AS THE PCTA sees it, one way to keep operating costs down given the steep price of programs is to adopt tiered programming. Dabao's analogy of this scheme is of a restaurant where there's a buffet table offering 20 different kinds of meals.

"Right now, I am charging P300 for buffet meals every month. But because prices of meat, cooking oil and other ingredients have gone up, what should I do? I can reduce the number of meals to 10 and still charge P300. Or I can retain the 20 meals but increase the cost to P500. But in both instances, people might complain," he says.

A better way, he explains, is to divide the buffet table into three. For those who can afford to pay P300, they get 10 meals from the basic table. If you add P150 to that, you can have five more special meals from the second table. Add another P150 and you get five more from the third table. If you have P600, you get to be a glutton and partake of all the food.

The range of cable program packages can be developed following this approach. But that would entail the use of quite expensive equipment in addressable set top boxes installed in subscribers' homes. "For somebody like SkyCable, an initial capital outlay of about P300 million will be needed for tiering and the boxes," says Dabao. "Each box is worth P1,000. So if you have 200,000 subscribers, that's P200 million outright."

For small players, a minimum investment of P5 million is required for at least 5,000 subscribers. The scheme becomes less feasible though to those with fewer subscribers.

Deploying these set top boxes or decoders will also be able to address what has been the other bane of cable TV operators — signal piracy. With this technology, operators can encrypt their programs so that only the legitimate-paying cable TV subscribers equipped with the set top box can watch the programs. Without the box, those with illegal and unauthorized connections will not be able to view a thing.

The extent of signal piracy (or signal theft) in the country is unknown but SkyCable and PCTA's respective surveys show that for every one legal subscriber, there is one enjoying cable TV service via an illegal, physical connection to the cable lines especially in areas where the activity is rampant. A lifetime cable TV service from an illegal connection can be had for a one-time fee of P1,000-3,000.

Another form of signal theft is by broadcasting channels without the permission of the program providers. Revenue lost to signal thieves, industry observers say, could easily run up to millions of pesos in just a month.

The illegal taps also affect signal reception of paying subscribers who are inconvenienced by the poor picture quality that results from the external noise generated in the process. This, in turn, brings up expenses on system maintenance on the part of cable TV operators.

Some local governments have stepped in to help the cable operators fight the signal robbers. Local councils in Meycauayan and Obando in Bulacan, Antipolo and Makati, for instance, have already enacted ordinances penalizing illegal cable connection.