NATIONAL LAW INSTITUTE UNIVERSITY,

BHOPAL

2018-19

MEDIA LAW

13TH TRIMESTER
SEMINAR PAPER

DTH/NETFLIX: DO WE NEED TO AMEND CABLE TV LAW

SUBMITTED TO: SUBMITTED BY:

PROF. (DR.) MUKESH SHRIVASTAVA ANURAG MENON
PROFESSOR 2014 B.A.LL.B. 64

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 TABLE OF CONTENTS

Introduction ................................................................................................................................ 3

Object of the Act .................................................................................................................... 4

Shiv Cable v. State of Rajasthan ................................................................................................ 4

Overview of the Act ................................................................................................................... 5

Registration of Cable Operators ............................................................................................. 5

Content Regulation ................................................................................................................. 6

Offences and Penalties ........................................................................................................... 7

Advent and Issues in IPTV Services .......................................................................................... 7

Regulatory Issues ................................................................................................................... 8

Major amendments to the act ................................................................................................... 10

2003 Amendment to the Cable Television Networks (Regulation) Act, 1995 (Amendment
Act) ....................................................................................................................................... 10

2011 Amendment to the Cable Television Networks (Regulation) Act, 1995 (Amendment
Act) ....................................................................................................................................... 11

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 INTRODUCTION

Before the introduction of cable television in India, broadcasting was solely under the control
of the State. The Government of India was caught unprepared with the emergence of cable
networks and broadcasting through satellites in the early 1990s. The Government was not able
to put a check on transmission and broadcast of television through foreign satellites.

The necessity of procuring licence for operating cable networks was first mentioned by the
Rajasthan High Court in the case of Shiv Cable TV System v. State of Rajasthan1. In this case,
the district magistrate ordered a ban on cable networks as they were being operated without
licence. Subsequently the order of the district magistrate was challenged in the Rajasthan High
Court on the ground that the order was in violation of fundamental right to freedom trade and
profession. The high court held that there was no violation of the right to freedom of trade
because cable networks fall within the definition of “wireless telegraph apparatus” under the
Indian Wireless Telegraphy Act and therefore it necessary to have licence to operate such
network. This highlighted the need for having a framework for the regulation of cable networks
in India which led to the enactment of the Cable Television Networks (Regulation) Act, 1995.

The statutory basis of government monopoly of the broadcast sector, which was widespread
until the emergence of satellite television in the 1990s, can be traced to the 123-year-old Indian
Telegraph Act of 1885. The Act states that the Central Government has the exclusive privilege
of establishing, maintaining, and working telegraphs within India. The Act and its subsequent
amendments define telegraph broadly to include most modern communication devices
irrespective of their underlying technology. Judicial decisions have also held that the term
‘telegraph’ includes the term telephone, television, radio, wireless, mobile and video
equipment.

The Act authorizes the Central Government to take temporary possession of a telegraph in
cases involving public emergencies or public safety. Section 5(2) enables the government to
lawfully intercept telegraph messages on certain grounds. These include India’s sovereignty
and integrity, state security, friendly relations with foreign states, public order, and preventing
the commission of an offence. The Act empowers the government to revoke a telegraph license
for breach of any terms and conditions or for a default in making license-fee payments.

1
Shiv Cable TV System v. State of Rajasthan, AIR 1993 Raj 197.

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OBJECT OF THE ACT

The object of the Act was to regulate the ‘haphazard mushrooming of cable television
networks’. Due to the lack of licensing mechanism for cable operators; this resulted in large
number of cable operators, broadcasting programmes without any regulation. The Act aimed
at regulating content and operation of cable networks. This was due to the availability of signals
from foreign television networks via satellite communication. The access to foreign television
networks was considered to be a “cultural invasion” as these channels portrayed western
culture. It also wanted to lay down the "responsibilities and obligations in respect of the quality
of service both technically as well content wise, use of materials protected under the copyright
law, exhibition of uncertified films, and protection of subscribers from antinational broadcasts
from sources inimical to national interests".

SHIV CABLE V. STATE OF RAJASTHAN

The reality of cable networks was tested in Shiv Cable TV System v. State of Rajasthan. The
case arose from a district administration’s order directing the local police to halt cable TV
networks because the cable operators lacked the necessary licenses. The affected operators
challenged the district administration’s order in the Rajasthan High Court on the ground that
there was no law that required them to obtain licenses for their networks. They argued that the
district administration’s actions violated their fundamental right to carry on a trade and
business.

The state government told the high court that the cable operators had to obtain licenses under
the Telegraph Act and the Wireless Telegraphy Act to legally operate their networks.

