Set-top box installers mull legal action against USAASA

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Efforts to resolve the conflict between USAASA and set-top box installers hits a deadlock.
Efforts to resolve the conflict between USAASA and set-top box installers hits a deadlock.

Set-top box (STB) installation companies, initially contracted to install digital migration decoders, plan to take legal action against the Universal Service and Access Agency of SA (USAASA).

This, after their meeting request to resolve the STB installation impasse with USAASA was shot down by the agency’s newly-appointed acting CEO, Sipho Mngqibisa.

Although the installers’ contract with USAASA has ended, which they acknowledge, National Treasury authorised the deviation in regards to the expired contract "on condition all the 26 [installers] were initially contracted to do the installations".

The installers previously confirmed signing the necessary addendum needed to continue work; however, USAASA’s leadership has not signed, or, in the case of Mngqibisa, “flatly refuses to meet”, they claim.

In e-mail correspondence, which ITWeb has seen, Mngqibisa indicates he is still applying his mind on the installers’ request for a meeting to discuss the unresolved matter pertaining to the status of the digital terrestrial television (DTT) project.

“As the interim CEO, I am bound by organisational policies and will consult with my management to determine whether it is prudent to meet with yourselves since your contracts with the agency have since lapsed.”

Frustrations mount

The impasse between the installation companies and USAASA came to ITWeb’s attention last month, when the installers accused former CEO Lumko Mtimde of failing to advance the empowerment of small businesses by refusing to sign the contract extension.

Mtimde said USAASA received several complaints from local installers and community leaders that the local installers were being exploited, adding the agency is considering options in regards to the continuation of the installation process.

In 2015, USAASA decided to award a R4.3 billion tender to manufacture the digital migration decoders to all of the 26 companies that bid for the tender. The agency also contracted 26 companies to install STBs.

Lerumo IT Solutions’ Vusi Hlatshwayo, who initiated contact with Mngqibisa, says they suggested a round table to afford all stakeholders, including the new interim CEO, a chance to clear the air and table all concerns with the intention of paving a way forward.

We are shocked by the acting CEO’s stance, says Hlatshwayo. “Installers are largely frustrated, as the Department of Communications (DOC) is on the drive to recruit ‘local installers’, while they are in limbo, while they are not even afforded the opportunity to engage the acting CEO.”

Lerumo IT Solutions is part of the DTT forum, which includes Amigen Investments and Silverwell Business Enterprise, representing the 26 installation companies initially contracted by USAASA.

Since the CEO’s e-mail declining to meet with the installers, the installers have decided to take legal action and let the courts settle the matter. They believe they have a strong case, and some companies in the forum have already pledged as much as R50 000 for legal costs.

Installation companies have expressed desire to install the balance of digital migration decoders.
Installation companies have expressed desire to install the balance of digital migration decoders.

Legal showdowns

This is not the first time the digital migration saga has attracted some form of legal attention.

Former communications minister Faith Muthambi famously had a legal showdown with Etv over the technical specifications of the government-subsidised digital migration decoders.

Muthambi adopted the amendment that calls for the use of unencrypted decoders, a decision she said was in line with unconditionally providing free access to content for citizens in all corners of SA.

However, Muthambi's decision to amend the digital migration policy was challenged by Etv in the courts.

The free-to-air television broadcaster wanted digital migration decoders to be encrypted, a move labelled as a future "business plan" for the broadcaster, which was speculated to want to move away from its free-to-air model.

The former minister’s amendment also drew criticism because it went against the ANC policy on digital migration. It resulted in a public spat between Muthambi and minister Blade Nzimande, who lambasted Muthambi for defying ANC and alliance decisions on digital migration.

After differing judgements and appeals, the Constitutional Court in June 2017 delivered a judgement in favour of Muthambi’s amended policy that calls for unencrypted decoders.

In November 2017, the Democratic Alliance (DA) called on the public protector to investigate the process undertaken to procure government-subsidised STBs. At the time, the DA said investigations into collusion in the process "clearly indicate serious procurement irregularities or criminal acts have been committed".

USAASA also filed a legal application requesting a review of the entire STB procurement process and the decision taken by its board to select a panel of service providers in respect of four tenders issued in 2014/2015.

Meanwhile, it is still unclear whether USAASA has contracted other companies to install digital migration set-top boxes.

The installation companies previously alleged Sentech has been appointed to do some of the installation. This, they said, is despite voicing that they would like to install the balance of the STBs that are currently sitting at the SA Post Office storage warehouses.

The DOC, the custodian of the digital migration project, had not responded to ITWeb’s questions by the time of publication.

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