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Johannesburg - The National African Federated Chamber of Commerce is to serve court papers against the Independent Communications Authority's regulation of pay TV channels, the Chamber announced on Tuesday.
Spokesperson Andisa Ramavhunga said Nafcoc, as representative of a consortium, was objecting to the Icasa regulation and would serve court papers on July 17.
Digital Terrestrial Television (DTT), Nafcoc maintained, would extend "Multichoice's monopoly on the South African pay TV market".
Multichoice enjoyed favoured exclusive status for decades and had built a very strong and competitive business, the consortium maintained.
"Notwithstanding this dominant position it has done little to enable and nurture the local content industry," Ramavhunga said.
With the Icasa regulation, Multichoice would control the pay TV digital terrestrial platform and, if not regulated, might have the same dire consequences for the pay TV market, he said.
Multichoice would offer their own subsidised set-top-box (STB), which would destroy the market for the new STB as it would be priced cheaper and packaged with content offering consumers a cheaper entry into digital television.
"If Multichoice controls the third multiplex it will operate in a way the prevents or retards competition in many ways. New entrants will struggle to match this offer," Ramavhunga said.
"If Multichoice and Orbicom collaborate in operating the multiplex and carrying the signal they could make space or capacity available but at a price that is not sustainable or in a way that creates bottlenecks and challenges to any new entrants.
"In this way they will be perceived to invite and support competition but will frustrate and strangle the competitors."
The consortium objected to the Icasa regulation that stipulated that M-Net could commence with their digital switch over within 90 days of the publication of the regulation.
This allowed M-Net to roll out their digital strategy before the other players, effectively giving them a "first-mover" advantage that would see them maintaining their monopoly.
"The consortium is arguing that the multiplexes should be operated by independent non-aligned entities," Ramavhunga said.
"The consequences of allocating of the terrestrial pay TV spectrum to one dominant player are dire. A lack of alternatives might impact prices and content quality of pay TV. Icasa is thus exposing itself to competition litigation by promulgating such regulation," the consortium maintained.
"The creation of the pay TV multiplex is a deviation from the BDM policy that was issued by the government, and serves to only address the concerns of ETV and Multichoice.
"The process had very limited public consultation and Icasa has proceeded to legislate without holding a public hearing," Ramavhunga said.
Icasa was not immediately available on Tuesday to comment.
- Sapa
