Scatmag.com

August 2016

DIGITAL CATV: A TELECOMMUNICATIONS NETWORK

Not Only STBs But The Entire Digital Cable TV Network Is A 'Telecommunications Network.'


Cable TV technology has leapfrogged over the past 5 years into the digital realm, and the government has mandated that analog Cable TV must cease to exist after 31 December 2016.

The signals in current Cable TV networks are digital throughout the network.

Signals move within a Digital cable TV headend as IP (Internet Protocol) signals, which are exactly the same as digital communications data packets transmitted on the internet.


GLOBAL IMPORTS / EXPORTS

The World Trade Organization (WTO) is a global, international body set up to unify & facilitate trade between nations. It succeeds the General Agreement on Tariffs and Trade (GATT), established after World War II.

India is one of the earliest signatories of GATT (8 July 1948) and joined the WTO on 1 January 1995 when the WTO was established.


HARMONISED SYSTEM

The WTO has formulated a uniform system of categorising various items for import and export, called the Harmonized Commodity Description and Coding System ("Harmonized System"). The system must compulsorily, be followed by all WTO members, including India.

The Harmonized System consists of 21 sections covering 99 chapters. The relevant Section and Chapters for us are:

♦ Section XVI (Chapters 84-85, electrical machinery):

Chapter 8517 62 refers to "Machines For The Reception, Conversion & Transmission Or Regeneration Of Voice, Images Or Other Data, Including Switching And Routing Apparatus" and includes:

8517 62 30... Modems (Modulators- Demodulators)

8517 62 70... Multiplexers, Statistical Multiplexers

8517 69 30... Routers

8517 69 50... Subscriber End Equipment

8517 69 60... Set top boxes for gaining access to internet.





WTO FOR DIGITAL HEADENDS

As a member of WTO, India is obliged to follow the WTO's Harmonised System of classifying goods for Import (& export).

Recently, the DRI and the Indian customs have put the industry in turmoil. They have reportedly demanded huge customs duties on Cable TV Digital Headend Equipment, by refusing to classify it under 8517 62 70 (Multiplexers) and 8517 69 50 (Subscriber End Equipment).

Reports are that the customs want to classify Cable TV Headend imports as: 8528 73 90: 'Others'

Interestingly, reports are that the DRI wants to categories these imports differently, i.e. under 8529 9090 which refers to part of equipment under 8528.


SECTION 8528

The WTO defines Section 8528 items as: "Monitors & Projectors, Not Incorporating Television Reception Apparatus, Reception Apparatus For Television, Whether Or Not Incorporating Radio-Broadcast Receivers Or Sound Or Video Recording Or Reproducing Apparatus."

A closer look at these item listed in detail are TV sets & all types of communication antennae. Clearly Cable TV Headend and distribution equipment are Not communication antennae or TV Sets (Section 8528).


Clearly Cable TV Headend & Distribution Equipment Are Not ‘Communication Antennae Or TV Sets (Section 8528).’


DIGITAL CABLE TV EQUIP: 8517

With the government directive to shut down all analog Cable TV transmissions by 31st Dec 2016, all cable TV equipment imported is for Digital Cable TV only.

A digital Cable TV headend deals exclusively with IP (Internet Protocol) digital telecommunication signals only.

Even the output from a digital headend, via an Edge QAM modulator is a digital, telecommunication signal.

Hence, Both the Digital Headend and the Transmission / distribution equipment are Digital T e l e c o m m u n i c a t i o n equipment, as categorised by the WTO under Section 8517 62 (Multiplexers) and 8517 69 50 (Subscriber End Equipment).

The digital STB receives this digital telecommunication signal and converts it to an analog signal suitable for a TV set.



Signals In A Digital Headend Are Fully IP (Internet Protocol) Telecommunication Signals.


INDIAN GOVERNMENT CLASSIFICATIONS

It is relevant to note 2 very important circulars that have been issued by the Department Of Telecom & the Finance Ministry. We have reproduced these in Figures 1 & 2.


DOT CIRCULAR

The Department of Telecommunications is under the Ministry of Communications & Information Technology. Its Vision statement is "To provide secure, reliable affordable and high quality converged telecommunication services anytime, anywhere for an accelerated inclusive socio-economic development."

Digital Cable TV is clearly a 'converged telecommunication service' and the Dot has issued its circular dated 30 June 2014 (Figure 1).

The circular states that the Telecom Engineering Centre "has confirmed that Set Top Boxes (STB) are a part of 'Telecommunications Network."

All such circulars are very carefully worded and it is particularly relevant to note that the circular does not merely declare the STB as a telecom product, but the entire network to which the STB is connected is a 'Telecommunications Network.'



The DoT Circular Declares That The Entire Network (CATV Distribution & Digital Headend) To Which An STB Is Connected is "PART OF A TELECOMMUNICATIONS NETWORK"



♣ Ministry of Finance

♣ Ministry of Communications & Information Technology

♣ Ministry of Information & Broadcasting

♣ Ministry of Micro, Small & Medium Enterprises

♣ Department of Telecommunications (DoT)

♣ Telecom Engineering Centre (TEC)

♣ DeitY: Department of electronics & information Technology

List Of Ministries & Govt Bodies Confirming That STBs are connected to a Telecom Network. (DoT & Finance Ministry Circulars.)


Table-1 provides a list of various Ministries and government Departments (Table -1) that have endorsed the DoT circular, stating that not only is the STB a Telecom product, but the entire network to which an the STB is connected is "Part Of A Telecommunications Network."

Telecommunications Networks are defined by WTO classification under Section 8517.

Given these facts and the widespread approvals by various ministries, including the Finance Ministry, it seems unusual that the DIR and Customs are reportedly refusing to accept import of all Digital Headend & Cable TV distribution equipment under Section 8517, under which they have been categorised even by the Exporting Countries, in keeping with the global WTO classification.