New model for digitalising cable TV proposed

In a move that could lead to the fastest and most cost-effective digitalisation of cable services and the implementation of the conditional access system (CAS) in the country, the Telecom Regulatory Authority of India (Trai) has floated a consultation paper on the Headend In The Sky (HITS) model.

This model involves delivery of digital television signals directly to cable operators via satellite. Cable operators then pass on the digital channels to consumers using cable lines.

To operate this model, a multi-system operator will have to obtain a teleport licence (licence to uplink signals). Teleport licences are generally required by broadcasters seeking to uplink their channels from India.

The Trai paper has asked all stakeholders, including broadcasters, cable operators, multi-system operator and direct-to-home companies to respond to the scope of HITS operations, its policy framework and whether it should be allowed to operate in Ku band (in which direct-to-home companies offer their services) also.

Trai has also sought a response on the foreign direct investment (FDI) limit for HITS and raised questions like whether there should be a licence as well as entry fees for operating HITS. Stakeholders have to respond by August 10.

The HITS model has generally faced opposition from multi system operators as they have demanded a neutral player (like Doordarshan) as the provider of HITS as opposed to any private company. Currently, the Zee group has the necessary permission to operate HITS.

The proposed model also raises questions about the ongoing roll out of the conditional access system, which Trai says is expensive and time consuming.

According to the Trai paper, the HITS model can undertake digitalisation of cable channels in India at one go, unlike the CAS rollout, which is costly and takes time.

With no policy framework for operations, the HITS model raises several questions. It directly competes with the fundamental technology of direct to home (DTH) services, which is highly regulated.

DTH services also use a satellite to offer digital channels to consumers using only Ku band transponders while HITS can be offered on both Ku and C-band transponders.

"HITS could, theoretically, digitalise cable transmission in the whole country with a capital expenditure of Rs 1,215 crore and a recurring cost of Rs 50 crore per annum, as against the capital expenditure of more than Rs 15,000 crore for conventional terrestrial digitalisation," Trai said in the paper.

Under HITS, cable operators will have to lease transponder space on a dedicated satellite, acquire television channels from broadcasters, uplink them to the satellite and download them and then pass it on to the consumer via cable lines.

In conventional cable distribution process, broadcasters give their channels to multi system operators, who then pass on these channels to the local cable operators.