Digital TV battle – let’s cut the crap

During the last few weeks, MultiChoice and the Ministry of Communications have been taking potshots at one another over an important technical detail in South Africa’s digital terrestrial television (DTT) specification.

The disagreement centres around the inclusion of a “set-top box control” system in South Africa’s set-top box (STB) specification.

Unfortunately, the actual merits of the argument have been lost in general, unqualified statements, and emotional appeals.

Getting to the truth is not simple and the full implications of the decision are complex.

The place to begin then, is a common understanding of what a set-top box and an STB Control system is.

Why would you need an STB?

DStv, M-Net, StarSat, OpenView, and Freevision decoders are all examples of STBs.

The main function of the digital TV STB will be to convert South Africa’s new digital terrestrial television signal into something that can be displayed on your existing TV.

Those people who use a normal antenna to receive their television signal will have to get an STB. This is because South Africa will be migrating from an old analogue broadcasting standard to a digital standard called Digital Video Broadcasting – Terrestrial version 2 (DVB-T2).

In slightly more technical terms, the STB will receive the DVB-T2 signal and output the broadcast via HDMI or RCA connectors to a monitor or television set.

If you are a satellite TV viewer (whether subscription-based or not), you won’t have to worry about getting an STB.

Just because you won’t need an STB doesn’t mean the issue of STB Control won’t impact you, however. Your taxpayer rands and more capacity for mobile broadband are at play here.

What is STB Control?

In general, STB Control refers to a system that involves encrypted or otherwise modified television broadcast signals and which may include “conditional access”.

Conditional access is a mechanism typically used by pay TV providers to restrict which channels you have access to, or to cut you off entirely if you cancel your subscription or don’t pay.

In this case government’s stated intentions is to use the STB Control system to prevent decoders that were subsidised by the South African taxpayer from being bought up by the unscrupulous and sold cheaply elsewhere.

Government will be subsidising 70% of the cost of an STB for 5 million of South Africa’s poorest households.

The dispute

Before trying to make sense of the various arguments of the opponents and detractors of STB Control, it is important to first understand the details of the dispute.

Ignoring all the history for the moment, Cabinet approved a policy amendment towards the end of 2013 that let broadcasters decide for themselves whether to use STB Control.

However, the policy did not change the South African National Standard (SANS) that requires all set-top boxes to include a control mechanism, SANS 862:2012 (Edition 2).

MultiChoice, among others, wants this requirement removed from the specification, while E-tv, among others, likes it just where it is.

To try and understand why, let’s go through the points of argument one at a time.

1. How long would it take to remove STB Control from the SANS spec?

Summary: If it would really take 34 weeks to remove STB Control from the SANS spec, then it is unreasonable to demand it be revisited. However, MultiChoice said it would take only 8-9 weeks.
Yunus Carrim portrait
Yunus Carrim

One of the big reasons to accept the fact that STB Control would have to remain in the SANS specification is that it would apparently take a whopping 34 weeks to remove.

Minister of Communications, Yunus Carrim, said he was provided the timeframe in a letter from the South African Bureau of Standards (SABS).

However, MultiChoice’s head of stakeholder and regulatory affairs, Calvo Mawela, said that this is a misinterpretation of the letter from the SABS.

He said that the 34 week timeframe applies to new work items, which the set-top box standard is not.

“STB Control has been sitting with the SABS since February 2012, under committee TC74,” Mawela said.

Revisiting the matter of STB Control is also not comparable to the review of the DTT standard which was initiated by the Department of Communications in 2010, Mawela said.

He said that removing STB Control from the STB standard would take around 2 months.

A shortened public consultation period has already been discussed, Mawela said, so they would only need to open the amendment for a 30 day public consultation period.

Add 4 weeks to handle logistics and administration, and the timeframe is closer to 60 days, not 34 weeks (238 days), he said.

2. What would STB Control cost?

Summary: E-tv and the SACF argue that STB Control won’t increase costs to consumers significantly. MultiChoice, citing its many years of experience with set-top boxes and STB Control mechanisms, disagrees.
Imtiaz Patel portrait
Imtiaz Patel

One of the arguments against STB Control is that it adds unnecessary cost to the STB.

