Johannesburg - Communications Minister Faith Muthambi’s decision not to include signal encryption and conditional access in government-sponsored set-top boxes required for digital migration, has “signed, sealed and delivered” the continued monopoly of Multichoice in the pay TV market and the SABC in the free-to-air market.
This is the opinion of Support Public Broadcasting coalition organiser Sekoetlane Phamodi.
Loren Braithwaite Kabosha, chief executive officer of industry representative body the SA Communications Forum, said if the policy did not include conditional access – the government’s stated goals of stimulating the local electronics manufacturing industry, promoting competition in broadcasting and enabling e-government services would not be met.
The final policy is to be gazetted this week and should answer remaining questions about how exactly the five million boxes the government intends to provide free to qualifying households will work.
Officials briefing Parliament this week insisted that while the set-top boxes (STBs) would have a control system to prevent them from being used outside the country, encryption and access control would not be included.
“Our responsibility is to protect the box that government is making an investment in. The issues beyond the box, of the signal, are not our responsibility as government,” said Norman Munzhelele, responsible for policy and entity oversight in the Department of Communications.
This is a departure from the government’s digital migration policy since 2008, which included the objectives of promoting competition among broadcasters, boosting local manufacturers and offering e-government services.
Phamodi explained how it would effectively hamstring existing private free-to-air broadcasters from competing for viewers and block new entrants to the pay-TV market.
In the first place, vendors of premium content such as popular television series Game of Thrones or House of Cards would not even sit down to negotiate with broadcasters who did not operate an encrypted system because there was nothing to protect their content from piracy.
This would mean increasing numbers of viewers would be forced into the arms of Multichoice – where they could watch Premier League Soccer as well as quality local and international content – by the inferior offerings on free-to-air television.
At the same time, would-be new entrants to the pay TV market like newly licensed Siyaya TV would be caught in a double bind: they would need premium content to attract subscribers, but would struggle to fund the investment in a conditional access system required to operate a pay TV service without having signed up enough subscribers to show they were commercially viable.
“Over and above that, Siyaya TV needs to get a network of installers, the content to put on to the box, which they are not sure is going to be taken up just yet,” said Phamodi.
“So what I’m talking about really is the Top TV story. All of this investment was made on the assumption that the market was open enough to enable a new entrant.”
Top TV was shut down in 2013 after a three-year stint on the airwaves characterised by customer service complaints, debit order and billing system problems, a lack of sport and premium TV channels despite promises to add them, discontinued channels as well as a promised PVR decoder that never materialised.
“The market, it turns out, is hostile, because in order to attract people on to your package you need to have the content; in order to afford the content people want to see you have to have subscribers,” Phamodi said.
“Once all that’s done, the broadcaster is broadcasting, we have competition. But the market isn’t like that because these broadcasters are all new, they can’t afford to run operations on the scale of Top TV, let alone DStv.”
He also questioned whether the control system described by officials would be effective in ensuring the local manufacturing industry derived maximum benefit from the government’s investment.
While the free STBs are to contain 30 percent local content, almost three million people having to buy their own would be tempted to turn to grey imports, already available at half the expected cost of the locally made variety.
This had been the experience in Mauritius, Phamodi said, which had warned South Africa not to follow its example.
It would not be possible to enable conditional access at a later stage if the capacity to support it had not been built into STBs from the start.
“So, if the policy were to change, if conditional access is not implemented, everybody would have to get a new set-top box,” said Braithwaite Kabosha.
Added Phamodi: “You have a national monopoly in the free-to-air market (SABC) and you have a national monopoly in the pay-TV market, but also, people will not have the full range of choice and the space will remain highly concentrated in terms of ownership.”
Political Bureau