Towards Convergent Regulation

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• Towards Convergent Regulation

17th November, 2008
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Explosive Growth of Media

• Its known that people watch programmes, not
  channels-Sameer Nair- CEO NDTV Imagine.
• Why shouldnt people jump into the TV business?
  If the new players have built-in losses for three
  years, subscription revenue will roll in- Haresh
  Chawla- CEO CNBC TV18.
• There is an extremely bright future for TV
  channels that put together quality programming
  and pitch it well to a dynamically changing
  audience- Indrani Mukherjea -Chairperson INX
  Media.

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Convergence and media conglomerates

• Convergence will continue to play a crucial role
  in the development of the Indian entertainment
  and media industry where consumers will
  increasingly be calling the shots in a converged
  media world.- Timmy Kandhari ED EMP-PWC.
• 2006 marked the start of convergence for the
  industry for the industry with big names like
  Reliance Adlabs, Bennet Coleman and Co and Zee
  group forming media conglomerates to maximize
  growth on lines of Walt Disney and Time Warner-
  Ruth David- Writer Forbes.Com.

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Dominance of Cable TV

• Indias cable TV industry already connects 78
  million homes with 60 households owning a TV set
  connected to cable.
• In USA, cable has evolved into claiming the pole
  position in the race to deliver converged bundles
  of services to the home.
• But in India only 350000 homes have taken cable
  broadband services out of a massive 71 million.
• Huge infusion of Indian and foreign capital is
  required but current regulation is intrusive-
  Media Partners Asia

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Dawn of digital TV era

• The dawn of digital TV broadcasting will enable
  optimization of scarce spectrum.
• This will lead to enhancements like mobile TV
  reception/HDTV/IP based TV and introduction of
  new convergent multimedia services and new
  applications such as 3G.
• With digitization of content and entertainment
  it is now possible to bridge the digital divide
  effectively bringing in triple play and using the
  home TV or mobile phone as the bridging
  device.-Subgroup on going Digital-Planning
  Commission.-2006.

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Aggregating multimedia content

• Verizon USA is spending 18 billion dollars to
  bring fibre optic lines directly to a customers
  house.
• This will enable it to bundle video, Internet,
  telephone and wireless services to help counter
  the effects of competition and technology
  substitution that have resulted in access line
  losses.
• The question is what it will do with those
  pipes. One answer is to reposition Verizon as
  the largest distributor/aggregator and originator
  of video content- Knowledge _at_ Wharton.

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Glorious revolution for media?

• Media companies are about to enter a new dark age
  or experience a glorious revolution.
• With a multitude of distribution platforms and
  over 380 TV channels, India is moving into time
  shift appointment TV.
• Any kind of content that does have value in the
  immediate live moment is or will soon
  experience a collapsing business model.
• Any company making equipment for the consumer,
  enabling them to store, move, replay, carry
  around, compress, archive and transmit will do
  very well.

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Increasing multimedia competition

• The PWC global media survey for 2008-2012
  forecasts that with telecom companies
  distributing TV,competition with cable will
  intensify.
• In Asia-Pacific,an emerging IPTV and DTH will
  boost subscription spending.
• DVR household universe in US has doubled to 20
  but less than half viewers actually skip
  advertisements.

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Cusp of tectonic change

• Global sales of wireless media devices like
  iPhones and N Series Nokia will reach 222 million
  and cross 1.2 billion units by 2014.-Strategic
  Analytics.
• Apple will make hay and potentially end up with
  an important distribution platform for those who
  do not mind electively paying for the latest
  movie.- Clem Chambers-Forbes. Com.
• Electronic media is on the cusp of tectonic
  change.

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Monopolies washed away?

• The old established monopolies of distributors
  and broadcasters has been washed away by ever
  increasing digitalization.
• There is greater emphasis on personal movable
  instant reply portable entertainment devices.
• We must grasp the reality of hyper competition
  and face the future boldly.
• In such a context let us examine the regulatory
  scenario in India.

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Protecting public rights

• Way back in 1993,the Supreme Court observed that
  airwaves or frequencies are public
  property.Their use has to be controlled in the
  interest of the public and to prevent the
  invasion of their rights.
• It directed the setting up of an independent
  autonomous regulatory authority as airwaves are
  public property.

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Convergent Regulation

• The saga of efforts to implement the Supreme
  Court directive is replete with half hearted
  efforts and very effective lobbying by sections
  of media.
• The first Bill came in 1997 and the last version
  in 2007.
• In 2001,Government introduced a Convergence Bill
  which fell through because it was ahead of its
  times but actually tread on inter-ministerial
  corns.

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Regulating Broadcaster Content

• In 1995,Parliament passed the Cable Act 1995
  mainly to regulate mushrooming cable operators
  and through them the broadcasters.
• In 2005,the Bombay High Court debarred telecast
  of adult content by cable operators and made
  broadcasters also responsible for any violation
  of the programme and advertising code of the
  Cable Act.

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Tra-ing to regulate broadcasters

• In 2004,Government notified broadcasting and
  cable services as telecommunication services and
  made TRAI the interim regulator.
• TRAI has mainly focused on interconnection and
  tariff issues.
• Recently TRAI has displayed eagerness to regulate
  content in recommendations on ratings and public
  broadcasting.

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Regulatory Convergence

• TRAI has recently observed that a regulators role
  is to mitigate market failures with light touch
  regulation.
• Technology neutral approach is the need of the
  hour with licensing to shift to service neutral
  from service specific approach.
• Convergence demands a single regulatory
  approach with well defined regulatory framework.

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Reviving Convergence Regulation?

• TRAI goes on to assert that a new and market
  drive framework for convergence is unavoidable.
• The Regulator has to ensure that competition is
  fair and level playing field is maintained to new
  and legacy service providers.
• Content regulation is a prime concern.

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The path forward..

• There is a collapse and collision of technologies
  which will be difficult to regulate.
• At same time,the need to regulate in public
  interest is not denied.
• Question is who is the custodian of public
  interest? A news broadcaster in search of TRPs or
  a GEC pleasing advertisers or a sports
  broadcaster enriching his coffers?

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Regulation or self regulation?

• Supreme Court clearly drew a line between self
  regulation and stressed the need for an
  independent regulator.
• Recently it expressed strong views on the delay
  in codifying content code.
• But we are moving towards self regulation for TV
  content.
• NBA has already operationalised its code from
  October 2,2008.

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Whats wrong with self regulation?

• Possibility of public being excluded from content
  regulation. Sure they can complain but the
  decision as to whether they are right or wrong is
  left to the creator of content or their peers.
• TRAI urges light touch regulation to mitigate
  market failure.

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Who should regulate media?

• Is TRAI the appropriate regulator in these
  converged times?
• Hard to say! Reason is the limitation to its
  powers to tariff and interconnection.
• Policy Arena remains firmly in the grip of the
  MIB/DOT.
• At least a dozen recommendations on electronic
  media are pending active consideration
  andprocessing in the MIB.

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Is EMRA the answer?

• In the past MSO Alliance has proposed an
  electronic media regulator to regulate all forms
  of video/radio/internet/wireless/wimax content.
• This would lead to possible extinction of two
  powerful ministries.
• This is not likely in the near future. In
  conclusion we are very far away from a converged
  regulator!
• So let us pray that at least the ministries and
  the Regulator converge!

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Converged Regulation

• Thank You
• Ashok Mansukhani.
• President MSO Alliance.