Broadcasting

& Cable
Distribution
Amity University, Dubai
Telecommunication Laws
Historical Background
• Cable TV came into existence in India in 1983 when Doordarshan (the
broadcast arm of the government) started its services on cable networks
in the rural villages of Rajasthan. In 1989 a few entrepreneurs set up
small cable TV networks and started local video channels showing
movies and music videos.
• The international satellite television was introduced in India during
1991 with the coverage of the Gulf war by CNN. The spread of cable
TV received a boost during 1992 with the launch of the cable TV
programme networks by Zee Telefilms and the STAR group by beaming
India-specific content.
 • In India, cable TV has adopted a franchisee model
with the Local Cable Operator (LCO) being the main
contact for subscribers. The LCO lays down the last-
mile connection, thus connecting each household to
the cable TV network.
Cable • The LCOs receive the programmes broadcast
through the GEO satellites by installing dish
Television antennas at the cable head-end.
• With increasing number of broadcasters, the number
Services of such antennas also increased and most of the
LCOs were not able to install the required number of
antennas to provide comprehensive content to
subscribers. Hence a set of aggregators referred to as
Multi Service Operators emerged. Examples of
MSOs include Sun Cable and Hinduja’s InCable.
 • The DTH broadcasting service refers to
distribution of multi-channel TV
programmes in Ku-band by using a satellite
system to directly provide TV signals to
Direct to subscribers’ premises without passing
through an intermediary such as a cable
Home operator. The DTH service cannot be used to
Broadcasting transmit signals to cable operators. Hence the
business model of DTH does not involve any
revenue-sharing with other stakeholders such
as MSOs in the value chain, as is often the
case with LCOs.
 Restrictions on DTH

The DTH guidelines took a very protective approach of not allowing more than 20 per cent Foreign Direct Investment
(FDI) in the foreign equity of the DTH licensees. An entry fee of Rs 10 crores and an annual levy of 10 per cent of the
revenue was prescribed for DTH licensees. The licensee was required to obtain permission from the WPC wing of the
DoT for clearance and to obtain an operational licence from the WPC before the provisioning of the service.

Broadcasting companies and cable network companies cannot collectively own more than 20% of the total equity of
applicant company at any time during the license period. Similarly, the applicant company cannot have more than 20%
equity share in a broadcasting and/or cable network company.
Shiv Cable TV System
v. State of Rajasthan
• The case arose from a district administration’s order
directing the local police to halt cable TV networks
because the cable operators lacked the necessary
licenses.
• The affected operators challenged the district
administration’s order in the Rajasthan High Court on
the ground that there was no law that required them to
obtain licenses for their networks. They argued that the
district administration’s actions violated
their fundamental right to carry on a trade and
business.
• The state government told the high court that the cable
operators had to obtain licenses under the Telegraph
Act and the Wireless Telegraphy Act to legally operate
their networks.
 Observations of the High Court
• The High Court agreed with the government’s arguments. It explained that cable
• networks typically comprise two elements:
• 1) A dish antenna to receive programmes transmitted by satellites.
• 2) A cable network to physically distribute these programmes to subscribers.
• The Court said that since a cable operator’s dish antenna was capable of
receiving transient images of fixed and moving objects from satellites, the dish antenna
constituted a wireless telegraph apparatus under the Wireless Telegraphy Act. It held
that unless covered by an exemption, the dish antenna required a wireless license for its
operation.
• The Court held that lines and cables in a cable network were covered by the definition
of a ‘telegraph line’ under the Telegraph Act, and the cable operators had to obtain
statutory licenses in order for their dish antennas to download programmes from
satellites and to transmit these downloaded programmes through their networks to
customers.
 • Despite this, the High Court set aside the impugned
orders of the district administration as they were
made without jurisdiction. It held that under the
Telegraph Act and the Wireless Telegraphy Act, only
the Director General of Posts and Telegraphs, a
Central Government official, was competent to take
the actions in question.

