Encrypted digital TV set-top boxes risk being expensive for government and burdening poorer South Africans with defunct technology, says pay-TV provider MultiChoice.<\/p>\n
Set-top boxes are key to South Africa\u2019s digital migration which will shift public broadcaster the SABC from analogue to digital signals and open up frequencies for faster broadband. The boxes will decode digital signals for older analogue television sets.<\/p>\n
Subsequently, government plans to roll out subsidised set-top boxes to 5 million poorer households to help with the digital migration process.<\/p>\n
But the issue of encryption of these set-top boxes has become a battleground between broadcaster e.tv and other players like Naspers-owned MultiChoice and the department of communications.<\/p>\n
Last month, upon a legal challenge from e.tv, the SCA overturned Communications Minister Faith Muthambi\u2019s decision not to encrypt the subsidised set-top boxes.<\/p>\n
The court ruled that Muthambi failed to properly consult parties on her decision to amend policy on encryption, and that her decision could cost e.tv R3bn to manufacture extra boxes.<\/p>\n
Broadcaster e.tv has also argued that a lack of encryption would hinder high definition broadcasts and risk non-compliant STBs receiving digital broadcasts.<\/p>\n
But MultiChoice owned M-Net, together with Minister Muthambi, have lodged an application with the Constitutional Court for leave to appeal the SCA\u2019s decision.<\/p>\n
\u201cThe SCA erred in accepting e.tv\u2019s argument that encryption is needed to allow free-to-air broadcasters to obtain high-definition content,\u201d said MultiChoice in a document sent to Fin24.<\/p>\n
MultiChoice, in the document, said broadcasters ranging from the BBC and Channel 5 in the UK to CBS in the US do not encrypt signals but are able to obtain high definition content.<\/p>\n
In a separate \u2018fact sheet\u2019 provided to Fin24, MultiChoice further outlined its position on the matter.<\/p>\n
In the document, MultiChoice said government\u2019s subsidy of the 5 million STBs will come at a cost to the fiscus of approximately R2.5bn.<\/p>\n
But MultiChoice argues that in future, newer television sets – which are becoming cheaper – will be capable of receiving digital signal, making STBs obsolete.<\/p>\n
\u201cIf it is decided to put encryption technology, also known as conditional access, in this converter it will mean that when the household decides to upgrade to a digital television set there will still be a need to keep this converter to unencrypt the free-to-air signal, which does not need to be encrypted in the first place because it is precisely that \u2013 a free-to-air signal,\u201d said MultiChoice.<\/p>\n
\u201cIn our experience, an STB lasts 5-7 years on average before it breaks.<\/p>\n
\u201cIf we encrypt the signal and the digital televisions will forever be dependent on the boxes, who will fund the second (and third and fourth) round of subsidy, a lot more than R2,5bn each time?\u201d added MultiChoice.<\/p>\n
MultiChoice\u2019s other arguments against encryption include the premise that unencrypted boxes are cheaper to make, which could mean that government could subsidise more poorer TV households.<\/p>\n
Meanwhile, MultiChoice further said that encryption software requires annual maintenance and has ongoing costs for royalties.<\/p>\n
\u201cEncrypting the free signals (which do not require encryption because they are meant to be free) will require massive back-end systems and investments in support structures like call centres,\u201d said MultiChoice in its document.<\/p>\n
\u201cThe cost of maintaining a call centre of 1 000 people to service these requirements is R300m per year,\u201d the pay-TV provider added.<\/p>\n
In contrast, MultiChoice has alleged that overseas software makers will \u201creap tens of millions per year\u201d.<\/p>\n
MultiChoice has also argued that TV makers will have less incentive to sell digital televisions in South Africa and \u201cdump old analogue televisions into the South African market\u201d.<\/p>\n
In its final arguments, MultiChoice said that encryption is not required for the broadcast of HD content by free-to-air broadcasters as specifications already exist to protect this type of content.<\/p>\n
MultiChoice added that encryption is also not required to protect local manufacturers.<\/p>\n
\u201cThe department of trade and industry has imposed an import duty of 15% on all imported STBs,\u201d said MultiChoice.<\/p>\n
\u201cGovernment controls the purse strings. They issue the tender and decide who gets the contracts for the manufacture of the 5 million boxes and can direct those orders to local manufacturers,\u201d MultiChoice added.<\/p>\n
Fin24 asked e.tv to comment on M-Net\u2019s bid to challenge the SCA ruling and on MultiChoice\u2019s arguments regarding encryption of STBs.<\/p>\n
However, the broadcaster has opted not to comment at this stage.<\/p>\n
\u201ce.tv\u2019s legal team has commenced preparing their legal papers and will not be commenting at this stage,\u201d Vasili Vass, group head for e.tv\u2019s corporate affairs said in a brief email statement to Fin24.<\/p>\n
In the meantime, MultiChoice is standing firm on its stance that encryption is unnecessary.<\/p>\n
\u201cIt is patently clear that encryption is not necessary, is expensive, is not policy in any major countries in the world, will be harmful to the poor and is not required for a quick and smooth migration process,\u201d said the company.<\/p>\n
\u201cOn the contrary, adding encryption technology will lock South Africa into an old world forever and a day, will benefit only a few with vested commercial interests and is anti-poor,\u201d added MultiChoice.<\/p>\n
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