Pay-TV operators, SABC square off

By Damaria Senne, ITWeb senior journalist

Johannesburg, 18 Sept 2007

The South African Broadcasting Corporation (SABC) has demanded to be paid for providing local content to pay-TV licensees, as mandated by the Electronic Communications (EC) Act, under the "must carry" obligation.

This provision holds that the SABC is obliged to provide local content to commercial TV service providers, while similarly obliging pay-TV licensees to carry such content in the form of SABC channels.

However, the public broadcaster informed the Independent Communications Authority of SA (ICASA) some time ago that it would provide its channels to the pay-TV licensees on condition it is paid. The SABC is arguing it would effectively be providing content to its competition, free of charge.

"The national broadcaster is more than 80% funded through commercial income. In other words, the same commercial operator [pay-TV licensee], the subscription operator, is our competitor in the market," the SABC said in its submission to ICASA.

Last Friday, ICASA published a document discussing the extent to which pay-TV service providers would carry SABC channels.

Establish parameters

The must carry provision ensures universal access to public broadcasting services, says ICASA spokesman Sekgoela Sekgoela.

"We want to establish whether commercial TV providers must carry one, two or all public service channels."

The law does not stipulate payment terms for commercial operators carrying public content, saying only that the content should be provided under "agreed terms and conditions". It is the pricing structure of this content that could become a point of contention between the commercial operators and the SABC.

MultiChoice has already said it opposes the "must carry" provision, while Telkom Media noted that the venture should be commercially viable. The other three new pay-TV licensees, Walking on Water, On Digital Media and e.sat, have not yet commented on the issue.

Incumbent pay-TV operator MultiChoice and the SABC have both acknowledged that local content is more expensive than international programming, which could impact the cost of the must carry obligations.

Cost considerations

"If the price of that content is exorbitant, it does not make business sense for Telkom Media to use it," says Telkom Media spokesman Chris van Zyl.

"ICASA must find a way to make sure the cost of the content is not prohibitive," he notes.

Meanwhile, the SABC recently said it is positioning itself as a content provider for pay-TV licence-holders. Last week, SABC spokesman Kaizer Kganyago said the public broadcaster was in talks with ICASA regarding the matter.

However, ICASA says the SABC's positioning as content provider is a business issue and over and above the obligation by pay-TV broadcasters to carry its channels. "ICASA is not involved in that process in any way," says an ICASA spokesman.

The spokesman notes that ICASA is only required to deal with issues of legal mandate, and the EC Act only provides for the channels in their entirety, not TV programming.

Last week, when awarding new pay-TV licences, ICASA chairman Paris Mashile said the regulator aims to liberalise the sector and ensure broadcasting services are provided for a diverse range of communities in SA.