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Update Legal problems for Sth African TV - 01-September-2009, 11:00

Legal problems for Sth African TV

Chris Forrester

A clutch of writs has been issued in South Africa, posing questions for its media regulator, ICASA. The legal actions could delay the local analogue to digital TV switchover.

BBC Monitoring is reporting that South Africas new broadcasting regulations face a number of challenges. One action is quite likely to delay digital migration far beyond the current official deadline of April 30 2012.

The Independent Communications Authority of SA (Icasa), which published its digital migration regulations in July, has had to perform a difficult balancing act, says Business Day, a local publication. Should it compensate existing broadcasters for the costs of switching to digital - by granting new channels - or should it use this opportunity to introduce competition in a highly regulated market? As the regulations show, Icasa has opted to incentivise existing broadcasters.

However, this hasn't stopped from applying to the high court in Johannesburg for an interdict in respect of the regulations, says the report. In her affidavit,'s chief operating officer, Bronwyn Keene-Young, says that, if applied, the regulations will give rise to fundamental unfairness. Keene-Young says would be forced to contract with Sentech for its signal distribution, thus eroding its bargaining power.

Because the regulations define the period of their operation as having begun more than eight months before the regulations came into force, broadcasters risk a R500,000 fine for noncompliance, she says. She also objects to the requirement that broadcast in three languages simultaneously. Keene-Young adds that Icasa did not properly consult prior to drawing up the regulations. This particular case will be heard on September 15.

The second legal challenge comes from a consortium led by the National African Chamber of Commerce (Nafcoc). Nafcoc complains that Icasa failed to properly consider competition concerns. Members of the consortium would reportedly be interested in setting up pay-TV operations.

Nafcoc president Buhle Mthethwa says in her affidavit that Icasa's regulations will stifle competition in pay-TV, that the public participation process was flawed, and that Icasa did not take black economic empowerment into account.

The regulations as they are currently shaped set aside one multiplex for public broadcasting services, mainly the SABC [South African Broadcasting Corporation], while a second multiplex is reserved for commercial free-to-air broadcasters such as, and a third multiplex is for pay-TV operators such as M-Net. has been granted 60% of the second multiplex and M-Net 50% of the third multiplex, with new entrants to be introduced after digital migration is complete. The regulations allow M-Net, in effect, to control the third multiplex and to operate in a manner that prevents competition, Mthethwa says. M-Net is able to cross-subsidise its offer by using existing content and archives and by leveraging existing content rights, which will make it harder for new entrants to match M-Net's offer.

M-Net is able to offer its own subsidised set-top boxes which have the potential to destroy the market for new entrants as it would be able to control pricing in the digital television market. Together with signal distributor Orbicom, M-Net could set prohibitive prices for those needing capacity on the third multiplex, Mthethwa adds.

Four new entrants have been granted licences to broadcast pay-TV - e.sat, Telkom Media, On Digital Media and Walking On Water Television - but to date, none has managed to launch.

Mthethwa says the inability of new satellite licensees to establish themselves is caused by the monopoly power of M-Net and its sister company, MultiChoice, in the pay-TV market.

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