The High Court agreed with the government’s arguments. It explained that cable networks
typically comprise of two elements:

1) A dish antenna to receive programmes transmitted by satellites.

2) A cable network to physically distribute these programmes to subscribers.

The Court said that since a cable operator’s dish antenna was capable of receiving transient
images of fixed and moving objects from satellites, the dish antenna constituted a wireless
telegraph apparatus under the Wireless Telegraphy Act. It held that unless covered by an
exemption, the dish antenna required a wireless license for its operation.

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The Court held that lines and cables in a cable network were covered by the definition of a
‘telegraph line’ under the Telegraph Act, and the cable operators had to obtain statutory
licenses in order for their dish antennas to download programmes from satellites and to transmit
these downloaded programmes through their networks to customers.

Despite this, the High Court set aside the impugned orders of the district administration as they
were made without jurisdiction. It held that under the Telegraph Act and the Wireless
Telegraphy Act, only the Director General of Posts and Telegraphs, a Central Government
official, was competent to take the actions in question. The High Court noted that the
government had not framed any rules or guidelines to regulate cable networks. Noting that an
outright prohibition on cable networks was difficult because they had already grown deep roots
in several areas, the high court called on the government to establish a licensing system to
regulate cable networks.

This decision prompted the government to promulgate an ordinance in 1994 that provided a
legal basis to regulate cable networks. The ordinance was later ratified by Parliament and
passed as the Cable Networks Act, 1995. This legislation was amended in 2003 to require cable
subscribers to use conditional access systems to receive premium channels. The government’s
New Telecom Policy, 1999 sought to align the cable industry closer to the market for telecom
services. It classified cable operators as access providers along with fixed and cellular
licensees. It allowed cable operators to provide last mile links, switched services, and one-way
entertainment services in their respective service areas. Cable operators were allowed to
directly interconnect with other service providers within their service area and share
infrastructure with them. The government decided not to allow cable operators to provide two-
way communications as it would amount to them offering fixed services. But the policy gave
cable operators the option to obtain a separate fixed license for this purpose.

OVERVIEW OF THE ACT

REGISTRATION OF CABLE OPERATORS

In order to regulate cable television networks, it was made mandatory for cable television
network operators to be registered.2 Procedure for registration is laid down is Section 5 of the

2
Section 4 of the Act: “No person shall operate a cable television network unless he is registered a cable operator
under this Act...”

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Act. Any person who is operating or desires to operate a cable network may apply for
registration to the registering authority.

An application for registration of cable operator has to be made under Form 1 along with the
payment of fees of Rs.50 to the head post master within whose territorial jurisdiction the office
of cable operator is situated. The registration certificate which is issued by the registering
authority after inspection is valid for 12 months and can be renewed.

The registering authority may also refuse the registration of a cable operator. The reason for
such refusal has to be recorded in writing and communicated to the applicant.

Section 4A was inserted into the Act by the TRAI (Amendment) Act, 2002. Section 4A deals
with "transmission of programmes through addressable system". [Refer to section on
“2003Amendment to the Cable Television Networks (Regulation) Act, 1995 (Amendment
Act)"].

CONTENT REGULATION

The Central Government, in public interest can put an obligation on every cable operator to
transmit or retransmit a programme3 of any pay channel through addressable system. In public
interest the central government may also ‘specify one or more free to air channels to be included
in the package of channels’ (basic service tier). The Central Government may also, in public
interest specify the maximum amount which can be charged by the operator to the subscriber
for receiving the programmes transmitted in the basic service tier provided by such cable
operators. The cable operators have to publicize to subscribers the subscription rates of each
pay channel at regular intervals.

Sections 5 and 6 of the Act deal with advertisement code and programme code. All cable
services should be in conformity with the codes. Under section 7, cable operators have to
maintain a register as to the content transmitted or retransmitted. All cable operators shall
compulsorily retransmit Doordarshan channels.

3
Section 2(g): “programme means any television broadcast and includes –
i. exhibition of films, features, dramas, advertisements and serials through video cassette recorders or video
cassette player;
ii. any audio or visual or audio-visual live performance or presentation and the expression “programming service”
shall be construed accordingly.

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Section 9 of the Act mandates ‘use of standard equipment in cable television network’. It is the
duty of the cable operator to make sure that the cable television networks do not interfere with
authorized telecommunication systems.

OFFENCES AND PENALTIES

Section 11 gives power to the authorized government authority to seize any cable operator’s
equipment, if such officer has reason to believe that the cable operator is using the equipment
without proper registration.

Sections 16, 17 and 18 of the Act deal with offences under the Act. They lay down punishments
for any act which is in contravention with the provisions of the Act.

