SUMMARY

SABC MAKES POLICY SUBMISSIONS ON DRAFT WHITE PAPER ON AUDIO AND AUDIOVISUAL
CONTENT SERVICES

The SABC has made a detailed submission to the Department of Communications and Digital
Technologies (DCDT) on the draft White Paper on Audio Audiovisual Content Services. The draft
White Paper proposes the most fundamental review of our broadcasting policy framework in over
two decades. SABC appreciates the opportunity to contribute to the policy and fully agrees with the
DCDT that the current legislative and regulatory framework is outdated. The current framework has
also failed to meet the statutory requirement for “protecting the integrity and viability of public
broadcasting services”.

The SABC has welcomed the new licensing framework and its core principles of technology
neutrality, regulatory parity and fair competition. Comprehensive legislative and regulatory change
is needed for free-to-air broadcasters to be able to fairly compete with other audio and audiovisual
content service providers with light touch regulatory obligations (such as subscription broadcasters)
and on demand content services which have no regulatory obligations whatsoever. As such, the
SABC supports the new definitions of audio and audiovisual content services, including that
‘broadcasting’ will be a subset of these services. The SABC has recommended that online news
services that are subject to the jurisdiction of the Press Code (but may fall under new licensing
framework) should be exempted from any licensing under the new legislative framework.

In its submission to the DCDT, the SABC primarily dealt with elements of the policy framework that
impact directly on the SABC, its funding model and future sustainability.
In summary the SABC submitted proposals on the following:

1. The SABC’s entire submission is based on the accepted principle that the sustainability of
the public broadcaster - through the financing of public mandate programming - is vital to
our constitutional democracy. The SABC supports the Government’s draft policy to
strengthen existing governance structures in an amended SABC Act, based on the principles
set out in recent case law and noting the consequential amendment to the SABC’s MOI to
provide for the Board’s independent appointment of Executive Directors.

(a) The current TV licence fee system should be scrapped and replaced with a device-
independent, tech-neutral household levy for public broadcasting, which would levy all
households, with exemption for the indigent and discounts for pensioners. The household
levy is founded on the fact that every single South African household has the realistic ability
to access public broadcasting content, whether via analogue free-to-air TV and radio
platforms or via DTT, DTH, the internet and streaming services through several mobile apps.
Therefore, the levy is linked to the public’s ability to access public broadcasting content
rather than on the consumption of that content. A similar household levy system was
upheld as constitutional by the German Constitutional Court in 2018 as it was "specifically
for the financing of public service programing that is fundamental to democracy." The
German court also found that even if a household does not use public broadcasting, they
have a "realistic ability to use it”. It should be noted that, despite reports to the contrary,
the SABC is not in favour of licensing or charging any devices or technology in lieu of a
public broadcasting levy.

2. As a pro-competitive measure, the dominant subscription broadcaster (and any future

dominant On Demand Content services as defined) should be required to collect the public
broadcasting household levy from its subscribers. This proposal must be seen in the current
market context after decades of prejudicial legislation and regulation against the SABC
including: the Must Carry regulations which have obliged the SABC to provide its three free-
to-air channels to subscription broadcasters for free (since 2008); Sports Broadcasting
Regulations which failed to protect the public broadcaster from anti-competitive bundling
 of rights and unfair sublicensing criteria (since 2004); and the failure by the regulator to
implement any limitations on advertising on subscription broadcasters as intended by the
Electronic Communications Act (ECA) in 2005. As a first order effect, these measures and
omissions have had a massively negative impact on the SABC’s finances. As a second order
effect, the SABC’s freely-provided channels and programming have been used by a
competitor to build part of its subscription base. However the requirement to collect the
public broadcasting levy will not only fall upon the dominant subscription broadcaster. The
SABC will be responsible for collecting the public broadcasting levy from the balance of
households. The SABC will – in addition to current collection methods - utilise a more
efficient digital collection system, using the SABC’s digital broadcasting, online channels and
OTT streaming platform (to be launched in 2021). The SABC’s proposed move away from the
primarily TV retailer collection model to a public broadcasting household levy is conditional
on the dominant subscription broadcaster being required by law to collect this levy from its
subscribers.

