July 20, 2006, New Delhi, Press Release

In view of the Delhi High Court Order to implement CAS on or before 1 January, 2007, CUTS International has stated that to ensure success of CAS this time, bouquets should be banned and there should be a maximum retail price for pay channels.

The Delhi High Court’s order has set the ball rolling for implementation of CAS on or before 1 January 2007 in the three metros of Mumbai, Kolkata and Delhi thus giving the consumers in the three metros the option to choose the pay channel they want to watch.

One of the intended benefits of CAS is that consumer is able to choose channels of his/her choice. In order to ensure this, TRAI has been gearing to regulate the maximum allowable discount on a bouquet of channels to ensure that the price of an individual channel vis-à-vis bouquet of channel does not nullify the choice of individual channels. This was one of the key factors for failure of CAS the last time, as a-la-carte channels were priced against bouquets in such a manner that consumers did not have a real option to choose pay channels on a-la-carte basis.

By introducing the concept of bouquet, we are moving away from the very rationale for introducing CAS, which seeks to provide consumers a tool to choose individual channels. Further, the introduction of bouquet brings along with it several complexities, a press statement issued by CUTS states.

First, the maximum allowable discount has to be determined to ensure that bundling of channels through bouquets does not nullify the individual choice (Here again, the focus is on protecting individual choice). This would require great amount of efforts on the part of TRAI to determine an ‘acceptable’ maximum allowable discount.

Another complexity that would arise, when a broadcaster includes a popular channel in various bouquets and chooses one of these bouquets as the reference bouquet for ensuring that it is complying with the regulation on maximum allowable discount. This way, the broadcaster would be able to fix a higher price for a popular channel by selecting a reference bouquet that allows it to do so. This would nullify the regulation on maximum allowable discount. For these reasons, forming of bouquets should not be permitted.

To avoid any unrealistic fixing of individual price of popular pay channels, there should be a maximum retail price for pay channels and price should be determined on the basis of a channel’s carriage cost, observed the press statement.