Digital TV Smackdown
South Africa’s migration from analogue to digital television could come to a grinding halt following a legal challenge by e-tv.
Rosin Wright Rosengarten attorney’s, acting on behalf of e-tv, lodged an urgent application for an interdict last Wednesday in the South Gauteng High Court.
e.tv has requested that the regulations governing the digital terrestrial migration, which were published by the Independent Communications Authority of South Africa (Icasa) on July 3, be set aside pending the outcome of a full review by the court.
In the founding affidavit, e.tv’s chief operating officer, Bronwyn Keene-Young, described Icasa’s regulations as “procedurally unfair”, “irrational” and “unreasonable”, and claimed that they contained errors of law.
This call for a review by e-tv could delay the digital migration well into next year by tying it up in court, which could result in government and Icasa extending the period of dual Illumination – running both analogue and digital platforms – beyond April 2012.
Lara Kantor, the chairperson of the Digital Dzonga Advisory Council, which was appointed to manage the migration process, said that the councils still had to sit down to consider the legal challenge by e-tv and could not comment until this meeting had taken place.
Points made by Keene-Young in the founding affidavit include:
- That the regulations regarding signal distribution are anti-competitive and prejudicial against e.tv;
- That the regulation proposes onerous and prohibitively expensive obligations to provide simultaneous audio of local programmes in at least three local languages;
- That the regulations provide for an unrealistically short period of time to achieve digital migration;
- That the regulations define the period of dual illumination to have begun eight months before they were published;
- That Icasa failed to consult properly during the drafting process of the regultions and introduced final regulations that had not been seen by stakeholders;
- That the regulations do not cater for a proper public process for approving new public channels; and
- That the regulations make reference to penalties for contravening regulations that don’t exist.
Although Keene-Young’s founding affidavit comprehensively pulls Icasa’s regulations apart, pointing out glaring inconsistencies and even some gaping holes in the regulations, it is clear that the real bone of contention for e-tv is that it will be severely disadvantages when it comes to negotiating signal distribution.
There are only two signal distributors in South Africa – Sentech, owned by the stats, and Orbicom, owned by Multichoice Africa.
Keene-Young claims that Orbicom has informed e.tv that it will offer services only to the Naspers group and refuses to offer services to any other terrestrial broadcaster. This leaves e-tv with only one option – Sentech.
“In the circumstances, Sentech is operating in this market with control over an essential facility,” said Keene-Young. “The effect of the regulations is inherently anti-competitive.”
“They condone behaviour by Sentech that is essentially monopolistic, conferring on it a virtually unlimited discretion to charge what it likes for the use of an essential facility,” she added.
Keene-Young argued that Icasa has failed to regulate the tariffs charged by Sentech and so it can charge what it likes for its services.
She also said that Sentech intends to charge 70% of what it charges to distribute an analogue channel for a digital channel. This is despite the fact that digital television can provide eight to nine channels using the same spectrum allocation that one analogue channel would occupy.
Keene-Young argued that the prices quoted by Sentech are “hugely inflated” and are not comparable with pricing in international jurisdictions.
“Sentech should not be permitted to profit from the transition to DTT [digital terrestrial television] at the expense of the incumbent free-to-air broadcasters,” said Keene-Young.
Keene-Young also said that this excessive pricing would have implications for the new digital incentive channels, which broadcasters are encouraged to provide to encourage South African consumers to purchase their set-top box as soon as possible. The set-top box will convert the digital signal back to analogue, so it is compatible with old analogue television sets.
Because this is costly, the regulations envisioned the creation of additional digital channels as an incentive.
On top of the signal distribution costs of broadcasting a new channel, Keene-Young said it would conservatively cost R240-million a year to source programming for each new channel.
“While these incentive channels will eventually earn advertising revenue, this is entirely dependent on there being a sufficient number of viewers to make the new digital channels attractive for advertisers,” Keene-Young said. She added that they will probably break even only once more than five million of South Africa’s 9.1-million television households are digital.
Another sticking point is the regulation that requires the terrestrial broadcasters to provide threee different language soundtracks for all local content. Keene-Young said this was “Prohibitively expensive”
and “not financially viable”.
She said e.tv’s cost of local programming would increase by up to 20% and a regulation such as this could act to disincentivise broadcasters from commissioning local content.
The application by e-tv is set to be heard on September 15 and it is unclear whether Minister of Communications Siphiwe Nyanda, Icasa, Sentech, Orbicom, the SABC or the other respondents will contest it.
Sentech’s head of regulatory and government affairs, Dingane Dube, said that it had received e.tv’s court papers and was still seeking legal advice and considering its options.
Tiyani Rikhotso, an acting spokesperson for Nyanda, referred queries to Icasa, but all Icasa would say was that it had received the documents and was reviewing them.
eTV and Digital TV battle – comments and views
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