, digitzation for mobile tv, the presence of telcos and their annexation of analogue terrestrial tv spectrum for 4G/LTE, the increasing vertical integration of telcos across the value chain of digital communication, privacy, surveillance, centralization, elimination of localized content, addressability etc, form some of the issues but its a large gamut and needs more debate and research.

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    1. You make a few very interesting points.

      I’m honestly confused about one thing – would be grateful if you could help me here. You say we do not use terrestrial analogue spectrum for cable. How does that work? If I dont have digital, and I receive, say, Star Plus, does Star not transmit over spectrum, which is then captured by my cable operator and sent to me via cable?

      And yes, I would love to see an independent impact assessment carried out on this.

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      1. This is where it can get slightly confusing. I will attempt a fairly simple explanation and I guess Sajan can correct mistakes, as he would know better on these things:

        In India, DD-1 (national channel) and DD-2 are the only ones broadcasting on analogue terrestrial. All the private channels were on satellite from the very beginning.

        Both analogue terrestrial and digital on satellite use spectrum for broadcasting.

        In the case of analogue terrestrial, the part of the spectrum used is UHF V, there are three sub-bands used within this. The sub-band containing 700 MHz was empty, and since Prasar Bharti did not use it for so long, it allowed telcos to grab it for wireless internet. Analogue terrestrial will be unencrypted and Free To Air – just like FM radio. Anyone in the vicinity of the coverage area can put up a basic antenna and receive it. Very simple.

        In the case of satellite transmission for private channels, it also uses the spectrum ,but a different part of the spectrum – Ku band. The transponders downlinking the content, are hosted on various satellites including the INSAT ones (read the Antrix-Devas scam). However, the difference is that this signal will be encrypted and digital, which means that it is very precise, and there is no leakage in the transmission process.

        My understanding of this is that at some point in the distribution chain, a dish is needed to receive a digital signal. The MSO or LCO will receive it, and then distribute it through wires to the last mile – your house. It doesn’t matter if you don’t have STB at your house. You can still get digital content via an intermediary.

        Basically there are multiple modes of distribution – LCO analogue, LCO digital, DTH, Headend In The Sky (HITS), IPTV, Mobile TV etc.

        Technology aside, we need to be asking – what is the basic rationale behind broadcasting here? Is it merely a business? If private service providers are providing a service and some people are happy to pay more to receive that service – that is okay.
        If there is a situation when basic access to television – including news and current affairs, etc are simply unaffordable for some sections of the population – then we need to start thinking of media in terms of its public interest function. Someone in an earlier comment had said that “the law has said digitization will be completed in 4 stages” or something like that.
        Fortunately the law has not said it at all. It is the MoIB which has said it. We need to think really carefully about what MoIB has said, because we need to move beyond the techno-rationalist approach and also consider whether people can afford it at this point in time, whether it will serve public interest in this point in time.

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  11. As a broadcaster (well, former broadcaster), I have mixed feelings about digitization, but when the government, the TV channels and the cable guys are going all dewy eyed about it, it’s time to circle the wagons. Thanks, Nivedita, for laying it out clearly for us.

    Mostly, cable digitization is – to use a technical term – bullshit. It’s not happening because they want us to have more choice or prettier pictures. It’s all about the money. (And I’m pretty sure a lot of that money will be the global monopoly capital that Nivedita speaks of with such affection).

    Exactly how much money is this digitization thing going to cost us? No one really knows, but the MSOs – the big guys like Digicable, Hathway, Sumangali etc – say it could cost between Rs.30,000 to Rs.50,000 crores over the next few years. That’s a lot of zeroes.

    Others say the investment could be Rs.55,000 to Rs.60,000 crores. That’s twice the total revenue of the TV industry last year, and I’m not sure if it includes the Rs.1500+ it will cost each of us to buy an STB. STB manufacturers, not all of them Indian, are going to get awfully rich. For those who already have an old STB, there’s good news: you’ll need to buy a new MPEG-4 box. And keep buying upgrades. It’s like Windows.

    Where will this money come from? Unless we are banking on the satellite & cable industry’s well known charitable instincts, or a massive hand-out from Pranab-da, I’d say the Financial Express is right about subscribers getting shafted.

