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Broadcasting Policy

A GREEN PAPER FOR PUBLIC DISCUSSION

Published by The Ministry for Posts, Telecommunications & Broadcasting

November 1997

(This Green Paper is also available in printed editions in Afrikaans, Zulu & Northern Sotho)

CONTENTS

Forward
1. Role of Broadcasting in the Future South Africa
2. Broadcasting, the National, Economy and Economic Issues
3. Market Structure
4. Public, Private and Community Broadcasting in South Africa
5. Broadcasting and the Promotion of South African Culture
6. Signal Distribution
7. Convergence and New Media
8. Universal Service and Infrastructure
9. Human Resources Development
10. Regional and Global Strategy
11. Financing the Broadcasting System
12. Glossary of Terms

FOREWORD

The democratic Government seeks to fulfil its mandate to free the airwaves and construct a broadcasting dispensation, which meets the needs of all the South African people. The RDP commits the Government to freeing the airwaves by restructuring the state monopoly in broadcasting into a broadcasting dispensation offering choice in services, content and ownership.

Since the democratisation of the country some steps have already been taken in this direction. From the monopoly of the former State Broadcaster, the SABC, the Community Sector with more than eighty-seven licensed stations has emerged. Eight greenfields radio licences have been issued. The SABC itself has transformed into a Public Broadcasting System. Six SABC regional radio stations were sold to private broadcasters in 1996 in an attempt to open the airwaves and create diversity of views and ownership. A new private free to air television licence will be granted before the end of the financial year. This process demonstrates our commitment to free the airwaves and to restructure broadcasting to provide for access, and diversity in content and ownership.

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The South African Constitution guarantees fundamental rights to all South Africans; including the right to participate in an informed way in all social and political processes. The right to freedom of expression is also guaranteed. Broadcasting is a pervasive means of providing news and information, and as such is fundamental to the realisation of these fundamental rights.

This transformation of broadcasting is underpinned by the need to entrench the democratisation of the South African society and the respect of the Constitutional provisions including the fundamental rights.

It is in this context that on 4 August 1997, I initiated a Policy Process to look into the broadcasting industry and advise Government on key policy considerations.

A group of 26 Stakeholders broadly representative of the interest in the industry; and Chaired by the Rector of the University of the North, and former SABC board member, Prof. Njabulo Ndebele was constituted as the Stakeholders Committee. The group has held regular meetings to deliberate and make recommendations on key issues defining a Broadcasting Policy Framework, which will take South Africa into the 21^st century.

At the same time the public was invited to identify crucial issues that needed discussion in a process of developing a Policy Framework for broadcasting. Numerous submissions by organs of civil society, interested organisations and individuals were received and fed into the work of the Stakeholders Committee.

This Green Paper, adopted by the South African Government is a product of this co-operation and consultation with the Stakeholders and members of the public who contributed. It is now presented to the South African public for discussion and feed back so as to help Government formulate a response to the many questions posed.

This Green Paper is the first part of a consultative process that will lead to the formulation of a Policy Framework for broadcasting. It poses questions, which the public must answer in order to help Government formulate a second part of this consultative process.

The second part of consultation will be a White Paper. This will be Government's position paper on all key issues in broadcasting taking into consideration public input. The White Paper will again be circulated for public debate and discussion. Public comment will be invited to help Government formulate a Legislative Bill, which will be tabled in Parliament for its consideration before a new Law in broadcasting can be passed.

I thank the Stakeholders and the public for their contribution to the process so far. A special thank you to the Technical Task Team for the endless sacrifices in producing an excellent piece of work. I further urge the public to forward their answers to questions posed in the Green Paper so as to help in the formulation of a Policy Framework in broadcasting that will take South Africa into the twenty-first century.

Jay Naidoo,
Minister for Posts, Telecommunications and Broadcasting

Public submissions to the Broadcasting Green paper

Submissions should reach the Department of Communications by not later than 31 January 1998.

Submissions can be forewarded to

CHAPTER 1
Role of Broadcasting in the future South Africa

The Policy Process

In August, '97 the Minister for Posts, Telecommunications and Broadcasting announced the commencement of a Policy Process to provide a framework for the organisation, orderly expansion and regulation of the South African broadcasting system.

This policy process has two facets. Firstly it seeks to review the policies, approaches, practices, structures and regulations defining the South African broadcasting system. Secondly, on the basis of this, its purpose is to devise a new policy framework that both serves the needs of the South African people and at the same time is in accord with the best international practice.

