News Television (India) Ltd, the authorised wing of Star TV in the country, has started distributing contract documents among cable operators to digitally encrypt Star Plus, Channel V and Star Movies (which was previously in the analogue mode).

Industry sources said that this would mean that the operators would now require to install individual digital integrated receiver decoders (DGIRD) for each of the channels at a cost of Rs 3,000 per decoder.

Industry watchers, however, felt that the union information and broadcasting (I&B) ministry's helplessness regarding such a development may ultimately lead to the demise of independent cable operators. Officials in the ministry said that as long as it is on the C-band, itis difficult for the ministry to initiate any preventive action.

Experts are of the opinion that till the Broadcasting Bill is passed, the channel operators would have total control on the local delivery service operators through the system of digital encryption, which functions on a smart-card basis. "But reverse will not be true as the cable operators will have no control on the channel operators," they added. In such a situation, the experts felt that the independent cable operators may face grave undercutting by bigger cable companies and will be left with no option but to become the latter's franchisee.

Interestingly, though the cable operators will be at the mercy of the channel operators following digital encryption, they will be bearing the responsibility on the latter's behalf since till date there is no law in the country which covers them, experts say.

Significantly, in a case addressing a similar issue, the Monopolies and Restrictive Trade Practices Commission (MRTPC) on Thursday upheldESPN's reply to a case filed against it with regard to charging extra for Star Sports.

ESPN had argued that contrary to the cable operators' plea that ESPN is indulging in restrictive trade practices by charging extra for Star Sports, which is owned by the same joint venture company, the former is well within its rights to do so since its contract for the channel ESPN does not cover Star Sports. The cable operators are further apprehensive that ESPN can dictate terms with the Sharjah Cricket tournament featuring New Zealand, Australia and India which started on Friday.

Earlier, the cable operators had to give in to ESPN's decision of hiking its per subscriber fees on the eve of Sahara Cup in Canada.