Pay-TV regulations: pleasing everybody
The Independent Communications Authority of SA (Icasa) is drafting regulations designed to help break MultiChoice’s monopoly of SA’s pay-TV industry. Its decisions will have a long-lasting impact on the industry and the authority must tread carefully.
Zolisa Masiza is having a busy year. First, the Icasa councillor and his team had the unenviable job of sifting through and analysing submissions from 18 applicants that were hoping to receive licences to operate pay-TV services. Now he is tasked with drawing up the regulations that will have a direct bearing on the feasibility of the new entrants — there are four of them.
Key issues which must be resolved are whether the new entrants will be allowed to use MultiChoice’s DStv decoders or whether they’ll need to supply new equipment to their customers, and whether the regulator will intervene to guarantee the new players have access to major sports events such as cricket, rugby and soccer.
Icasa has issued a tender for consultants to help it determine how best to deal with content rights. It hopes to award the tender by March.
Telkom Media, the best-financed of MultiChoice’s new rivals and subsidiary of the fixed-line telecommunications operator, has made it clear that it wants Icasa to draw up regulations similar to those in force in the European Union. Sports rights in the EU have to be sold to more than one broadcaster per country. At the European Commission’s insistence, for instance, BSkyB’s long-standing monopoly over the English Premier League was broken in 2006 when Setanta Sports was awarded the rights to screen some of the league’s games.
SA’s new pay-TV operators will be hoping for a slice of the sports action currently available exclusively on DStv. MultiChoice tied up rugby long ago and its more recent deal with the Premier Soccer League (PSL) makes life that much more difficult for its competitors. In a move designed to head off its new rivals, the company paid R1,5bn for exclusive access to PSL games for five years.
It’s not only the new operators that are making demands of Icasa. The SABC wants the new entrants to be forced to carry its channels — and to pay for the privilege of doing so. Several of the new licensees have balked at this, and rightfully so. Walking on Water Television says it won’t carry content that contradicts its Christian family values’ programming — and why should it?
Some of the movies and programmes broadcast on the SABC, especially late at night, are adult in nature. Other broadcasters have indicated that they don’t want to be forced to carry a competitor’s products. Carrying the SABC channels will add significant costs to the new entrants — both in fees they pay the public broadcaster and satellite costs — and these costs will have to be passed on to consumers.
Interestingly, Telkom Media has asked the regulator to give other operators access to the SABC’s archives, arguing that the material is a state asset that ought to be shared with the public. This is a less clear-cut situation, especially given that the SABC is mostly funded through advertising rather than by government subsidies and licence fees. Still, Telkom Media has a strong argument.
Then there’s the looming bunfight over decoders. The new entrants are likely to want to be able to use their smart cards in MultiChoice’s decoders so as to avoid the expense of putting new equipment in the field. But this could prove technically challenging and could ultimately harm innovation. Icasa has sensibly asked all licensees to propose how best to deal with the matter before proceeding.
Ultimately, the authority would be well advised to tread cautiously. Light-touch regulation is always preferred in a competitive market, be it telecoms or broadcasting.
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