In an interview with MyBroadband, MultiChoice group CEO Imtiaz Patel said that the hardware and software required to handle encryption would end up costing far more than is being let on.

Proponents of STB Control such as E-tv and the South African Communications Forum (SACF) have argued that the per-box cost should not increase by more than $2.

The SACF has also provided media with a letter from Nagra, a STB Control system provider, who agreed to waive their standard royalty.

South African manufacturers would only need to pay for Nagra’s certification process. At $85,000, this is not cheap, but Nagra said this cost is once-off and only payable upon successful certification.

MultiChoice’s head of stakeholder and regulatory affairs, Calvo Mawela, remained sceptical, however.

He argued that the makers of such business-critical systems know that once you’re using them, it is difficult to switch to another provider.

“Whenever they add a feature, or when you want to integrate something new, they charge you. That’s how conditional access vendors make their money,” Mawela said.

Calvo Mawela portrait
Calvo Mawela

“Once [they] get you, they can milk you,” Mawela said.

“Whenever you want to do software downloads, or do a new integration, they charge you. That’s how conditional access vendors make their money,” Mawela said.

Another cost factor that should be considered is when the encryption gets hacked, Patel said.

He said that you should expect the encryption to get hacked every 5–6 years, at which point you have to redo the STB’s software and roll out an update to your userbase.

Six years ago it cost MultiChoice R100-million to do this, Patel said.

The Department of Communications (DoC) said in a press statement last year that broadcasters that want to use the control system will have to pay the government. This will include all other costs related to the control system, the DoC said.

Details of how this scheme will work have not been revealed. Considering the high court ruling that free-to-air broadcasters get to decide which STB Control system to use and who will operate it, this may be more complex than it appears on paper.

3. Which side would win in a court case?

Summary: Government faces potential legal action if it changes the SANS spec, or if it keeps it as-is. The Minister said he has weighed both prospects to decide which is most likely to win.

Unfortunately the supplier costs and time needed to change the spec are not the only cost and time considerations to the STB Control issue.

According to the Department of Communications (DoC), there could be a legal challenge to government by certain manufacturers who have already spent money on control system certification and STB designs that include control systems.

This is because government issued a tender for its subsidised boxes that included STB Control, which these manufacturers bid on, the DoC said.

According to the DoC, the specification for a STB Control system was included in the tender based on the requirements of the last amendment to the Broadband Digital Migration Policy (of 13 February 2012), SANS 862:2012 (Edition 2), and the ­­tender on Government subsidised DTT STBs of 2012.

In an interview on 702 Talk Radio, Minister of Communications Yunus Carrim said that they also face potential legal action if they stick to their current course of action.

“I had to weigh which is more likely to win in a court,” Carrim said.

4. Will STB Control make it impossible to integrate digital tuners into future TV sets?

Summary: The digital TV STB is typically an interim measure used during the migration from analogue to digital TV. MultiChoice warns that our STB will become permanent if STB Control remains a requirement.

Like televisions currently on sale in South Africa can almost all receive our existing free-to-air analogue TV broadcast, so it is expected that future TVs will be able to receive our new digital TV signal.

The analogue tuners that are usually integrated into our TVs should eventually be replaced by DVB-T2 tuners in newer models.

Television manufacturers are already producing sets capable of receiving DVB-T2 broadcasts for other markets.

However, MultiChoice argues that if STB Control continues to be a requirement, televisions capable of receiving South Africa’s DTT signal without a set-top box will not materialise.

MultiChoice’s head of stakeholder and regulatory affairs, Calvo Mawela, said that this is because the encryption that accompanies our STB Control system would essentially be unique to South Africa.

Our market is too small for manufacturers to be willing to make a model of their televisions that can receive those free-to-air channels that South African broadcasters elected to encrypt, Mawela said.

Minister of Communications, Yunus Carrim, has said that many other countries are using, or are about to use the same system as South Africa. These include Zambia, Uganda, Botswana, Ethiopia, Seychelles, Malawi, Nigeria, Namibia, Tanzania, Kenya, Malaysia, Ukraine, Belarus, and Slovakia.

