In our rapidly changing world of technology, defined by big, powerful corporations and the constant disempowerment of consumers, regulation is seemingly becoming the only tool available to bring about the necessary balance. However, these regulations must be even-handed so they do not just balance power but also ensure continued investment in the industry —and indeed not just reduce the power of big business, but also increase the participation of smaller and new entrants.
Speaking to this dynamic, a June 2018 research article by Deloitte under the title “The future of regulation: principles for regulating emerging technologies” argued that “regulatory leaders are faced with a key challenge: how to best protect citizens, ensure fair markets and enforce regulations, while allowing these new technologies and business to flourish”.
Among the recommendations outlined in the Deloitte research is that regulators should move from the “regulate and forget” approach and focus on the importance of creating outcome-based regulation. This is to say, regulators should be mindful of the long lags in regulatory processes and the unpredictability of outcomes, and thus keep co-operative and responsive approaches.
In this context the researchers state: “Traditionally, regulators conceptualise new rules and regulations in response to market developments or new legislation. Next, they spend months or years drafting rules and presenting a first draft for public comment. Finally, they examine these comments — and there can be tens of thousands or even millions of them — and change the proposed draft accordingly... The problem with this process is twofold: first, regulators often don’t really know how businesses and consumers will react to new regulations; and second, the rules are rarely reconsidered once in effect”.
It should also be obvious that with the fast pace of change in technological advances the time lags between the various processes of regulation mean that what is ultimately implemented is likely to lead to outdated and often harmful regulations and outcomes. The government draft white paper on audio and audiovisual content services that has been released for comment seeks to “align SA’s policy, legislative and regulatory framework with the [fourth industrial revolution] 4IR and promote investment in the audio and audiovisual content industries, repositioning the industry for further growth, and encourage investment, capital, infrastructure and skills development”.
The Deloitte article referred to offers a different way, pointing towards adaptive approaches to regulation that rely more on trial and error and co-design of regulation and standards; that also have faster feedback loops. “More rapid feedback loops allow regulators to evaluate policies against set standards, feeding inputs into revising regulations”.
The draft white paper is an opportunity for the government to set a long-term vision for the sector that enables growth by anticipating changes in this fast-paced environment. Its recognition of the fundamental changes that have taken place in the global broadcasting environment provides a good starting point for discussion about the future of the broadcasting industry in SA, within a globalised framework.
The recognition that over-the-top (OTT) or internet broadcasters are competing with traditional broadcasters is a useful intervention that should lead to a manageable licensing framework for all participants in the broadcasting market. The misinformed view taken by industry regulator the Independent Communications Authority of SA that these services provide a complementary service to pay-television operators risks endangering home-grown market participants, which are at a disadvantage when it comes to content acquisition and market reach beyond SA and African borders. Such disadvantage is likely to translate to job losses and loss of economic investment across the sector. In the ultimate analysis, this will have an impact on the fiscus and the contribution of the audio & audiovisual content services sector to SA’s economic development.
At the same time, the white paper must recognise that inflexible and cumbersome regulations across the board are not the answer for stimulating investment into the audio & audiovisual content services market in SA. As the department of communications & digital technologies concludes its public hearings on the draft white paper this marks a significant moment in the regulation of the audio and audiovisual content services sector in SA. These changes remain contentious given the white paper’s aims to provide definitive answers regarding OTT and video-on-demand services — dynamic global tech advancements that have already had an impact on the broadcasting sector the world over.
There is no doubt that regulation is critical, and perhaps the only option to manage the fallout from fast-paced digital advancements, but introducing more restrictive and onerous regulations is not the way to go.
• Payi is economist and founding director at Nascence Advisory and Research.
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