Sources in the cable industry told indiantelevision.com yesterday that Swaraj has slated a meeting with MSOs and cable ops early next week to discuss CAS and, possibly, the pricing of the basic tier of free to air channels.

"The full agenda of the meeting is still being finalised," a senior government official explained when asked about the meeting.

In a bid to implement CAS through headend in the sky (HITS) project, another Subhash Chandra company, ASC Enterprises Ltd. has already sought permission to have a teleport licence which can also be used as and when Agrani puts together a KU-band direct-to-home platform for India.

The issue of basic tier of service is still contentious as cable ops have been petitioning that the basic tier should cost at the rate of five rupees per channel, while the MSO-broadcasters combine would prefer the basic tier to cost as low as possible.

"If the basic tier pricing is low (preferably sub-Rs 100) , then it'd be easy to push more numbers of pay channels to the cable subscribers who will be mentally totaling the monthly outgo for cable service," a representative of an MSO said.

Moreover, the cable ops have also been saying that CAS implementation would require fairly high investment at the cable headend level even if it were in analog mode initially.

Taking up this point is Zee Telefilms' cable arm Siti Cable, which, in a presentation to the government, has said that if CAS is implemented through HITS, then investment at the individual cable headend level will come down sizeably and would not put additional financial burden on cable operators.

The industry is still divided over the costing and investment needed to rollout CA , but most stakeholders do agree grudgingly that there are some shortcomings in individual headends - in the first phase in the four metros - trying to bring about addressability.

The issues involved here include the following:
* Expensive solution for MSO/cable operator
* Problem of interoperability
* Difficulty in monitoring individual CA installations

Individual headends going in for CA will be expensive in the sense that on each channel between Rs 75,000 to Rs 100,000 would have to be spent on headend equipment for analog solution. Digital solution would be even more expensive. This fact was brought up by participating cable ops in a meeting of the costing committee which is headed by Rakesh Mohan, joint secretary (broadcasting) in the I&B ministry.

Multiple type boxes would have to be installed in the field at customer premise and individual CA implementation may not lead to the transparency that the broadcasters had been looking for.

With pay channels unlikely to go FTA in a post-CAS regime, more free to air channels may be introduced by broadcasters and this will put pressure on cable networks to upgrade to accommodate the newcomers. This may also lead to pressure on the channels of the national broadcaster (Doordarshan) as they will have to fight more for space on the cable spectrum.

To save on capital expenditure, the cable ops may decide to carry only certain channels in the basic tier as the government will only decide on the minimum number of channels that should be carried as part of the basic tier. This may, again, lead to deprivation of choice as far as consumers are concerned, Siti Cable contends.

What is HITS? In short, pay channels are decrypted and aggregated at a central facility, then the channels are turned around with a common CA inserted at the master digital headend and uplinked again. The channels are received at various cable headends where they are transmodulated and the QAM (the modulation used in cable business) stream of digital channel is combined with analog channels, modulated locally, at the cable headend.

The combined channels go to a subscriber's set-top box (STB) and get decrypted for viewing. The non-STB homes continue to receive FTA channels via cable.

How can the HITS project turn out to be a comparatively cheaper option? According to a senior executive of Siti Cable, "The cable operators are likely to accept it faster as it will save them the cost of headend upgradation to accommodate the growing number of channels and they will also save the cost of installing CA for their individual headends."

The proponents of HITS have argued that a platform covering 7,000 headends can de done with a single subscriber management system (SMS) and CA. More importantly, there will be cost benefit as each headend would require investment of around Rs 60,000 on equipment for about 40 pay channels.

According to a distribution executive with one of the big broadcasters, all the major MSOs with operations covering different regions in the country are coming round to the HITS idea. This would essentially mean the Star affiliated Hathway and Hinduja Group MSO INCableNet hopping aboard. However, MSOs that operate essentially out of one area (like RPG in Kokata and 7 Star in the western suburbs of Mumbai) would not find HITS so hot, he says.

Queried as to the kind of investment that would go into such a headend, he gave the example of Siti which would have its central headend at the Noida uplinking centre near the Capital. Taking transponder costs into account he said in the present scenario with about 40 pay channels, total cost would work out to about Rs 2,500 million.

The advantage of course is that if one wanted to service a headend, say in Ahmedabad in the western state of Gujarat, the additional cost is basically for the transmodulator (through which the feed goes to the individual subscriber set top boxes). This would cost about Rs 400,000 per headend, he said.

HITS-type projects have been tried elsewhere in the world too - AT&T, for example, has been operating HITS in the US since 1994 for big independent cable ops. Siti Cable has said that it would like other stakeholders of the industry, the broadcasters and cable ops, also to participate in the project as equal shareholders because issues like subscriber management system too have to be taken care of.

But when indiantelevision.com asked Star India whether it is open to participating in the HITS project if Zee companies get the necessary permission for the go-ahead, the reply was non-committal.

"We cannot say whether we will join the project and support CAS through HITS or not. Nobody has approached us yet formally on the issue," Sameer Nair, chief operating officer of Star India, told indiantelevision.com on Wednesday after addressing a press conference in Delhi on new programming initiatives of the company.

Will HITS be a hit in India? indiantelevision.com believes it will be. But there may well be more than one such superheadend operating.

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