The Ministry of Dithering and Delay

March 27th, 2007

Imagine you have been invited to pitch for a pay-TV licence. You put together a consortium and hire a team of experts and all of you work for many months to prepare an application.

Comes the deadline, you have burnt the midnight candle to get it done. It is a substantial technical document. Since the cost of entering the satellite market is billions of rands, you have spent a few million making your bid.

You have shown confidence in the new broadcasting system. You are prepared to invest billions in this market. You are feeling good. You know the regulator which issues licences is a little overburdened and slow, but it is worth the wait to get into this market, probably abut a year. There are lots of other applicants, but there is no spectrum shortage here, so you have a good chance of getting in. You see how much money Multichoice is making in this market, and you can’t wait to compete for a slice of the large pie.

Then the Minister summarily withdraws the invitation. Just like that. Sorry, she says, but I have had another idea.

That is what has happened with pay-TV last week. Communications Minister Ivy Matsepe-Casiburri, last week published her department’s plan for the migration to digital terrestrial broadcasting (the shift from our current analogue TV and radio signals to digital television for our standard free-to-air stations, which would raise picture quality and allow for many more channels). To avoid “undermining� this process, new pay-TV licensing should wait until the launch of digital terrestrial at the end of 2008, the plan suggested. Stakeholders were given two weeks to comment.

The industry is reeling from this shock. How can the Minister barge in at this late stage and interfere with Icasa’s licensing process? How can she treat with such contempt those who want to invest billions into our media industry? How can she delay further a licensing process which has already been on the regulator Icasa’s must-do list for some years?

The only parties to benefit are Multichoice and MNet who are given a further breathing space without competition. Their licensing will go ahead.

SABC is heaving a sigh of relief. It was not ready for satellite, and its focus is on the digital terrestrial roll-out anyway. It will be more concerned with the Minister’s proposal (another bolt from the blue) that they drop television license payment for those who move to their digital system, and they be limited to five TV stations (their current three and the two new planned regional African-language stations).

The other pay-TV applicants include Telkom (which has planned a R6-billion investment), SABC and eTV. Together, their investments and the existence of a host of new channels with plenty of local content would have been the biggest boost to the local industry for many years.

Lawyers working for the various bidders are adamant that the Minister’s threatened intervention would be illegal and unconstitutional. This may mean it will not go ahead. But it does mean that the Ministry and Department have, once again, brought havoc and delays to the industry.

There will be many protests. For Icasa it will be a critical test, as they will have to decide whether to allow the Minister to mess with their work and their independence. If they let this happen, one industry player told me, you might as well rename it the “Independent Communications Arm of the Ministry�.

Small things often tell you about the big things. In researching this story, I went to the Department website to contact their media liaison officer. I have left two messages on her phone in the last 24 hours and one at the switchboard and tried her cellphone half-a-dozen times. No luck.

So I went to the “Latest News� section of their website to see if I could download the necessary documents. Their latest news is dated November 2004.

This is the Department of Communication., which is meant to be leading the charge to bridge the digital divide. They tell us, by the way, that their deadline for digital terrestrial TV is November 2008, a mere 20 months away. By way of illustrating how unlikely this is, Britain set a 10-year plan for the same process – and they have just extended it by five years.
So if the Minister wants pay-TV to wait until this roll-out is finished, we are going to have to be very patient. My guess is that there is such a wild party going on at Multichoice and MNet that they have been able to forget about their painful loss of open time, which kicks in at the end of the month.

*This column first appeared in Business Day, Narch 28 2007

.

Entry Filed under: Anton Harber, Media regulation, TV