Both ineffective regulation from South Africa’s broadcasting regulator, Icasa, and government’s delayed digital terrestrial television (DTT) migration process are giving MultiChoice a leg up in its bid to be the incumbent satellite broadcaster, say worried industry insiders.
Insiders further argue that MultiChoice is simultaneously making moves to make it look as though there is effective competition in the sector in order to stave off harsher regulation.
In response to questions from City Press this week, MultiChoice denied these allegations, referring to claims of insufficient competition as “a rather strange comment”.
The broadcaster suggested that “perhaps these commentators are not aware” of Icasa’s latest round of licensing for aspirant satellite broadcasters or the “new competition from internet-based services”.
What has competitors worried includes MultiChoice’s part in bailing out its troubled competitor TopTV, a deal to pay the SABC R553 million over five years for two new channels on DStv, and its alleged lobbying of the National Association of Manufacturers in Electronics Components (Namec) to contest the need for conditional access control in the DTT set-top boxes.
MultiChoice said these three developments were all unrelated, but in the past few weeks City Press spoke to a number of broadcasting stakeholders who see the developments as part a campaign buttressed by a flailing regulatory environment that will benefit incumbents on the eve of a broadcasting explosion through digital platforms.
MultiChoice opposes conditional access, which would allow a third party to grant and deny access to specific digital channels through set-top boxes. It maintains this would be “bad for the country and the consumer”.
Critics argue that MultiChoice is trying to prevent the DTT platform from becoming a rival to DStv. Without conditional access, the platform could not be used to host pay-TV channels, because there would be no way to deny viewers access to signals.
The loan provided to the Dynamic TV Consortium to buy a stake in TopTV was granted only on condition that it “complies with broadcasting and competition law”, said MultiChoice.
Regarding the SABC deal, MultiChoice maintained it was “not funding a competitor. Instead, we are procuring channels on a commercial basis. This is how pay TV works – whether it’s Disney, Discovery, the BBC or the SABC.”
MultiChoice is facing an investigation by the Competition Commission after a complaint was lodged by embattled satellite rival TopTV’s parent company, On Digital Media (ODM).
The complaint was lodged in November 2012, shortly after ODM was placed in business rescue in October.
“Icasa is not acting effectively as a competition regulator,” said one industry insider on condition of anonymity.
“For the past three to five years, Icasa’s corporate plan says they will look at premium content and sports rights, but nothing has happened.
“Now they are licensing new satellite players. Poor souls – did they not learn their lesson by seeing what happened to Top TV?”
Another industry insider said: “I don’t think Icasa knows its arse from its elbow as to what’s going on. The government and the regulator have not unpacked the full extent of the broadcasting revolution that South Africa is about to go through.”
Industry insiders argue that e.tv’s planned launch of a free-to-air satellite platform, Openview HD, shows that the market is now ahead of the regulator.
The service will launch in October, but Icasa is still not clear on how, or if, it is to be regulated.
Platco Digital, the company in the e.tv stable that is launching the platform, says it does not need a new broadcasting licence, but Icasa has suggested it might.
Responding to questions from City Press this week, Icasa said it did not have details about Platco Digital and its plans to operate Openview HD.
“e.tv’s Sabido has requested a meeting with Icasa in this regard,” said Icasa spokesperson Paseka Maleka.
One industry insider said it looked increasingly as if Icasa would allow only the existing broadcasters to be on the DTT platform during the period of dual illumination – between when digital television signals are turned on and analog signals are turned off.
“It all comes back to this government policy of ‘managed liberalisation’,” said the insider. “It has become a swearword in the industry.”
The insider argued that this amounts to “regulatory capture” by the incumbent broadcasters, who use the vast amount of money they spend on regulator and legal affairs to challenge any attempt to introduce competition.
“There is one regulator but 20 big companies,” said the insider. “Their regulatory budgets are bigger than Icasa’s total budget.”
In May this year, former communications minister Dina Pule announced that, by September, she planned to issue a policy directive to Icasa to address competition in the broadcasting sector by looking at market definitions for the wholesaling of premium content.
The likely outcome would be to force MultiChoice to license certain premium content, sports rights in particular, to rival broadcasters.
But nothing is set to happen until the next financial year, as Icasa told City Press this week that it had “reprioritised” the regulatory process for premium content and sports rights until 2014/15.
“Icasa has a budget allocation from government that it must work within and prioritise its work according to the resources it has,” said Maleka.
Powered by WPeMatico