He did not address the issue of whether the DTT STB would become a permanent fixture in the homes of those without a satellite system, however.

Instead, Carrim only said, “Poor people will not be able to buy new digital televisions for years to come.”

MultiChoice Group CEO Imtiaz Patel said that the dependence of South Africa’s poorest people on a set-top box that is more expensive than it needs to be is an important consideration, because they break every 3–4 years.

Patel argued that as a pay TV supplier, MultiChoice has significant experience with set-top boxes. “We live with these boxes. It is our history,” Patel said.

Samsung, LG, Hisense, and Sony were asked whether they would be producing a TV with an integrated tuner for the South African market, but they did not respond by the time of publication.

5. What will STB Control do to boost local manufacturing?

Summary: MultiChoice argues that STB Control will not prevent foreign electronics manufacturers from competing against the local industry.

A number of proponents of STB Control argue that it will help protect South Africa’s local manufacturing industry.

In essence the argument is that local companies would not be able to compete on price against overseas manufacturers with cheaper labour and more advanced industrialisation than South Africa, and must be protected.

According to the SACF and E-tv, STB Control would give local companies a leg up against international competition.

MultiChoice group CEO Imtiaz Patel said that the argument doesn’t hold water, however.

Patel said that under World Trade Organisation (WTO) regulations it will not be possible to prevent international manufacturers from building boxes that conform to South Africa’s standard.

STB Control will therefore not isolate local manufacturers from international competition, Patel said.

Add to this the cost of certification and potential future royalties or licensing costs, and this does raise the question of whether smaller local manufacturers will even be able to participate in the STB industry.

6. Will STB Control help standards-enforcement?

Summary: E-tv has said that STB Control will help ensure that STBs conform to the rest of the SANS specification, easing the burden of standards enforcement. MultiChoice has argued that non-compliant boxes could still be made that support our STB Control scheme.
Non-compliant DVB-T2 set-top box in South Africa
Non-compliant DVB-T2 set-top box in South Africa

E-tv’s head of new business and platforms, Maxwell Nonge, said in an interview that they believe STB Control would help regulators enforce South Africa’s set-top box standard.

The argument is that if illegal imports that don’t conform to our standards simply don’t work here, the burden of policing conformance is lightened.

This is an especially attractive proposition given the reports of how thinly spread our regulators already are.

However, Patel said that even with STB Control, compliance will have to be actively monitored.

As with the the previous point, he argued that WTO regulations will make it possible for any manufacturer to build a box that conforms to the requirements our STB Control system, without conforming to the rest of the SANS specification.

7. What is the relationship between encryption and access to premium content?

Summary: E-tv has argued that it needs encryption and digital rights management mechanisms for copy protection before copyright owners will license content to them. MultiChoice opposed this argument, saying that HDCP is sufficient protection for content owners.

A part of the STB standard which E-tv indicated was very important to them is the copy protection, or digital rights management (DRM) requirements.

These include High-bandwidth Digital Content Protection (HDCP) on the high definition (HD) output of the STB (HDMI, in this case), and encryption on the signal which enters the box from the antenna.

Without these elements, E-tv’s head of new business and platforms Maxwell Nonge said that content owners would not license premium or HD content to free-to-air broadcasters like themselves.

MultiChoice has rubbished this argument, saying that HDCP is sufficient copy protection for content owners.

Head of stakeholder and regulatory affairs at MultiChoice, Calvo Mawela, cited the United Kingdom as an example: they use the same standard we are about to adopt (DVB-T2), do not encrypt their free-to-air channels, and use HDCP.

Asked if copyright owners don’t have a double-standard when it comes to licensing content to South African broadcasters, Mawela said that all broadcasters are treated the same.

Mawela reiterated that nothing would stop a manufacturer from making a box that conforms to our STB Control standard, but eschews the rest of the SANS specification.

Such a box might then not have a HDCP-compliant HDMI port, or could even allow users to record programmes “in the clear” (without encryption).

