Government previously delayed the launch of digital terrestrial television but now it has good reason to blame the broadcasters for the hold-up. Peta Krost Maunder investigates.
Television broadcasters have reached a stalemate in their dispute over digital terrestrial television (DTT) set-top boxes (STBs) and the minister of communications blames them for further postponing the revised 2015 launch date.
“While government is to blame for the slow progress on many of the issue relating to digital television, now the broadcasters are holding us back,” says minister Yunus Carrim. “They simply can’t agree on whether the decoders or STBs should have a control system or not.”
This drawn-out dispute between MultiChoice and SABC on the one hand and e.tv on the other is over whether or not to use conditional access (so they can choose to block or curtail viewing of channels) STBs or not.
e.tv wants government to include an encryption system in the STBs that the state plans to subsidise for up to five million homes, while MultiChoice and SABC are insisting on uncontrolled STBs. While e.tv says the SABC had been the main proponent of encryption, this changed when the cash-strapped national broadcaster signed an agreement (stipulating a precondition that SABC undertakes not to encrypt its channels) with MultiChoice over the SABC’s 24-hour news channel on the DStv bouquet.
“We brought them together in a facilitation process… in early September and by the middle of October it was clear that… they had reached an impasse,” says Carrim.
Frustrated, Carrim approached cabinet in December 2013 to find a resolution.
Cabinet decided the STBs should have the facility for encrypting (controlling) and individual broadcasters could decide whether to utilise this or not.
“The control in the STBs is necessary to protect our local electronics industry, create space for emerging entrepreneurs, encourage job creation and avoid our market being flooded with cheap, low quality imports,” Carrim says. “Also, we were threatened with legal action from broadcasters and manufacturers from several sides in the dispute and we felt that the best way to reduce the prospects of this was to give something to everybody. If we were to remove control from STBs altogether it would have meant that the South African Bureau of Standards [SABS] standard for STBs would have had to be changed and that would take at least another six months.”
This decision has neither solved the problem nor satisfied the broadcasters. In fact, it angered MultiChoice and SABC.
Calvo Mawela, MultiChoice head of stakeholders and regulatory affairs, was adamant the government has no power to prescribe or make binding decisions relating to STB controls. This is a reference to a High Court judgment in December 2012 in a case between e.tv and former communications minister Dina Pule around STB controls. “The minister must remain silent and let the free-to-air broadcasters make their own decision… We haven’t decided what we will do about this and we hope he doesn’t push us into taking it to court..”
While e.tv supports this decision, it doesn’t help much because there is still no agreement among broadcasters. “The minister has been quite clever with this decision because has still left it up to the broadcasters,” says Bronwyn Keene-Young, e.tv chief operating officer. “But the fact that MultiChoice won’t let things be [means] we may well be waiting past May and the elections and, with a new minister then in place, we may have to start from scratch.”
While e.tv is now adamant about controlled boxes, they weren’t back in 2008. And while SABC is now against controls, they too have changed their tune.
In e.tv’s 2008 submission, it maintained the envisaged inclusion of conditional access “raised critical constitutional, economic, financial and competition issues”. Now, Mawela says, “e.tv is a free-to-air channel but they say they are going to encrypt their channel and if our viewers want to watch e.tv, we will have to pay for the privilege.
“e.tv is trying to use the move to digital to enter the pay-TV platform,” claims Mawela. “They want to ride on the government’s subsidised STBs to launch their pay TV. This way, they won’t have to pay for subsidising their own STBs when they step into the pay market.”
Keene-Young says e.tv supports STB control partly because free-to-air broadcasters have a right to control their signal and – where appropriate – seek compensation from pay-TV operators to have their channels available on pay-TV decoders. “Why not? The most watched channels on DStv are SABC1, 2 and e.tv. So the free-to-air channels are in high demand and a subscriber wouldn’t buy an M-Net decoder if these channels weren’t part of the offering. Why should the free-to-air broadcasters allow M-Net to use their channels to roll out its pay-TV boxes without any compensation? Free-to-air broadcasters spend millions on local content and other programming that is in high demand – they have a right to seek compensation from a pay-TV operator, which will profit from the free-to-air channels being on their boxes. But if the free-to-air channels are not encrypted, they will be unable to seek compensation from M-Net.”