3. The SABC has also made key proposals on funding the public mandate and has defined
public mandate programming as:

“all programming that the SABC is required to broadcast in terms of legislation, ICASA
regulations, licence conditions and/or the SABC’s Editorial Policies: Provided that
programming that is carried by the SABC’s public commercial television and sound
broadcasting services (as currently licensed) shall not be counted towards the cost of the
public mandate unless such programming:
 Is national sports programming as well as developmental and minority sports
programming as required by the Broadcasting Act and/or listed in ICASA’s Sports
Broadcasting Regulations as a national sporting event;
 any form of educational programming; and
 are events of National Importance as defined in the SABC’s 2020 Editorial policies as
including “the opening of Parliament, the budget speech, state occasions such as
visits by foreign dignitaries and category-designated funerals; major
commemorative occasions, and the proceedings of commissions of inquiry, major
 Parliamentary debates, the opening of provincial legislatures, and significant
conferences of the major political parties”.

Rather than requesting an annual sum from National Treasury for public mandate
programming, the relevant governmental departments should allocate and ring-fence a line-
item in their budgets for the relevant public service content. Such funding shall be provided
for programming relevant to the national development mandate of a particular department,
without compromising SABC’s editorial independence. These departments would include
Departments of Health; Basic Education; Higher Education and Training; Sports, Arts and
Culture, GCIS and the DCDT.

Notwithstanding the absence of funding for the public mandate, the SABC is still committed
to breaking even and turning the organisation around. However, it will become more
difficult to properly meet the public mandate in all respects without additional funding, over
and above the public broadcasting household levy.

4. The SABC supports the White Paper proposal to scrap the Must Carry law requiring the
public broadcaster to offer its channels to subscription broadcasters who “must carry” these
channels. This will give the SABC an opportunity to commercially exploit its content through
carriage agreements, whilst achieving universal service and access to its services at the
same time. It is the SABC’s view that the carriage agreements or transmission consents will
contribute significantly to the public broadcaster’s revenues. As submitted to ICASA during
the current regulatory review of Must Carry regulations, the public broadcaster has been
prejudiced by Must Carry regulations which have required the SABC to offer its expensively-
procured channels and programmes for free to well-resourced subscription broadcasters.

5. The SABC opposes the proposal to create a protected monopoly for Sentech as this is in
conflict with the definition and role of the common carrier set out in the Electronic
Communications Act, 2005. While Sentech is required to carry public broadcasting services,
no requirement exists for the SABC to exclusively utilise Sentech for signal distribution
where competitive options exist. The SABC must retain the freedom to choose the best
 platforms for the SABC, noting that the SABC Board and management are required to act in
the best interests of the SABC. Sentech currently has a de facto monopoly of the following
three forms of distribution and transmission: a) analogue terrestrial radio transmission b)
analogue terrestrial television transmission and c) DTT transmission. The tariffs in these
categories must be regulated in line with the ECA and failure by the regulator to do so has
exposed the public broadcaster to monopoly pricing.

6. The SABC has made submissions on the prohibitively high cost of Sentech’s DTT network
which currently reaches only 3.5% of TV households. While the SABC remains committed to
DTT, the current DTT signal distribution cost is unsustainable and the SABC has
recommended tariff regulation on this network and other monopoly networks run by
Sentech. The DTT network achieves 87% population coverage at an extremely high
transmitter and signal distribution cost, whereas the DTH satellite network achieves 100%
population coverage at a very optimised cost. As more and more households migrate to the
DTH platform, the cost per viewer of the DTT network becomes increasingly expensive as
the network serves fewer viewers. The SABC supports the proposed principle of technology
neutrality and continues to implement both DTT and DTH whilst at the same time driving
down the costs of DTT, either through negotiation or regulatory intervention. Taking all this
into account, the SABC submits that the population coverage stipulations for DTT in the
Broadcasting Digital Migration policy and DTT Regulations should also be removed.

Finally the SABC submitted that public broadcasting services – or to use the language of the Draft
White Paper “public audio and audiovisual content services” - still have a huge and important role
to play in society. South African society is scarred by extreme income and social inequalities, high
rates of unemployment and an economic meltdown exacerbated by the Covid-19 pandemic. We
have seen massive pressure on the education system as remote learning cast an unforgiving
spotlight on the digital divide. Artists and the independent content production sector have suffered
greatly, with productions delayed, cancelled and many content businesses went under. The
disturbing proliferation of fake news and misinformation via global social media networks has also
undermined trust in public institutions and fueled division through hate speech, racism and
xenophobia, across the globe.
Notwithstanding these serious challenges during the pandemic, the SABC demonstrated
emphatically that there is a critical need for a sustainable public broadcasting service which
supports our citizens and constitutional democracy. The SABC was able to step up during the
pandemic and launched an Education Channel, helped to get television productions going again and
provided free-to-air access for critical health and public interest briefings on our national television
and radio platforms. Therefore, it is vital for South Africa to reimagine the role of the public
broadcasting service and all its audio and audiovisual content services in the context of major
societal challenges and technological developments.