MultiChoice, SABC deal ‘not in the public interest’

2015-03-01 18:27 - Lloyd Gedye, City Press
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(SABC website)

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Johannesburg - The controversial R550m agreement governing the SABC’s 24-hour news channel on MultiChoice’s DStv bouquet was back in the spotlight as a group of broadcasting and media stakeholders launched a legal bid to get competition authorities to review the deal.

City Press reported that Caxton Publishers, Media Monitoring Africa (MMA) and the SOS: Support Public Broadcasting Coalition have joined forces in the legal bid before the Competition Tribunal, arguing the deal is not in the public interest.

The contract, which was signed by MultiChoice and the SABC in July 2013, has been heavily criticised by the broadcasters’ competitors and civil society.

“When news of the deal broke in 2013, both MMA and SOS ­expressed deep concern as to the nature of the deal,” MMA’s William Bird told City Press. “We both believe it fundamentally works against the best and long-term interests of the SABC and the people it serves.”

City Press has seen the legal papers that were lodged with the tribunal in which the parties argue that – according to their reading of section 12 of the Competition Act – the deal constitutes a “mandatory notifiable merger”.

What this means is that the Competition Commission should have been notified when the deal was signed so that it could have given regulatory approval.

Tribunal must step in

The parties want the tribunal to rule that the merger be placed before the commission for regulatory approval.

“We are not aware of any attempt to notify the Competition Tribunal of such a merger,” said Bird. “If the deal is proven to be a notifiable merger, it will enable us to oppose the merger on the basis that it is not in the public interest for it to take place.”

In December 2013, City Press reported that the former SABC board was handed the MultiChoice-SABC deal as a fait accompli.

Negotiations for this, according to SABC board minutes leaked to City Press at the time, were handled by then communications minister Dina Pule, then SABC group CEO Lulama Mokhobo and then SABC board chairperson Ben Ngubane.

Several former SABC board members, who spoke on condition of anonymity, have confirmed this.

In his affidavit lodged with the tribunal, Caxton’s CEO, Terrence ­Moolman, argues that, through the agreement, MultiChoice has “acquired control” over the SABC’s TV broadcasting policy as well as its programme archives.

Encrypted or not...

Moolman argues that heated debate in South Africa’s broadcasting ­sector about whether the digital terrestrial television (DTT) decoders should be encrypted or not is important context to the deal.

“Until it concluded the agreement with MultiChoice, the SABC supported the delivery of DTT signals to South African viewers on the basis that these signals would be encrypted,” states Moolman in his affidavit. “The SABC has, as a result of concluding the agreement with MultiChoice, aligned itself with MultiChoice by departing from that position.

“The agreement has accordingly vested MultiChoice with the ability to materially influence a fundamental aspect of the SABC’s television broadcasting business,” he argues.

Bird said: “The questions that arise are: who benefits from such a turnaround, and is it in the best interest of the SABC?”

Moolman also argues in his affidavit that the agreement in effect transfers control of the SABC programme archives to MultiChoice.

“The transfer of control of this asset to MultiChoice confers a competitive advantage on an overwhelmingly dominant rival,” argues Moolman.

The “family jewels”

Bird told City Press the programming archives – which he described as the “family jewels” – should be a public resource and not placed in commercial hands.

“The archives are more than simply a collection of old broadcast programmes and material; they are an invaluable public asset of a broadcaster that has unique footage of South Africa’s transition to democracy, including unique footage of [Nelson] Mandela,” he said.

In his affidavit, Moolman points out that communications regulator Icasa asked the commission to look into the agreement in April 2014. However, SABC spokesperson Kaizer Kganyago told City Press Icasa had since withdrawn this referral.

“We therefore advise that you to speak to Icasa regarding this,” said ­Kganyago. “The complainants have chosen to take the matter to the Competition Commission and we will deal with it there and not in the media.”

Icasa did not respond to requests for comment.

MultiChoice said it was not aware of any such application and could not comment on the issues – although it added that the allegations against it by Caxton and the co-applicants had no merit.

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