Keene-Young admits e.tv was initially opposed to controlled STBs but says, “in 2008, the SABC convinced us otherwise and we realised that a good, solid-managed platform is critical to the future viability of free-to-air TV and public service programming”.
While e.tv wants the controlled STBs, says Keene-Young, it insists the broadcasters must have control over encryption. This is why e.tv took the former minister to court in 2012 – Dina Pule wanted Sentech to manage it. e.tv was successful.
“Then last year, [SABC acting chief operating officer] Hlaudi Motsoeneng signed an agreement with MultiChoice over the 24-hour news channel on their bouquet and they made it a requirement that SABC never encrypts its channels.”
Keene-Young says encryption is critical to enable free-to-air operators to compete on an equal footing with pay-TV. “Say we want to do High Definition broadcasts on our DTT transmission, we have to reassure the producers that it is safe from piracy. Now the SABS specifications include an anti-piracy device in the STBs but there is no way of enforcing it without encryption.
Recently we acquired a cheap (unencrypted) DTT set-top box on the local market and we had no problem making copies of broadcasts from it. Without encryption, there is nothing to stop those set-top boxes from flooding the South African market.”
She says that these STBS will destroy the local manufacturing market because South African manufacturers will comply with the SABS standards but won’t be able to compete with the cheap foreign STBs.
Mawela disagrees, saying around the world broadcasters have chosen uncontrolled STBs for free-to-air channels. “Everyone around the world has debated this and rejected controlled STBs either on the basis of cost or being anti-competitive. It simply costs too much.”
He says that controlled STBs are not in the public interest because they stifle access to broadcasting, which is the best way to communicate with the public. “People should be able to get a decoder for as little as possible, plug it in and make it work. The more complex the process, the more the chance of failure,” says Mawela.
“By introducing conditional access, production of televisions will have to be localised. Because once digital televisions arrive, and it will be soon, South African TVs will not be able to pick up channels without a STB. Don’t you think that is foolish? We would be creating an island in this market.”
Mawela says uncontrolled boxes would have the opposite impact to what e.tv claims. “We support job creation, but we think currently the big manufacturers, Altech and Reunert, have established relationships with encryption vendors. By including this encryption, those companies will be ahead of the curve. Without the conditional access, any local manufacturer can make the boxes, as long as it fits the SABS standards.
“Besides, the department of trade and industry has already imposed a 15% duty on all STBs coming in, curtailing the cheap options.
“Claiming we arm-wrestled SABC into agreeing to uncontrolled STBs is a little opportunistic. Obviously they want as many people as possible to be able to view their channels and they don’t want there to be a hindrance. e.tv feels threatened that SABC is now in its exclusive 24-hour news space so they want to challenge and rubbish the deal.”
According to a statement from SABC, “Our services … have always been on a free-to-air basis and going forward this will also be the case for DTT.” It stated that conditional access STBs would put an extra burden on consumers and drive up the cost of the device.
“Whatever we do as a public service broadcaster, we must ensure that it is in the interest of the public and we believe that having no conditional access will mean that no South African can be denied their right to access.”
Mawela adds, “As for us paying free-to-air channels for their broadcasts, why would we do that if they are free? We will find a way to deal with this that won’t mean paying them. Around the world nobody will incur that cost. If you want to come on our channels, buy your own decoder.
“Anybody who wants to compete with us as a pay-TV broadcaster, does it on a level playing field. Invest in this and we will see how you compete with us.”
There is still no end in sight to this feud. DTT has to happen and has been delayed for years. Unless the broadcasters can agree on the STB issue, DTT could be further postponed.
This story was first published in the March 2014 issue of The Media magazine.
IMAGE: Wikimedia / Author: Johan Olsson (Teracom)