Grievances in the air over revenue share in CAS

The interconnection agreement outlined by the Telecom Regulatory Authority of India (Trai) for rolling out the conditional access system (CAS) has ruffled feathers in the broadcaster community.

According to the revenue sharing formula, while the broadcasters get 45 per cent of the subscription revenue of pay channels, large cable network companies known as multi system operators (MSO) get 30 per cent. The remaining 25 per cent goes to the local cable operators.

Trai also gives the stakeholders the option of a mutually agreed alternative interconnection pact. However, if the operators fail to reach such an agreement, the Trai formula will become binding.

"This formula is too arbitrary and retrograde. The market forces should allow us to negotiate. Why should the regulator write a commercial contract between two parties. We pay so much for procuring and beaming content but will receive merely 45 per cent," said R C Venkateish, managing director, ESPN Software India Pvt Ltd.

However, cable network companies are supporting the Trai move. "This is a fair provision and paves the way for the rollout of CAS. We appreciate Trai's stance of retaining carriage fees by MSOs," said Vikki Choudhary, president, National Cable TV Association.

With the interconnection agreements and quality of service in place and Trai having taken in comments on basic service payment for free-to-air channels, the pricing of individual channels is the only remaining link.

However, the retaining of the "basic tier services" or charges for receiving only free-to-air channels by the last mile operators hasn't gone down too well with the MSOs.

"There has to be a basic service charge because even if some subscribers take only free-to-air channels, MSOs still incur expenses in transmission," added Choudhary.