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Sun-Arasu battle: Rules cannot force a compromise

Bapun Raz

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http://timesofindia.indiatimes.com/city/chennai/Sun-Arasu-battle-Rules-cannot-force-a-compromise/articleshow/10181613.cms

Arasu Cable TV Corporation may have the backing of the government but its battle with Sun Network promises to be bitter. Arasu has to quickly ramp up its subscriber base and invest at least 300 crore in digital infrastructure. Also it will have to negotiate with Sun the terms for getting the network's feed. A crucial factor would be the ground rules which are laid by the Information and Broadcasting ministry and the Telecom Regulatory Authority of India (TRAI).

As per the Cable TV Network Regulation Act of 1995 and the uplinking and downlinking guidelines issued by the I & B ministry, no channel can refuse to provide signals to any cable TV operator, direct to home (DTH) or any other service provider. There is a history of such disputes and various courts have time and again ruled that channels cannot refuse to provide signals. As long as the channels are free to air, there will not be any dispute.

However, in the case of pay channels, the service provider needs to pay money for the signals it receives. Even this tariff is fixed by the TRAI for each and every channel . No channel can charge in excess of the upper limit fixed by telecom authority. But most often, the multi-system operators (MSOs) negotiate for a lesser price, which is permitted under the TRAI guidelines. The parties concerned always keep it a discrete exercise. Obviously, in the case of Arasu and Sun, there is no such meeting point. While Arasu wants the Sun feed at a low price, Sun expects the maximum.

Meanwhile, Arasu needs to make huge investment on infrastructure, especially for the installation of digital headends in all districts to comply with the I&B ministry's latest sunset timeline for conversion from the analogue to digital mode. As per the timeline, service providers in all metros should go digital before March 31, 2012. In other cities with a population of more than 10 lakh, the deadline fixed is March 31, 2013. The rest of the country should go digital before January 1, 2014. The government is expected to promulgate an ordinance in this regard very soon.

Each digital headend could cost at least 10 crore and a city like Chennai needs at least two headends. In all, the Arasu corporation will have to shell out at least 300-500 crore for capacity addition, said an official. The Arasu corporation does not have money for the modernization exercise. It is estimated there are 95 lakh cable connections in the state, excluding Chennai. The corporation gets less than 19 crore from them. Much of the income is used to pay channels and the balance, about 1 crore, will go towards salary disbursement once all the 200 employees are recruited.

But there is a significant number of 'undeclared ' cable connections and the corporation is taking steps to enumerate all of them through verification of electricity board cards and ration cards. "We will start making profit only if our subscriber base crosses one crore. It might happen soon," said an official.
 
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