Communications regulator Icasa has asked the Competition Commission to probe what it’s calling a “possible restrictive horizontal practice” between the SABC and MultiChoice over the supply by the public broadcaster to the pay-television operator of a 24-hour news channel on DStv.

TechCentral, working in conjunction with the Sunday Times, revealed last year that the agreement contains an obligation preventing the SABC from offering its free-to-air channels on any digital terrestrial TV system that uses encryption. MultiChoice is engaged in a battle with e.tv over whether the set-top boxes that South African consumers will need to receive digital TV should contain a control system capable of encrypting free-to-air broadcasts.

MultiChoice claims that such a system, assented to by government, would amount to an unfair subsidy for prospective rivals in South Africa’s pay-TV industry. Its deal with the SABC, which also provides for the supply of a 24-hour entertainment channel that is yet to be launched, raised eyebrows. The SABC had previously been in favour, along with e.tv, of using a control system in set-top boxes.

“In the context of the ongoing public dispute between e.tv and MultiChoice over whether free-to-air TV services should utilise set-top-box control, the question arises as to whether the agreement between the SABC and MultiChoice, as it affects the issue of set-top-box control, may constitute a form of restrictive horizontal practice in the television market,” Icasa says in a statement.

“Icasa has requested both the SABC and MultiChoice to provide a copy of the agreement, but both parties have failed to honour that request. This failure has made it difficult for the authority to verify the claim put forward by MultiChoice that ‘any contractual obligation upon the SABC to continue to transmit its free-to-air channels in the clear (without encryption) is an incident of the distribution arrangements agreed upon by the SABC and MultiChoice. Such obligation, as indicated forms part of an agreement between parties in a vertical relationship and is not, as alleged, a horizontal restrictive practice’.

“As the issue of restrictive horizontal practices falls within the scope of section 4 of the Competition Act, the authority has requested that the Competition Commission open an investigation into this matter.” — (c) 2014 NewsCentral Media