It is a continuation of the process to democratise and free the airwaves, underway since the start of the political transformation of South Africa and its broadcasting system.

It is anchored on the provisions of the South African Constitution and the Independent Broadcasting Authority Act of 1993 and its provisions for the regulation of broadcasting in the public interest in South Africa.

The South African Government, through the democratic and legislative process and in line with international trends, is developing a policy framework to meet the broadcasting needs of all the South African people and expand the broadcasting system to offer more choice in services, content and ownership.

The South African Government is in agreement with the principles contained in the guidelines of the International Telecommunications Union on the three-tier broadcasting governance structure. There are three roles in the governance of broadcasting:

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National Policy formulation

This is the responsibility of a democratically elected government, Parliament, and democratic institutions, as is the case in other areas of life.

Regulation and licensing

This is the domain of an independent regulator.

Service provision

This is the domain of operators and service providers.

The Policy Process is twofold. First is the Green Paper - a document which poses questions to the public. Answers to these questions help Government to formulate its positions on issues that require policy discussion.

The second is a White Paper Process - Government's position on issues that are under discussion. After the White Paper is issued the public has the right to respond and forward further suggestions to Government.

It is within this context that the Minister called representatives of 26 stakeholder organisations to form a committee to identify the central issues that would need to be raised in a Green Paper. Following public submissions on this Green Paper, a White Paper will be issued for comment. This will provide the basis for the formulation of a Bill that will be placed before Parliament for enactment. The intention is that by the end of this consultative process the Government will have put in place a policy framework to take South Africa into the 21st century.

The Broadcasting Policies of the Past:

Until recently, the South African broadcasting system functioned as one of the most politicised broadcasting systems in the world. The apartheid system dictated policies for the benefit of a small minority of the population - the only section entitled to a vote.

Government's Department dictated policies without consultation. The same Department acted as a Regulatory organ functioning with no regard to public consultation and due processes.

The South African Broadcasting Corporation was created as the state broadcaster with a monopoly on the provision of broadcasting services. These services were devised along racial and ethnic divisions that the political order sought to entrench. Both the content and the unequal spread of resources to the services served to confirm racial notions of superiority and inferiority.

This racial preference found expression in all facets of the broadcasting system from the deployment of the transmission network to its exclusionist employment policies and practices. The commissioning policies spawned an independent production industry, which served the white minority both in terms of its content and in terms of creative and financial opportunities.

The entry into the market of new broadcasters in the eighties did nothing to transform this approach to commissioning independent producers. In fact, the new services that emerged in the eighties were in line with this broadcasting ethos. Without exception, they were introduced to further attend to the special broadcasting needs of the dominant political group.

The history of the broadcasting system, and of the SABC, forms the backdrop to key policy and regulatory considerations that must define the new broadcasting dispensation.

Despite the efforts of the past three years since South Africa's democratisation, the majority of the broadcasting services still favour the needs of the past dominant minority sector of the population.

Broadcasting reform

The Independent Broadcasting Authority

Following lengthy negotiations, the Independent Broadcasting Authority Act was enacted by the Transitional Executive Authority in 1993 as part of the negotiated settlement that led to first democratic elections in South Africa in April 1994. In that year, the Independent Broadcasting Authority came into operation, with the responsibility of regulating broadcasting in the public interest as provided for in the South African Constitution.

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The IBA Act ended the near-monopoly state of the broadcasting system and opened the radio and television markets to competition. It provided for the transformation of the state broadcaster into a public broadcaster and made possible the introduction of community broadcasting for the first time.

It also sought to level the broadcasting playing field by prioritising the regulation of the market through cross-media limitation and local content quotas.

The IBA's Triple Inquiry Report of 1995 which resulted from a lengthy public examination of these issues was placed before Parliament in 1996 and set the tone for the development of the South African broadcasting system over the last two years.

Public Broadcasting and the Triple Inquiry Report

Parliament approved the terms of the IBA's Triple Inquiry in 1996. Parliament endorsed the view that the SABC retain three Television channels, 11 radio stations in various languages, four commercial stations and one utility channel. The funding of the public broadcaster was determined as a mix of advertising, sponsorship, licence fee and government grants.

Parliament also endorsed the proposal to sell six of the SABC's regional commercial stations to the private sector.