Aftermath of • The High Court noted that the government had not
framed any rules or guidelines to regulate
cable networks. Noting that an outright prohibition
the case on cable networks was difficult because they had
already grown deep roots in several areas, the high
court called on the government to establish a
licensing system to regulate cable networks.
 • Since the broadcasters and MSOs do not come into
direct contact with the subscribers, there is
information asymmetry between them and the LCOs
who is the direct contact with the subscribers. This
information asymmetry was exploited to a certain
extent and the LCO could potentially hide the exact

Challenges number of households connected, thus saving the

revenue to be shared with the broadcasters and
MSOs. The MSOs in turn might disconnect signals
faced in Cable to the LCO without any prior notice and seek undue
enhanced commitment for subscriber base and
TV Operations higher payments.
• Moreover, LCOs are required to pay entertainment
tax and service tax which are linked to the number
of subscribers. Without the implementation of
proper billing systems, LCOs may evade taxes by
under-declaring their subscriber base.
Conditional Access Systems
• In December 2002, Parliament enacted an amendment to the Cable
Networks Act requiring consumers to use ‘addressable systems’ to access
premium and pay channels through cable networks. Addressable systems
are also called ‘conditional access systems’ (CAS) or ‘set-top boxes.’
• The amendment provided that cable subscribers receive a basic package of
channels that had to include a mixture of entertainment, information, and
educational programmes. The government may fix the total number of free-
to-air channel to be included, and the maximum amount that cable operators
may charge subscribers in the basic service tier.
Conditional Access System
• The CAS ensures that only duly authorized subscribers are able to view a particular
programming package. A CAS system consists of an integrated receiver decoder
also called the Set-Top Box (STB) at the subscriber premise. This is an electronic
device which contains the necessary hardware, software, and interfaces to select,
receive, unscramble and view programmes.
• Since signals are scrambled in CAS, only the viewers with a valid signed contract
with CAS service providers are authorized to unscramble and view the chosen
programmes. Moreover, when the viewer chooses a pay channel or a programme,
the information related to subscriber details, method of payment, and services
purchased is stored and updated in the database. Apart from selecting pay channels,
a CAS may be used for provisioning of other services such as video on demand.
• Following a 2003 Amendment, the Central Government
announced a series of measures to implement the CAS
framework, including a 2003 notification that required
cable operators in Chennai, Mumbai, Delhi and
Kolkata to transmit pay channels only
through addressable systems.
• While broadcasters and Multi-Service Operators
(MSOs) welcomed the introduction of CAS framework,
Government
consumers were outraged at the prospect of paying
special rates for premium channels. Local cable
measures
operators were also upset as they feared loss of revenue
from cable subscribers who would elect to receive only
the basic package of free-to-air channels.
• In January 2004, the Government referred the matter to TRAI. For this
purpose the government issued a notification under section 11(1) (d)
of the Telecom Regulatory Authority of India Act entrusting additional
regulatory functions to the Authority. In a separate notification, the
government revised the definition of ‘telecommunication service’ in
Section 2 (1) (k) of the TRAI Act to include broadcasting and cable
services within this definition. This meant that TRAI could now
regulate broadcasting and cable service as telecommunication services
and the Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
could adjudicate upon disputes relating to this service.
CAS v. DTH
• It is to be noted that both CAS and DTH are addressable systems and the users pay
for the channels they subscribe to. The DTH service is a substitute for CAS as it
bypasses the local cable network to deliver TV programmes directly to subscribers.
However, it is to be noted that in CAS-notified areas, the LCO has to offer a ‘basic
service’ that consists of about thirty FTA channels and the subscribers should be
able to access these basic service offerings without the need for STBs. However, in
case of the DTH service, all programmes are viewable only by authorized
subscribers through the STB. Even the FTA programmes of the national broadcaster
Doordarshan can be viewed by DTH subscribers only through a STB. While it is
mandatory for CAS operators to provide channels to subscribers on an a-la-carte
basis, it is not so in the case of DTH services.
TRAI's Role
• Every broadcaster is required to declare whether each of its channels is
either pay or free to air, and the maximum retail price of each of the
‘pay channels.’ If TRAI believes that the declared price for a channel is
too high, it may revise the price of the channel. It has the option of
fixing retail price ceiling for all pay channels.
• TRAI released comprehensive recommendations on broadcasting and
cable services in October 2004. It recommended that there should be no
regulation on advertisements in free-to-air and pay channels. But it
proposed a suitable amendment to the Cable Networks Act to enable the
government to regulate advertisements, if necessary.
Head-end in the Sky Services
• HITS is a satellite-based delivery platform for delivering multi-
channel television signals to cable operators across the country. It is
capable of delivering TV signals in digital form with addressability