    Frankly, I can’t think of any really useful purpose this mandatory cable digitization serves, unless we assume what’s good for Murdoch is good for India. Sure, the TV channels (“content providers”) will earn a lot more from subscriptions. They’ve always said MSOs and local cable guys (LCOs) were ripping them off by under-reporting their subscriber base.

    Well, it so happens that over 70% of a channel’s revenue comes from advertising, not subscriptions. And 65% of the TV industry’s revenue comes from subscriptions not advertisements, so somebody is certainly getting ripped off; namely, you. You are paying to watch ads, lots of them.

    The cable people (“distributors”) will get their slice of the pie and, if all goes well, an income tax holiday for the next seven years and zero percent customs duty on their equipment, while they pass on all costs to the subscriber. The govt. is likely to collect more service tax.

    And that’s pretty much all the public good that accrues from digitization.

    All the rest of it – the digital dividend and what have you – is pure manure. There is no dividend, except for the stockholder dividends mentioned by Sunalini.

    Digital dividend happens when, say, your terrestrial TV goes digital. Suppose you have a dozen analogue terrestrial TV channels broadcasting over the air in your little town (ABC, NBC, CBS, DD-1, whatever; and that’s real FTA, not the fake FTA crap we get on cable), and they all go digital – presto! – you could cram a hundred digital TV channels into the same spectrum space. But we don’t have a dozen terrestrial TV channels in India, do we? We have two. We have always had two – DD-1 and DD-2 – and they are not going digital any time soon.

    So, after December 2014, TV viewers who don’t want to, or can’t afford to go digital can watch DD.

    By the way, those empty swathes of spectrum from the imaginary digital dividend have already been sold off to Big Telecom.

    As for choice, as Nivedita points out, the Punjabi in Chennai can choose to go with the local cable or DTH providers as she chooses. We already have those choices. Local cable operators serve 88 million homes, but if you don’t like what’s on cable, you have a choice of seven DTH services, not to mention IPTV. But the cable guy gives you 80-90 channels for as little as Rs.70 in rural India. His ARPU, as it’s called in the trade, is Rs.160.

    It gets even better – you can have both analogue and digital channels in the same cable system. The Punjabi in Chennai can have her digital Northern Delight package for extra money, while her neighbours can have their analogue vanilla package for 150 quid or less, even without an STB. That’s choice!

    But not any more. Once cable digitization gets underway, all channels – including FTA – will be digitized and will have to go through an STB. Bully for STB manufacturers.

    Even as it claims to be technology-neutral and says it favours the option of allowing “market forces to determine adoption of and migration to a new and promising technology at a self-determined pace”, our sarkar has its digits deep down our throats.

    Market forces – some 60,000 cable operators and 88 million customers – are happy with analogue cable. The Punjabi in Chennai has migrated to DTH or IPTV. But now the option is between switching to expensive digital cable or stop watching TeeVee. It’s a bummer.

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  12. Sajan:
    “We have always had two – DD-1 and DD-2 – and they are not going digital any time soon.”

    Oh yes, they are. Except its not going to be a switchover. Its going to be simulcast, and eventually switchover. The analogue switchoff date for public television was earlier 2015, and has now been further delayed for 2 years – now 2017. The Sub-Group of the Planning Commission has a report out on it, published way back in 2006. All the usual suspects from AIR and DD sitting on it. Lots of lovely reasons – better quality, more interactive services, more choice for the consumer etc.

    I assume that this report was prompted by the then upcoming Commonwealth Games. Just like the Asia Games in 82 saw the advent of colour TV, I guess the babus thought lets introduce digitization this year – HD TV (digitization of content) and on a test pilot basis – a few digital broadcasts in cities like Delhi and Chennai – wonder how many people saw that digital broadcast?

    In any case the switchover date seems like a long time away, but not that long if you think about it. Its 5 years from now. Don’t see how they see this happening. Apparently STB rates are falling 7-8% every year, so according to them in about 5 years, everything will be hunky-dory. If only everything was so linear in life!