8. Competition: the heart of the conflict?

Summary: Minister Carrim has said that MultiChoice’s fear of competition is the heart of the conflict. MultiChoice said that they don’t fear competition, but question government using taxpayer money to subsidise the entry of a private company into the pay TV market.

In his interview on 702 Talk Radio, Minister of Communication Yunus Carrim brought up the issue of MultiChoice’s monopoly and competition in South Africa’s broadcasting sector.

“At the heart of the conflict is MultiChoice’s immense fear of competition,” Carrim said.

Asked to respond to the Minister’s statement, MultiChoice Group CEO Imtiaz Patel said, “We are absolutely not afraid of competition. We welcome competition.”

Patel said that they wished to remind us that a few years ago TopTV had reported doing exceptionally well after its first 18 months of operation, indicating that they had gained 400,000 subscribers.

Then they went backwards “because of their own folly.” Patel said. He mentioned over-subsidisation of their decoders as one of the reasons for TopTV’s slide.

Since then, TopTV has been taken over by StarTimes which Patel said has “deep pockets” and is a formidable opponent to MultiChoice in the rest of Africa.

In spite of this existing competition in the market, Patel argued that government appears to want to use taxpayer money to effectively subsidise another private company’s entry into the subscription TV market.

Some taxpayers may not mind their money being used to launch a competitor to MultiChoice on South Africa’s DTT platform, Patel said, but added that there are also taxpayers who do mind.

Patel said that it is not the Minister’s job to take the taxpayer’s money and enable a private company.

Instead, there is already a possible Competition Commission inquiry on MultiChoice pending and a regulatory inquiry from the Minister into premium content rights. These are the policy mechanisms government should use to further its goals rather than subsidising a private company, Patel said.

“What about the other private companies who have aspirations of pay TV who will not be able to access the same money now that the lie of the land favours only one company?” Patel asked.

While he was careful not to mention E-tv by name, Patel alluded to them by dropping hints.

A high court ruling confirmed that free-to-air broadcasters would be the ones to determine which STB Control system to use and who would operate it.

SABC has entered into an agreement with MultiChoice not to encrypt their free-to-air channels, which leaves only one broadcaster to decide the details, Patel said.

Playing the man

While this article sought to focus only on the facts and present all the sides of the various arguments, questions about the motivations of the players involved in this dispute are relevant.

MultiChoice does not operate a free-to-air (F2A) broadcaster, so why is it sticking its nose into what appears to be an F2A issue?

Head of stakeholder and regulatory affairs at MultiChoice, Calvo Mawela, said their interest is that they will also be using South Africa’s digital terrestrial television (DTT) platform.

If the platform is unstable or otherwise of poor quality, or if uptake is slow, then it will impact their ability gain market share, he said.

Let’s get this done

There are a number of questions that require either further discussion, or more detailed answers from the feuding parties.

Having a bun-fight in public has served to bring the issue of STB Control to the attention of more people, but there still does not seem to be answers to some of the most important points of the arguments.

While it is expected for there to be some conflict on these matters when the Ministry and Department of Communications are doing their jobs, the fight can’t drag on for too long.

This fight should have been had in 2010. We have missed our original analogue switch-off date by almost three and a half years, the national elections are looming, and we’re in danger of missing the ITU’s digital migration deadline (17 June 2015).

More pressingly, broadcasters are holding up the release of the precious “digital dividend”, spectrum used by old analogue TV broadcasts that will become available once the migration is complete.

Mobile network operators have expressed interest in using the spectrum to cover South Africa’s rural areas with Long Term Evolution mobile broadband technology.

Once this fight is over, the fight over the dividend can begin, so the sooner South Africa begins its migration, the better.

Let’s please drop the emotive talk of who is most qualified to speak on behalf of consumers and other nonsense, and focus on the facts.

MultiChoice can’t speak for poor, or any consumer

Put consumers first, MultiChoice tells minister

MultiChoice ad astonishingly inaccurate: minister

Cut DStv prices if you really care about consumers: minister

Want good TV in SA? We need encryption: E-tv

South Africa’s Digital TV migration – a primer

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Digital TV battle – let’s cut the crap