At the Scat 2003 Bombay workshop held in Mumbai earlier this week, several LMOs (last mile operators) expressed their concerns about CAS: the huge cost of encoders (Rs 100,000 for two channels); economically unviable to deliver add-on channels in a bouquet; not viable for small networks to offer a large pay bouquet and high cost of subscriber management software and support infrastructure.

HITS could be the answer they are searching for. HITS services can ensure that more than 150 channels reach the smallest and far flung LMO in addition to offering centralized control for authorization; subscriber management system collection of payments and audits along with interactivity with broadcasters. . In the US, HITS operators get up to 60 per cent distribution commissions.

Local cable operators (LCOs) however fear that customers will be addressed directly by the HITS operator, and broadcasters worry that the HITS operator will become the most important link in the distribution chain.

Addressing the concerns of the LMOs and LCOs, Satellite and Cable TV magazine editor-in-chief Dinyar Contractor detailed the advantages of the HITS system (head end in the sky): HITS can be delivered to any LMO; located anywhere in the footprint; it has zero encoder cost; no subscriber management system to be installed; no financial audit by pay channels; LMOs can assemble their own basic local tier; no hassles or interaction with broadcasters.

Contractor detailed the following technical specifications of the HITS system: * TV signals are received from various broadcasters * These broadcaster signals are descrambled using various IRDs to yield video and audio baseland signals for each channel * Each signal is digitally compressed to MPEG -2 formats; statistical optmisation may be done and eight to 10 channels can be compressed on each transponder * All channels are digitally encrypted using a common encryption system for CAS * The digital stream is QPSK modulated and uplinked whereas C or Ku-band downlink can be used for HITS LMO receives the QPSK modulated HITS signal from the satellite * Satellite signal is down converted in frequency (600 MHz) and these 600 MHz digital signals are mixed with the analog basic tier by the LMO and distributed * Each subscriber must have a digital set-top-box (STB) DVB-C which is authorized via satellite from the HITS operation centre.

It is believed that broadcasters will be unsupportive of HITS because there is no control over geographic locations: for instance an LMO in Assam can distribute the signal in Bangladesh. Approximately 80 government clearances are required and there is a question mark about Ku-band TV downlink.

Zee Telefilms is the only broadcaster which is propagating the cause of HITS. In fact, Siticable, a 100 per cent subsidiary of Zee Telefilms has plans to unveil the same in April 2003.

There is a general feeling that the HITS operator can poach into areas where other MSOs have traditionally conducted business. However, experts believe that MSOs will respect each other's domains and refrain from poaching.

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LMOs to get shares in pay revenues - say MSOs