Section 16 says anyone who is held to be in violation of the provisions of this Act- For the first
offence: Imprisonment for a term which may extend to 2 years or with fine which may extend
to Rs. 1000 or with both;

For every subsequent offence: Imprisonment for a term which may extend to 5 years and with
fine which may extend to Rs. 5000.

Section 17 deals with when an offence under this Act is committed by a company; in this case
the person in charge will be liable. The Act also gives power to the authorized officer 4 to
prohibit the transmission of certain programmes in public interest under section 19 of the Act.

Under section 20 of the Act, the Central Government in public interest may prohibit the
operation cable television network. The Central Government may make such an order in the
interest of the (i) sovereignty and integrity of India; or (ii) security of India; or (iii) friendly
relations of India with any foreign state; or (iv) public order, decency or morality.

ADVENT AND ISSUES IN IPTV SERVICES

The fast development in telecommunication technologies, enormous capabilities of Internet
protocol (IP) platform and increasing digitalization in broadcasting sector is driving services
like Internet Protocol TV (IPTV), video on demand etc. IPTV service is provided by an

4
Section 2(a): ‘authorized officer’ means within his local limit of jurisdiction:
i. a District Magistrate, or
ii. a Sub Divisional Magistrate, or
iii. a Commissioner of Police, and includes any other officer notified in the Official Gazette, by the Central
Government or the State Government, to an authorized officer for such local limits of jurisdiction as may be
determined by the Government.

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operator using controlled platform in which the consumer directly interacts with equipment
installed by operator in closed user group. IPTV system delivers digital television service using
Internet Protocol (IP) over various access technologies supporting high speed Internet like
broadband connection based on copper loop, optical fiber or wireless access technologies etc.
IPTV platform can also provide services like Video on Demand (VoD), Live Video and gaming
etc. Since triple play services encompass Voice, Video and data, IPTV is also considered within
umbrella of triple play services.

REGULATORY ISSUES

As per ITU, IPTV is defined as multimedia service such as

television/video/audio/text/graphics/data delivered over IP based networks managed to support
the required level of Quality of Service (QoS)/ Quality of Experience (QoE), security,
Interactivity, and reliability. In simple terms, provision of television signal using Internet
Protocol for transmission of signals to the subscribers is termed as IPTV. Since telecom service
providers having Unified Access Services license (UASL) and Cellular Mobile Telephony
Service (CMTS) License are permitted to provide triple play service, they can also provide
IPTV services as it is within ambit of triple play services. DoT can permit any other telecom
licensee also to provide IPTV services. The ISPs having net worth of more than Rs.100 crores
are especially permitted to provide IPTV services after obtaining permission from the licensor.
The question was being raised time and again in view of the provision of Cable Television
Network (Regulation) Act 1995 whether these operators needed any other regulatory
clearances or registration to provide IPTV to their subscribers. It will be important to mention
that Cable Television Network (Regulation) Act 1995 provides that no person shall operate a
cable television network unless he is registered as a cable operator under this act.

The issue of IPTV came up for discussion during discussions on consultation paper on
“Convergence and Competition in Broadcasting in Telecommunication” issued on 2nd January,
2006. One school of thought was that as IPTV is a closed transmission path designed to provide
cable TV services, therefore it should be governed by the provisions of ‘Cable Television
Network (Regulation) Act 1995’. However, the other school of thought was that there will be
certain grey areas/ issues if IPTV service is governed by the existing Cable Television Network
(Regulation) Act, 1995. The issues which needed further clarity are: -

i. Technological requirement of IPTV to deliver content through a STB leads to non-

compliance with the requirement of Section 4A of Cable Television Networks

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 (Regulation) Act, 1995 about Free-To-Air channels not needing an addressable system
in CAS notified areas.
ii. Use of different protocols by different companies and lack of standardization for IPTV
services may violate the requirement of Section 9 of Cable Television Networks
(Regulation) Act, 1995 about use of equipment conforming to Indian Standards.
iii. Applicability of FDI norms, downlinking guidelines and programme codes on telecom
operators licensed under Telegraph Act providing IPTV services with same content as
Cable TV needs clarification.

The important issue is to determine if IPTV provided by Telecom operators is Cable Television
network as first two issues are pertinent only when it is assumed that IPTV service provided
by telecom operators constitutes cable services and is covered under the ambit of Cable
Television Network (Regulation) Act 1995.