    Saattvic:
    “5. Shivam, read my response again. The rationale for phasing out analogue is (i) ‘digital dividend’ and (ii) the fact that is costs more to beam the same content by two methods (analogue and digital) than by one”

    I don’t know if you read my previous comment, or Sajan’s comment on this digital dividend issue. For the last time –
    The so-called digital dividend is when analogue terrestrial tv spectrum is freed up by asking terrestrial broadcasters to go digital. The resulting empty spectrum is used for high speed long range internet over 700 MHz, via standards like LTE – something companies like Infotel (subsidiary of Reliance) have already laid their grubby hands on. This kind of internet access is supposed to bridge the so-called Digital Divide – hence the name digital dividend.
    In the case of mandatory digitization of cable – there never was and will not result in any dividend of any sort, as far as spectrum is concerned. Anything you read on the contrary are most likely attempts at hogwash and spreading confusion on the issue.

    As for the second sub-point of it costing more to beam the same content by two methods than one, its a very circular logic of yours. The second method is introduced- without that proper assessment and reasoning you are so fond of citing. Please read the Sub-Group’s report on digitization – there are no good reasons as to why digitization should be implemented. The ‘reasons’ given are not really addressing public interest and access issues.

    Then when they fail to make a dent in the “free market” it is made mandatory by MoIB due to severe and sustained lobbying. Then it is argued that what is already prevalent should be stopped because it is more expensive to simulcast! Even in countries where digitization has been completed or nearly completed – simulcast is very common, since broadcasting is supposed to be in public interest, and if consumers, especially from the less affluent sections, cannot afford to access the signal, then the whole rhetoric about public interest is pointless. Most governments recognize this simple reasoning – except ours it seems.

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    1. Thanks, I had indeed not read your reply to my earlier comment when I had written that.

      And what you wrote was very interesting. If I’m not getting you wrong, everything except DD1 and DD2 are broadcast only digitally. DD1 and DD2 are currently broadcast both digitally and by analogue.

      If that is correct, then isn’t it the case that if digital switchover happens, the spectrum used for DD1 and DD2 analogue transmission would be freed up? Wouldn’t that be a digital dividend?

      As for broadcasting in the public interest, I fully agree that it is useless if the poorest cannot afford to watch. But broadcasting for public interest in our country is only done by the government, i.e. the DD group of channels, and DD plus direct is free. Yes, you would argue that the cost of a set top box (500-3000 rupees) would act as a barrier, and you would be right. I would then say that set top boxes should be provided free to vulnerable sections of society (a practice which is not without precedent, mind you – it exists in Australia and in Taipei). Moreover, when I lived in the UK, I noticed that all the new TVs had in built free to air receivers, i.e. you could just plug and play all the FTA channels. You only need a STB in the UK if you want to watch pay channels, so it actually doesn’t cost anything extra. I should imagine that such products would become very popular in India. But be that as it may, I agree that there does not seem to be a mechanism to ensure that the poorest continue t be able to watch public service broadcasting at a very low cost.

      However, this entire discussion tells me that there are two (related but slightly different) issues here – one is the digital switchover and the other is mandatory STBs for receiving digital channels (which cover all channels except DD1 and DD2). Given the information you’ve revealed about the extent of use of terrestrial analogue broadcasting and the public interest issue, I am not so sure that a digital switchover is necessary anymore (Shivam, please note). But breaking cablewallah monopoly and consequently providing watchers of non-DD channels with more choice is reason enough for me to mandate STBs, because I am convinced that the better off urban viewer will stand to gain from a better tailored product, better quality transmission and more competitive prices than he currently gets from the cablewallah. If you are rich enough to afford TV, you’ll get a better deal.

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  13. Bingo, Sajan, looks like that’s another great case set out for the Supreme Court but then these defenders of crony capitalism (which they say they don’t support even as they say there’s no such thing), will say the Supreme Court judges don’t understand economics either. Only they do.

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    1. Thank you Shivam, I have a lot of faith in our Supreme Court. Please, get off your moral high horse for once and stop assuming that everyone is out to prove their moral superiority to the world.

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    2. Shivam,

      Did you really understand the technical argument? Just curious. It seems like you came to a conclusion about crony capitalism before understanding anything.

