Broadcast pay-TV in India is based on globally developed standards that enabled the fast and affordable deployment of innovative services, and intense competition. During the Covid2019 crisis, broadcast pay-TV cable and DTH platforms continued to provide consistent quality of service to all subscribers.
In contrast, over-the-top (OTT) video streaming services required concerted interventions by broadcasters and mobile network operators to reduce video quality, bitrates, and reduce congestion. While Indian regulation of OTT video services has been very light touch, Indian broadcast pay-TV regulation has grown in complexity and cost since DTH services began in 2003. Not only are DTH and cable operators expected to divert time and resources into jumping through ever more convoluted regulatory hoops, but these additional costs would ultimately be borne by subscribers.
Beyond India, the costs of over-regulation in various sectors have increasingly been recognised and challenged. In India, the rise of broadband internet penetration has provided direct access to new, large, well-funded foreign and local OTT players that are lightly regulated. The result is increased competition, which better serves subscribers and viewers than over-regulation.
Particularly effective measures taken elsewhere to reduce regulatory burdens have been to mandate:
overall cost-benefit analysis for justification of all new regulations and changes, and
sunset dates before which all regulations must be reviewed to ensure they are still justified, otherwise they automatically expire.
Indian regulators would do well to adopt similar measures, both in policy and in practice, and save Indian subscribers hundreds of crores. The capex alone spent to support existing interoperability measures on DTH STBs have exceeded Rs 600 crore.
TRAI’s bundling and pricing controls on content – both distribution and retail – have been widely critiqued. Also pernicious are its technology regulations – most recently its recommendations on set-top-box interoperability measures (10 April 2020) and mooted changes to the technical compliance framework for Conditional Access Systems (CAS) and Subscriber Management Systems (SMS) (Consultation Paper of 22 April 2020). Both are rooted in decades-old competition concerns, predating the internet age and massive advances in basic and digital literacy.
The set-top-box (STB) regulations in particular fail to recognise that pay-TV operators are not in the business of providing devices, but of services. To the extent they are not prevented by regulation, broadcast pay-TV operators differentiate their service offerings with unique combinations of content
and user experience, also VAS, and customer support.
The level of “interoperability” TRAI’s measures would enable – video and audio from one pay-TV platform to be able to be seen and heard via an STB owned by a competitor – were questionable in 2003, when STBs were relatively costly compared to dishes and installation, and the content and user experiences almost unknown without a service subscription.
In 2020, almost anyone can preview videos on the pay-TV providers’ websites, via search engines, or online review sites and make well-informed choices. Pay-TV operators must meet a plethora of regulated quality of service criteria in addition to bundling and pricing criteria. And for those who remain too cautious to commit, STB rental is available from all pay-TV operators.
Unfortunately, TRAI has not performed a cost-benefit analysis on STB interoperability recently, if at all. Costs of interoperability to be borne by all subscribers are quantifiable in terms of capex and opex for each pay-TV operator platform and delays to other road-mapped innovations, which could bring greater benefit to more subscribers. If there is any benefit of TRAI’s recommended interoperability measures, it has never been quantified, nor even systematically estimated, at least not publicly. The capex alone spent to support existing interoperability measures on DTH STBs has exceeded Rs 600 crores, just for the common interface sockets. The benefit to subscribers and viewers has been zero for this white elephant, that all have paid for and none have benefited from. And at the end-of-life, the extra plastic and metal from these STBs are destined for reprocessing or landfill.
The choice of USB port-based interoperability makes the TRAI recommendation appear simple. The simplicity of “plug and play” devices to the user hides huge amounts of standardisation and pre-integration work between USB hosts (STBs) and clients (USB dongles). Content and revenue security and subscriber privacy requirements, plus a history of USB malware exploits targeting embedded systems, make for a large development overhead to support TRAI’s recommended measures without compromising security.
India-unique security requirements also need India-specific standardisation and pre-integration. Costs will again be borne by all existing and future Indian broadcast pay-TV subscribers, for no obvious benefit to any. The existing technical compliance framework for CAS and SMS was meant to ensure minimum content security performance, functionality, and features across platforms and maximum real choice for subscribers, as more content would be made available to each platform complying with this framework.
Although it has not entirely met its objectives, specific incremental changes to the existing framework are preferable to establishing a new framework. Increased auditing capability is needed – especially more technical expertise – to minimise delays and reduce the number of spurious compliances reported. There is also the need to augment, revise and tighten the security parameters within the framework in line with global developments, to schedule future periodic revisions, and to provide a mechanism for urgent out-of-schedule revisions to address exceptional situations. But there is no need to constitute a brand-new framework from scratch.
In summary, TRAI’s recently recommended set-top-box interoperability measures and mooted changes to the technical compliance framework for CAS and SMS threaten to disrupt a sector facing increasing external competition from lightly regulated OTT video and fierce internal competition. Costly, resource-diverting, and time-consuming changes to broadcast pay-TV now, due to redundant early 2000’s concerns, should be avoided. In regulating the most dependable, differentiated, and diversely available pay-TV services, take great care, and first, do no harm!
For further details, please refer to Synamedia’s responses to the relevant TRAI consultations:
https://www.trai.gov.in/sites/default/files/Synamedia_19122019.pdf and here:
(The author is Synamedia India Sales head Deepak Bhatia. The views are personal and Indiantelevision.com may not subscribe to them.)