As SA`s broadcasting industry gets set for a major digital shake-up, a local player aims to push for the transformation of the entire African broadcasting industry. ut he and others feel that pay-TV giant MultiChoice stands in the way ON A CONTINENT where the Naspers pay-TV operation MultiChoice rules the roost, broadcasting mavericks are calling for a rebellion against its dominance and perceived anti-competitiveness in the South African and African broadcasting market.

Like many producers before him, Andrew Jones had a dream to launch a black business and entertainment channel on MultiChoice`s DStv. But the MD of Black Earth Communications` dream has long since faded.

He says `endless waiting` for a response from MultiChoice prompted him to change his plans. "The dream got bigger. We then applied for a broadcasting licence in Botswana in January 2006 to operate an African pay TV service out of Gaberone," says Jones.

"Before we applied for a channel (at MultiChoice) we were confident that we could make an entrepreneurial statement, that there was space for the smaller guys as well. All the paperwork was in place, we had recommendations from the US commercial service, and sponsorship deals in writing from 3M Corporation. But nothing was forthcoming, and we began to realise that MultiChoice never refused us a licence, they just never said yes," Jones says.

After being turned down by Sentech too, Jones applied for a commercial broadcasting licence with the Botswana National Broadcasting Board and today has a draft licence to operate. He hopes to be up and running by the end of the year. Under the name Black Entertainment Satellite Television (BEStv), the company will uplink via Botswana and aims to offer African viewers a mix of educational, entertainment and information programming.

The company will offer HIVtv, a station dedicated to the disease focusing on education and affairs affecting those who are living with HIV, and Jones says, will be syndicated to anyone who wants it.

PUSH FOR TRANSFORMATION

The whole furore with trying to obtain a channel has ignited a new flame in Jones - to push for the transformation of the African broadcasting industry where, in Africa, many regulations are not yet in place and big players such as Telkom, SABC, Sentech and Vodacom are most likely licking their lips at the opportunity to "open up" the market.

Jones`s company is part of an industry in tumultuous change. Production companies, entrepreneurs and investors are waking up to the fact that the African broadcasting industry is undergoing a transformation.

REGULATORY ISSUES

The Independent Communications Au-thority of SA (Icasa) earlier this year announced its invitation for applications for pay TV licences to introduce competition in the market in 2007, and all participants are likely to submit their business plans at the last minute.

Icasa will have to take a stance on where broadcasting and telecommunications meet and whether it would benefit smaller players if big players are allowed to offer broadcasting services with a licence in addition to a telecommunications licence.

"It soon became apparent to us that the big players, instead of protecting the interest of the African market and serving the consumer, have been pursing their own agendas using tactics such as exclusive content agreements, scarce bandwidth, and conditional access systems - to keep new players out of the market. MultiChoice has a psychological stronghold on the local production community, and not a lot of companies are prepared to try something new to rebel against the system," says Jones.

JUST NOT VIABLE

MultiChoice CEO Nolo Letele says Black Earth Communications` proposition was just not economically viable as an offering on DStv.

"We did extensive research into the black American content that they proposed, and found that our subscribers are not all that interested in their scope of the content, and financially it just didn`t make sense for the predominantly white audience we aim at in South Africa.

"We will look at any innovative ideas that could create new channels to our viewers, and do offer black American content, but it is also about the subscriber numbers," he says.

ABOUT THAT DECODER

Black Earth is not the only player unhappy with MultiChoice`s dominance. George Horn of Don`t Panic TV was involved in a legal battle with Icasa and MultiChoice. Three years ago, consumers could buy a smartcard for R2 000 and place it in a DStv decoder, tune into the Don`t Panic TV frequency and view hardcore pornography beamed from Spain.

Icasa then ruled that it was illegal to broadcast pay-TV services to South Africans without a licence. Shortly after that, MultiChoice rolled out encryption technology onto their decoders so that consumers could only view DStv offerings. MultiChoice`s encryption company, Irdeto, operates out of Holland and has worldwide distribution rights over Irdeto products, except in Africa.

Horn argues that it is unfair. "It opens up another can of worms. With most pay-TV subscription services around the world, broadcasting companies rent the exclusive access devices to have control of the content viewed on the boxes. Here, consumers are simply not aware that they are locked into a service on a box which they paid a lot of money for, forfeiting their options, and paying for the privilege," says Horn.

Icasa said earlier this year that it wants to encourage the broadcasting industry to work together and to have open standards and interoperability of decoders, but Icasa`s acting senior manager of broadcasting policy, Pfanani Lishivha, last week confirmed that thus far, negotiations have failed and an outcome will ultimately be decided by the Competition Commission.

However, MultiChoice`s Letele says BEStv has been making waves and trying to access its subscriber base via the use of its technology.

"We have resisted that. We see that as a free ride for broadcasters. They are effectively transmitting content via our boxes without carrying any of the infrastructure costs we have incurred. We feel justified that this is a market that competitors can come in, but they are required to set up shop and do business. We are, however, open to suggestions with broadcasters to share the use of our decoders, if they are willing to come into agreement with us," says Letele.

Letele argues that when customers buy the subsidised decoder, they also buy the service, with continued upgrades and new services available to customers. He said that if they were running on an open box without encryption it brings piracy, security issues, and in turn, irate customers to the fore, the latter being the sole reason why they operate in such a manner.

PORN ON PRINCIPLE

For Horn, of Don`t Panic TV, this wrangle has instilled a passion in him to fight the monopolistic nature of the broadcasting and regulatory industry in South Africa. "Even if I don`t make a cent off it, I am going to make free-to-air broadcasting happen via Don`t Panic TV in Spain." "It`s about the principle. There is nothing Icasa or MultiChoice can do, as free-to-air via satellite because is not covered in the Broadcasting Act and there is currently no jurisdiction over people who transmit from out of the country," says Horn.

Jones echoes this argument, claiming MultiChoice has bought most of the bandwidth on PanAmSat 7 and PanAmSat 10 terrestrial satellites that transmit over sub-Saharan Africa, but is not using it in order to stop competition.

Letele disagrees. "The bandwidth we have on the satellites is simply not enough. Today there is a glut in the market, prices have come down significantly in recent times and we have made use of that. However, we are locked into long-term expensive agreements from the early days of broadcasting in Africa. There are other satellites that have plenty of capacity, such as IntelSat, and this capacity is there for anyone who wants it.

"Its absurd to assume that we (MultiChoice) would buy up all the capacity at such high costs: it simply doesn`t make business sense. We use every bit of capacity we have purchased," says Letele.

NOT WITHOUT A FIGHT

Jones is adamant that to develop his new service, he will have to meet MultiChoice in court, or at the very least in front of the Competition Tribunal, to settle once and for all what they can and cannot do.

"Icasa`s closing dates for pay-TV proposals comes to an end in July 2006, which is sure to result in a lot of hair-splitting on the dos and don`ts of broadcasters, and we will not give up without a fight. Ultimately, the consumers` choice should not be left out of the equation," says Jones.