Should commercial institutions be treated differently under CAS?

By , agencyfaqs! | In | June 05, 2003
Media observers are already divided in their opinion on whether CAS should be applied to hotels or not

As issues such as the availability of set top boxes, launch of consumer friendly schemes by multiple systems operators, and threats from Consumer Coordination Council engage consumers, the industry and the Government, it would be interesting to see the ramifications of CAS from a non-consumer perspective. For starters, let us look at how hotels are going to be affected by the proposed conditional access system.

Before engaging in such a discussion, it is important to clarify that small hotels are likely to be affected in the same manner as a regular retail consumer - or, in other words, like any other C&S household. That is because, unlike big hotels, small hotels receive their cable channels through the local cable operator, who charge them the subscriber rate. In contrast, big hotels pay directly to the broadcasters.

Neither the Information & Broadcasting Ministry nor the pay channel broadcasters have initiated any sort of dialogue or taken a step towards formulating policies that will govern CAS for commercial usage. As agencyfaqs! spoke to hoteliers, a number of key questions came up. Should a hotel install a separate set top box (STB) for each television set in every room? Would there be a centralised cable distribution system for hotels post CAS, or would hotels fall out of the CAS purview? Would there be a separate rate for commercial institutions?

Sudeep Malhotra, editor & publisher, TV Guide (satellite and cable TV magazine published by Scat Media & Consultancy), reasons out, "Hotels such as the Taj and Oberoi do not charge the guests for C&S channels they watch in their rooms. Post CAS, however, if the hotel wants to provide pay channels, they would have to have STBs." That means an additional capital investment. "While MSOs/LCOs would recover their investment/costs from their subscribers (in this case the hotel), who would the hotel recover its additional costs/investments from?" asks Malhotra.

So far (and of course they still continue to), hotels have had access to the cable and satellite channels through a direct arrangement with broadcasters. Most of the three-star and five-star hotels have their own dish antennas configured to receive signals from broadcasters. Thus, besides all the Indian channels, big hotels have access to other foreign channels that are not available to ordinary household subscribers.

However, the current arrangement of hotels with the broadcasters is not without snags. According to Shyam Suri, secretary general, Federation of Hotels and Restaurants of India, "Broadcasters say for big hotels it is illegal to take cable connection from the LCOs." And why is that? Suri suggests even he doesn't have a proper answer to that. "When we ask them (broadcasters) to produce documents to prove the same, they have nothing concrete to say," he adds.

No doubt, reaching hotels directly is a profitable proposition for broadcasters, who charge a commercial tariff on per room basis from them. To give an idea of the of the kind of rates charged by broadcasters, Suri says, "If a subscriber pays to the cable operators Rs 8 for a pay channel, for the same pay channel the hotel is charged Rs 40. The difference is exorbitant." In fact, the Federation of Hotels and Restaurants of India has filed a petition against broadcasters in the Monopolies and Restrictive Trade Practices Commission (MRTPC) for charging 'ridiculous' tariffs 'on the pretext of commercial usage'.

As things stand now, big hotels have yet to be approached by channel providers to work out a suitable strategy for the CAS environment. "Till a week ago, hotels had not been approached," states Suri. "Till there is some official communication from broadcasters to us, there will be no action," states Suri.

While hoteliers and broadcasters have yet to sit across the table and talk, media observers are already divided in their opinion on whether CAS should be applied to hotels or not. In Malhotra's view, hotels should be excluded from the CAS net. "I think the Ministry and broadcasters should apply their minds to it and keep hotels out of CAS." An observer from the media industry disagrees. "There should be a uniform CAS law, and it should be made mandatory for hotels too. In markets abroad hotels fall under CAS."

Internationally, hotels have a sort of unified STB that distributes channels to every room in a hotel. "A unified STB does not require much; it is only a matter of upgrading the existing equipment and technology that a hotel has already," the media observer clarifies.

If that is the norm internationally, should Indian hotels be treated differently?

It seems there's one more question on CAS that has not been answered satisfactorily yet. © 2003 agencyfaqs!

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