SA’s communications regulator has given the SABC the green light to start negotiating carriage fees with pay-TV operators, which have since 2008 been permitted to carry the public broadcaster’s free-to-air channels for free.
Last week the Independent Communications Authority of SA (Icasa) gazetted new regulations on the so-called must-carry rules, stating that the public broadcaster must still offer its television programmes to pay TV operators, but subject to commercially negotiable terms.
Icasa introduced must-carry regulations in 2008, in effect forcing pay-TV companies such as MultiChoice to carry the SABC’s free-to-air channels — SABC1, SABC2 and SABC3 — to support universal access.
However, the SABC, which is desperate to unlock new revenue streams in a bid to remedy its dire financial situation, argued that the rules have a serious negative impact on potential revenue. The public broadcaster argued that MultiChoice has benefited from the SABC channels on DStv, claiming they are among the most watched on the platform.
Icasa started reviewing the regulations in 2018 and after an extensive consultation process has published new rules.
In terms of the rules the public broadcaster must offer its television programmes subject to commercially negotiable terms, meaning that a fee can be negotiated.
If the parties fail to conclude the agreement, they must refer the dispute to the regulator in writing within five days of reaching a breakdown in negotiations. The regulator may refer any failure to comply with regulations or any unresolved dispute to Icasa’s complaints & compliance committee for resolution.
The arrangement between the licensees in terms of the 2008 must-carry regulations will continue to be applicable until the parties have concluded the commercial agreement, the new rules state.
Independent arbitration
Icasa notes that there is a possibility that an agreement may not be reached.
“Should the parties fail to find agreement ... the parties may at their own discretion agree to independent arbitration; or failing that ... within 60 days of the expiry of the period for negotiation in terms ... or such longer period as the parties may agree in writing, the [pay-TV operator] shall cease carrying the must-carry channels on its subscription services, and the parties shall inform the authority, the public and the subscribers accordingly.”
The SABC said at the weekend it welcomes the new rules as they are in line with existing legislation.
“When the SABC board was appointed in 2017, one of its first key deliverables was to call upon the regulator to review the ‘must-carry’ regulations and align them with the Electronic Communications Act,” said SABC spokesperson Gugu Ntuli.
“This legislation clearly required subscription broadcasters to carry the SABC’s channels ‘subject to commercially negotiable terms’. Unfortunately, for the last 13 years the Icasa regulations have conflicted with this provision. It has taken a concerted effort from the SABC board and management and the minister to rectify this unfair provision through the regulatory review process,” Ntuli said.
Back-counted
MultiChoice has previously stated that it is irrational for the public broadcaster to require its DStv bouquet to pay to carry the three channels as they are freely available in any case. But the SABC argues that MultiChoice has benefited from the channels on DStv, saying they are among the most watched on the platform.
As highlighted in the gazette, MultiChoice argues that when pay-TV subscribers watch SABC channels on pay-TV services, they are “back-counted” as SABC viewers. SABC is thus able to monetise and sell this audience to advertisers. The pay TV giant denies allegations made by the SABC that must-carry channels boost its subscription or advertising revenue.
It highlights that its transmission of the public broadcaster’s content is not necessarily based on its popularity but largely on the must-carry obligations. MultiChoice adds that the transmission of the public broadcaster’s content promotes universal access and assists the public broadcaster to achieve its own mandate and enjoy significant financial gains.
On Sunday, MultiChoice spokesperson Collen Dlamini said that the new rules don’t mean pay-TV broadcasters are compelled to pay to carry the SABC channels, meaning that they can walk away if an agreement cannot be reached.
“In most countries, the public broadcaster pays the subscription broadcaster a fee for carrying its channels. MultiChoice is committed to negotiating commercial terms with the SABC in good faith. We will continue to carry the SABC channels on the current terms until a new agreement is reached,” Dlamini said.
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