      Venkatesh

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  14. When statists debate, as usual, the most important question never gets asked. Let me ask that questions for them: why is there a Ministry of Information and Broadcasting at all? To ‘protect’ consumers from the media vultures? Gimme a freaking break!

    But why should we worry, really? In an era of rampaging state regulation why should one worry about a little cable TV socialism? After all, the government has the good of the customer at its heart, right? Oh, I forgot, foodgrain socialism, water supply socialism, electric supply socialism, education socialism are all for the poor chap, but cable TV socialism is for the evil corporates!

    Somehow, the corporatist horror story of honchos in grey suits conspiring to give the shaft to the customer, as narrated by Sunalini Kumar, refuses to pan out in reality. The Evil Corporates always need the benign ‘regulating hand’ of the government to get their things. Let me suggest a simpler gedankenexperiment for Ms Kumar, that won’t get her mind all twisted into a pretzel: what if Intel raises the price of processors by 10x tomorrow? They, after all, don’t need an ‘amicable meeting, to collectively raise their costs’, as with 85% market share, the competition is practically non-existent. I would also think that share holder dividend and executive compensation are as important to Intel as it is to Reliance. Why indeed are those bozos not ‘raising their costs’?

    And Ms Kumar, I am completely exhausted by statists who bring up Water and Electricity to prove how bad ‘privatization’ and free markets are (from when did ‘privatization’ become synonymous with ‘free market’?) As if a completely de-regulated free market exists there. Unless one redefines 90% government ownership (ownership, not just high-handedness) as some sort of ‘free market’.

    Get the government out of business. We don’t need no regulation.

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    1. And I’m exhausted beyond belief at the idea that there are people who seriously think that the state stepping in to protect monopoly capital from competition is “socialism”. All state intervention is not socialism, Murali – there are statists who are socialists and there are statists who are pro-capital. Capitalism wouldn’t have survived for a second without massive intervention by states everywhere. Do ask big business demanding bail-outs if they want ‘government out of business’! Your slogan is a little out of date, and your knowledge of economics more than a little sketchy..

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      1. I don’t see how allowing 60,000 local cable operators to do their business is ‘cable TV socialism’ either. Adam Smith would have approved. This digitization thing is guaranteed to result in cartelization and monopolistic ‘vertical integration’ of the sort one sees in Tamil Nadu and Punjab.

        As far as I can see, the only benefit of this passion for digitization is that it allows the stake-holders — the state, the TV channels and the MSOs — to get rich at the expense of the people at the sharp end of the stake.

        In a pleasing side-effect, it also allows the state to track what you are watching. It’s that Nietzschean thing about looking into the abyss — when you gaze at your TV, remember it’s also gazing into you.

        Saattvic, I’m not sure providing free STBs to vulnerable sections of society would be enough. For one, a very large number of old TV sets can’t handle the STB output. You may have to provide free TV sets as well. And even so, who pays the higher cable bills?

        Parrhesiac, this digitization business is — as Nivedita points out in her post — the law. They pushed through an Ordinance to amend the Cable Act late last year.

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      2. I’m interested to see you evaluate other people’s economic abilities – yours must be of a very high order. And perhaps you might climb down from the Keynesian or Hayekian (insert economist of choice…who am I to judge?) heights to give us an informed response to the points Sattvic, Sajan and parrhesiac have raised?

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  15. Read thro’ the article and the entire debate – cant help shedding 2 tears for Nivedita’s love for the local cablewallah.. :(.