Further analysis of the cable networks and IPTV networks indicate that both the structures are
grossly different. In case of cable network, all the channels are pushed to the subscriber
premises and are available at set top box (STB) and can be viewed based on the authorization
given to the subscriber as per service subscribed by him. All channels are available in encrypted
form at set top box even if it is not switched on. The scenario in case of IPTV is completely
different. As soon as STB is switched on, it talks to central administration and billing server
and receive authorization as per the preferences given by the subscriber. Such authorization
details remain with STB till it is kept switched on. The TV signals are available at different
points in the network based on the medium used to provide IPTV. In case of DSLAM, TV
channels are generally available up to DSLAM level. However, in case of optical fiber media,
it can be made available up to Set top box also but only those TV channels are accessible which
are permitted as per authorization. Based on this authorization, it can fetch TV signals either
from DSLAM or any other point in the network. Since in this technology authorization
information and channel are pulled from network, it is also called as pull type technology which
first request for authorization privileges based on which TV channels can be viewed. The above
discussions clearly indicate that IPTV networks are two-way interactive networks in contrast
to conventional cable TV, which are generally one way at present.

From the above discussion it can be inferred that Cable Television Networks (Regulation) Act
1995 does not apply to provision of IPTV services through telecom network and has to be
regulated under appropriate license of service provider under Indian Telegraph Act 1885.

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Telecom service providers as defined in clause 3.1.1 can therefore provide IPTV services
without any other registration under their license and will be subjected to percentage of
Adjusted Gross Revenue (AGR) as license fee as applicable from time to time which is
presently 6%, 8%, and 10% for access service licensees in category “C”, Category “B” and
category “A” circles and 6% for ISPs. In case any telecom service provider register itself as
cable operator and provides IPTV using its telecom resources, it shall be considered as service
under telecom license. Such a service provider shall have to pay the license fee on IPTV
revenue also as applicable to its telecom license.

MAJOR AMENDMENTS TO THE ACT

2003 AMENDMENT TO THE CABLE TELEVISION NETWORKS (REGULATION) ACT, 1995
(AMENDMENT ACT)

Numerous complaints were received by the Government stating that there has been
unreasonable price hike in cable television by the cable operators. Moreover, the cable operator
was not paying appropriate revenue by concealing their income and underreporting their
income. The cable operators defended themselves by stating that the broadcasting industry is
unregulated and they are forced to increase the price for proving cable television services as
the broadcasting companies can increase the charges as per their wish. In order to address these
problems, the government appointed a specialized task force.

Special task force in its study noted that the consumers do not have the choice to select the
premium channels they wanted to watch rather it is provided to them in a bundle irrespective
of the fact they want to subscribe to such channel or not. In order to give choice to the consumer
it recommended the introduction of conditional access systems (CAS). This would require the
consumers to set up set-top boxes which will allow the consumers to view all the free to air
channel and he can choose to watch any of the premier channels for a charge.

This recommendation of the task force was introduced through the 2003 amendment to the Act.
The main objective of the Amendment Act was to address to the frequent and arbitrary increase
in cable charges. This was introduced Section 4A which allowed operators to transmit pay
channels through an addressable system5 apart from basic package of free-to-air channels.

5
Section 4A,
Explanation (a), Cable Television Networks (Regulation) Act, 1995; ‘Addressable system’ is defined as, “an
electronic device or more than one electronic devices put in an integrated system through which signals of a cable
television network can be sent in encrypted or unencrypted form, which can be decoded by the device or devices

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The government on the recommendation of TRAI withdrew the implementation of CAS.
However, this decision was faced with a new challenge6 and this time the single judge bench
of the Delhi High Court held that the Government does not have any ground to suspend the
CAS and it has disregarded the previous decision of the Delhi High Court in Jay Polychem
case.

Finally, the government reintroduced CAS but after issuing rules as to its working and
implementation.

2011 AMENDMENT TO THE CABLE TELEVISION NETWORKS (REGULATION) ACT, 1995

(AMENDMENT ACT)

Parliament passed The Cable Television Networks (Regulation) Amendment Bill, 2011 that
will digitalise cable TV and bring transparency in the system to benefit all stakeholders,
including consumers and cable operators.

“The legislation will regulate cable operators and digitalise the analog TV network across the
country in a phased manner by the end of 2014…it also gives the government the right to cancel
licences of cable operators who flout rules.”

The legislation ended the fight for ratings among channels to gain more advertisements. TRP
[television rating point] is a bane of the TV programmes as it leads to showing of obscene
materials and superstition and the bill addressed this issue, very well. It also has provisions for
effective monitoring of contents of the programmes aired through designated officers.

The new bill is neither anti-poor nor against small cable operators, as it has benefitted
customers by providing a la carte selection of channels and video-on-demand, while it has also
helped broadcasters and cable operators raise their advertisement and subscription revenue.

at the premises of the subscriber within the limits of authorisation made, on the choice and request of such
subscriber, by the cable operator to the subscriber.”
6
Hathaway Cable Datacom v. Union of India, 128 (2006) DLT 180.

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