Media group Caxton and two public broadcasting advocacy groups, the SOS Coalition and Media Monitoring Africa, are challenging a 2013 deal between MultiChoice and the SABC that appears to have led to the latter abandoning its support of set-top box control.
The parties contend that the SABC “effectively ceded its power to determine its policy on set-top box control to a commercial broadcasting entity that is also its competitor”. At the time the deal was signed, the SABC, which had been in favour of set-top control in digital terrestrial television, suddenly rejected the idea.
MultiChoice is vehemently opposed to set-top box control being included in the up-to-5m set-top boxes that government will subsidise as part of South Africa’s migration from analogue to digital terrestrial television, arguing that such a move would amount to unfair competition by subsidising prospective new pay-TV players. A control system based on conditional access is a prerequisite for launching a pay-TV platform.
Media Monitoring Africa and SOS say they have become involved after Caxton approached them to join it in challenging the broadcasters’ deal.
“We realised that on the issue of the deal, we found common agreement. We know that in other circumstances and on other issues we may strongly disagree with Caxton (including, for example, transformation in the media), as on other issues we may agree equally or strongly disagree with the SABC and/or MultiChoice,” they say. “In the current circumstance, joining the application has enabled us to take forward a clear public interest issue and address what is in our view fundamentally a bad deal.”
The two groups say that MultiChoice and the SABC are required to notify competition authories of their deal.
“It is our shared view that in terms of section 12 of the Competition Act, the deal entered into between the SABC and MultiChoice, in which MultiChoice acquired control over part of the SABC business, constitutes a mandatory notifiable merger,” they say in a joint statement.
“We are not aware of any attempt to notify the Competition Tribunal of such a merger. If the deal is proven to be a notifiable merger, it will enable us to oppose the merger on the basis that it is not in the public interest…
“When news of the deal broke in 2013, both Media Monitoring Africa and SOS expressed deep concern as to the nature of the deal. We both believe it fundamentally works against the best and long term interests of the SABC and the people it serves.”
The organisations say they have three main concerns with the deal.
Firstly, they say, the SABC handed over power and control of its archives to MultiChoice. “The archives are more than simply a collection of old broadcast programmes and material, they are an invaluable public asset, of a broadcaster that has unique footage of South Africa’s transition to a democracy, including unique footage of Nelson Mandela.
“As we head (albeit ever so slowly) into a digital environment, content is as gold to a jeweller. In giving control and access of the archive to a commercial player, the SABC has sold off the family jewels.”
Secondly, they argue, the SABC effectively ceded its power to determine its policy on set-top box control to a commercial broadcaster that is also a competitor. “The deal required that the SABC change its original policy of supporting encryption on set-top boxes. The SABC acceded to this in spite of the significant benefits such encryption would have for free-to-air broadcasters, including itself, in terms of giving it a competitive edge against its biggest rival, Multichoice’s DStv.
“The questions that arise are: who benefits from such a turnaround, and is it in the best interest of the SABC for it to have, at MultiChoice’s behest, done a U-turn on the decision to oppose encryption on set-top boxes?
“We believe it is not in the SABC’s best interests and it seems the issue — which might otherwise seem out of place in the agreement — was inserted to support Multichoice’s case against encryption,” they say.
Lastly, they say, in addition to handing over the SABC archive, the deal also sets out terms for a future channel to be developed by the SABC in terms of which MultiChoice may veto some programmes and select only the best ones to be broadcast exclusively on the SABC-MultiChoice platform.
“In so doing, not only does the deal ensure the best future local programming is aired on its platform, it also means citizens who do not subscribe to the MultiChoice services will be denied viewing the programming — ensuring the most marginalised and poor citizens are deprived of quality content. This clearly goes against the public interest mandate of the SABC.” — © 2015 NewsCentral Media