    In my experience (in Bangalore, for the last 13 years), their behaviour changes from area to area – in General, you can definitely say tht the local cablewallah is a VERY BIG monopoly and they are neatly organised into a cartel. if theres a strike for any reason – say cauvery river issues etc – the cable will be shut down for 12-15 hours. Their behaviour is mostly different from area to area. In Jayanagar and Koramangala (where I stayed for more than 5 years), they were OK. In Giri nagar (and in most areas of more-or-less-middle-class South Bangalore), they still are very decent. I am staying near the old airport in an apartment and the local cable guy, who gets his connection from Hathaway, is a very big thief.. He always undrquotes his connections, doesnt pay what he owes to the govt:, changes the channels at his will (wht comes today may not come tomorrow) and you are AT HIS MERCY.. Most of the times, the local cablewallah also doubles up as the area goon.. – especially concentrating on apartments. He has a monopoly over milk, newspaper vending etc along with cable connection. And sorry to break your bubble, but no corporate can ever hope to have a monopoly like what these guys have practiced and perfected – YOU DONT HAVE A CHOICE in choosing the channels or the cable vendor. There is a cartel of 5-6 cablewallahs who have divided the areas/apartments among themselves and under no circumstances can you bring anyone else in to your apartment. You may even be physically harmed. . Thank God for the DTH that many families in my apartment have shifted. The quality of transmission of local cable guy is consistently bad for the last 7+ years and he refuses to do anything to improve it.. hes trying to service more than 200+ apartments with some very insufficient infrastructure and is talking abt a booster for the last 7 years.. He refuses to provide the digital set top box even if you are ready to pay for it – in short, no corporate monopoly can be worse than many of these guys.. I, for sure, will not shed a single drop of tear for most of the local cablewallahs…

    I have to accept that I havent yet made the switch for the following reasons – 1. I am friends with the person employed by the cablewallah 2. I dont want to pay more for the TV 3. I can live without channels … But I am not stupid enough to insist that everyone shd be a client of these rogues..

    Having said that, I have no love lost for the big corporates. I am a liberal in personal relationships and a staunch votary for goivt: intervention and control – and advocate strong social security measures from givt: with ZERO CONTRIBUTION from the corporates. After all the corproates are yet to master the digital technology to provide half decent signal when it rains :(

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    1. Actually, nobody here is ‘stupid enough’ to insist that everyone should be a client for the rogues, which in your case happens to be the cablewallahs. The post was saying indeed that the option should remain open for EITHER local cable or DTH, because it is entirely likely that the DTH services may cost more in many variants. The idea of the post is to ask why the vaunted idea of choice in the free market should not be extended to technologies or services that have been deemed obsolete, and why should the State step in to help the new technology/service. If the older guys are obsolete, let them wither away in due course. If they are still chosen by consumers, let them stay. Isn’t that Economics 101? No, the free marketers apparently want to have their competition and eat it too.

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  16. as sunalini have pointed
    “What if they decide, over an amicable meeting, to collectively raise their costs? Of course, they will always figure out some way to undercut each other, but what is to stop them from jointly pushing prices up steadily over the next few years”?
    my personal opinion is that this is a hypothetical situation and we cant frame laws considering this is gonna happen.
    second thing is that cable operator gives me channels which he likes, my choices and likes are not considered,he is deciding which channel i should watch and which i should not.
    thirdly about the cost my family uses a analog one and i uses a digital one , my cost stays always lower than what my family is paying, the cable operator offers u 100 channels of which you are going to watch only a few.
    then about the quality, in digital transmission either u can see the picture in full quality or u wont get the signal, there are only full clarity or no signal at all, u dont have to watch tv with a blurred screen for many days and dammage ur eyes till the local persons come and repair it.

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  17. Big Boss – whatever my abilities in understanding economics, they cannot be lower than your skills of reading and comprehension. Sajan is in agreement with me, and offers some of the most informed comments in this debate, while Parrhesiac is in agreement more or less, with Sajan. Together, they demolish Saattvic’s points totally, while you seem to think that they all disagree with me!

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  18. ok I have got the idea of the new rule formed by the government,but I have a dought that ‘Did we have to pay money according to the no. Of channels we select.’

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  19. Why so much rhetoric? The reasons are very obvious. 1) The set top box manufacturers and importers want their stuff sold and the only way to get that moving is to make the State legislate to the effect mandating every person wanting to watch “paid for” channels must do so through a set top box and, (2) it is a forgone conclusion that without the set top boxes the TV channels are not making enough money as the cable operators short-change them by under reporting the number of actual users (subscribers). With the set top box that will not be possible and TV houses, such as Star and Zee (to name a few), will now be able to get more revenue based on actual number of subscribers as opposed to numbers that are provided by the cable operators before the set top box regime.

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  20. i watch only sports channels n some serials n movies for wich my cablewalla charges me rs 200 but in the new stb it costs much more even if i pay for the channels i watch n my current clarity of cable is also excellent

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