features. The HITS operator uplinks signals of TV channels of
different broadcasters to his HITS satellite in the sky. The cable
operators across the country can then downlink these TV channels
from this HITS satellite for further distribution to the subscribers
through their cable network in digital form.
TRAI Recommendations
• An entry fee of Rs 10 crore and minimum networth requirement of Rs
40 crore have been recommended to ensure that only serious players
get HITS license. However, no annual fee has been recommended in
order to ensure level playing field with MSOs, and to ensure that the
HITS service competes effectively with other delivery platforms.
• To avoid vertical integration and to promote competition, cross
holding restrictions among the broadcasting company, DTH licensee
and HITS operator has been recommended.
HITS v. DTH
• While the HITS is similar to the DTH service in the delivery of channels through the
satellite, it is meant to supplement the cable TV network and not act as a substitute as
in the case of DTH. It is clearly stated in the recommendations and later in the DoT
guidelines that the HITS operator should provide signals directly from the satellite
only to the registered MSOs/ cable operators. However, the operator will not be barred
from providing signals, through its own cable network, if any, to consumers also after
first downlinking the signals to the terrestrial station. The HITS operator under no
circumstances should provide signals directly from his satellite to the consumer much
like DTH service providers. The function of HITS is very similar to the MSOs except
that the head-end is terrestrial in the case of the MSOs while it is in the sky in HITS.
Both carry and distribute broadcast television signals by first uplinking from an earth
station to a satellite in the sky for downlinking at various locations.
Draft Proposal
• The Communications Convergence Bill, 2000 was aimed at creating a
single regulatory authority (Communications Commission of India)
that would repeal the Indian Telegraph Act 1885, the Indian Wireless
Telegraphy Act 1933, the Telegraph Wire Unlawful Possession Act,
1950, and the Telecom Regulatory Authority of India Act, 1997. The
government’s decision to open the telecommunications sector and
its recognition that traditional media and communication laws did not
adequately deal with advancements in information technology led to
the proposal to create a single regulatory authority.
Secretary, Ministry of Information &
Broadcasting v. Cricket Association of Bengal
• The background facts that led to the landmark 1995 judgment of the
Supreme Court of India on the airwaves relate to a dispute between the
Ministry of Information and Broadcasting and the Cricket Association
of Bengal (CAB) over whether or not the cricket organisation had the
right to grant exclusive telecast rights to a private agency rather than
to Doordarshan. In responding the dispute over the facts of the
case, courts at various levels had to examine the larger issue of
whether or not the Government or government-related agencies like
Doordarshan could enjoy a monopoly over the creation of terrestrial
signals and sole discretion over telecasting or not telecasting them.
Issues
• What, if any, are the conditions that can be imposed by Government department
concerned -- in the present case the Ministry of Information and Broadcasting -- for: [a]
creating terrestrial signal of the event? [b] granting facilities of uplinking to a satellite
not owned or controlled by the Government or its agencies?
• Does the Government or Government agencies like DD -- in the present case -- have a
monopoly over creating terrestrial signals and telecasting them or refusing to telecast
them?
• Can the Government or Government agencies like DD claim to be the host broadcaster
for all events, whether produced or organised by it or by anybody else in the country?
Can they insist upon the organiser or the agency engaged by them to telecast the
event(s), taking signals only from the Government or Government agency and to
telecast only with its express permission?
Judgement
• The Supreme Court held that the airwaves or frequencies were a public property. Their use had
to be controlled and regulated by a public authority in the interests of the public and to prevent
the invasion of their rights. Since the electronic media involved the use of the airwaves, this
factor creates an inbuilt restriction on its use, as in the case of any other public property.
• The Supreme Court held that the right to impart and receive information is a species of the
right of freedom. The best means of imparting and receiving information as such is to have
access to telecasting for the purpose. However, this right to have access to telecasting has
limitations on account of the use of public property -- viz., the airwaves -- involved in the
exercise of the right and can be controlled and regulated by a public authority.
• The Supreme Court instructed the Central Government to take immediate steps to establish an
independent, autonomous public authority representative of all sections and interests in society
to control and regulate the use of the airwaves.
Broadcasting under the term Telegraph
• Judicial decisions have also held that the term ‘telegraph’ includes the
term telephone, television, radio, wireless, mobile and video equipment.
• Therefore, to offer most kinds of broadcasting services, a broadcasting
company must obtain two types of licenses:
• A Grant of Permission (GOPA) to offer broadcast services issued by the
Ministry of Information and Broadcasting under the Telegraph Act
• A wireless operating license from the WPC (Wireless Planning &
Coordination Authority) Wing of the Ministry of Communication and
Information Technology under the Wireless Telegraphy Act.