Parliament endorsed the proposal to integrate the former TVBC broadcasters.

Private broadcasting and the Triple Inquiry Report

Parliament endorsed the proposal that private broadcasting services should bear some public service obligations, depending on their nature and the market in which they operate.

With the sale of 6 SABC stations, private radio as a segment of the broadcasting system expanded. Parliament also endorsed the need to open the radio market further by licensing other private stations in the major centres of the country.

Community broadcasting and the Triple Inquiry Report

Parliament endorsed the proposal to develop this sector of broadcasting through the granting of four-year licenses. An earlier amendment to the IBA Act had permitted the IBA to grant temporary licenses to community broadcasters.

Signal distributors and the Triple Inquiry Report

Parliament endorsed the proposal that Sentech, until then a signal division within the SABC, be separated from the SABC and converted to a public company.

This policy process, in line with international trends, seeks to develop the broadcasting sector to meet the needs of all its citizens. It is also confronted with the dire need for policy to position the country in the global information society. The rapidity with which convergence is occurring demands that governments the world over, review the efficiency and appropriateness of the processes and structures created for the delivery of information services.

Insufficient Parliamentary time and attention were given to the identification of a policy framework within which the IBA could operate. The IBA was established as a Statutory Body to regulate broadcasting activities in the public interest. In practice, it was expected to develop national policy on broadcasting and thereafter regulate its own creation.

In addition, its relationship to the Government and to certain sectors of the broadcasting system were not clearly defined

The statutory definition of the three sectors of the broadcasting system presents many problems. The definition lacks guidelines as to the mandates and objectives of the three sectors. In addition, it defines the three sectors from the point of view of ownership rather than the nature of broadcasting services.

In other countries around the world, independent regulators are given a more prescriptive directive by Parliaments, and by responsible Ministers, than that which has been given to the IBA. They have also been given access to the government policies of the day and have been subject to ministerial direction regarding certain issues, without loss of independence. In this policy process, it is vital to define, in clear terms, the nature of the relationship between Government, Parliament, the IBA, and Broadcasting organisations.

Governance of the broadcasting system operates at three levels. There is a Policy level, a Regulatory level and an Operational level. The role of the various stakeholders in the various levels must be clarified.

The IBA Act contains a number of primary objects, which require the IBA to achieve some crucial objectives without providing the support or the power to achieve them. Reform of the IBA's statutory charter appears to be an urgent priority.

The SABC's charter is in similar need of an overhaul if it is to be given a Parliamentary mandate to remain a public broadcaster.

The future of these two statutory organisations - the IBA and the SABC - is key to the future shape and direction of broadcasting in South Africa. There is no question that they will both continue to exist, but their ultimate responsibility will lie in the nature of their mandates from Parliament.

Both organisations are accountable to Parliament and are bound to meet the mandates given by Parliament and the representatives of the people.

The Private Sector

This is a sector, which has expanded since the liberalisation of the broadcasting system. Six SABC stations were privatised in 1996, 8 green fields licenses were awarded in 1997. A free-to-air Television Service will be licensed in 1998. This sector of the broadcasting system is increasingly playing an important role in the broadcasting system.

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Economically, the commercial private sector has enjoyed the benefits of favourable trading conditions in South Africa. The SABC does not differ fundamentally from this sector because of its commercial activities and structure.

In many countries around the world, the privilege of being given access to a radio frequency is often accompanied by responsibility, a number of obligations and impositions, many designed to achieve desirable social values.

These obligations take the form of:

• Local content quotas
• Specific programme genres (e.g. documentaries, drama, children's programmes)
• The payment of annual fees based on proportions of revenue
• Advertising restrictions (e.g. tobacco products)
• Programme standards or codes (e.g. unbiased news coverage and current affairs programmes)
• Advertising restrictions
• Ownership, control and cross media rules
• Emergency rules
• The provision of a comprehensive range of services
• Universal obligations

The identification and formulation of many of these obligations have been left to the IBA. The IBA has had to come up, on its own initiative, with certain systems due to the lack of directives.

The question arises whether the private broadcasting sector has been required to make a sufficient contribution to reflect the diversity of South Africa and provide services for its entire people. The role and structure of this broadcasting sector in meeting the needs of the South African population deserves attention in view of global trends towards the opening of broadcasting markets.

This is an issue that, on its own, deserves considerable discussion and debate.

The Community Sector

The community sector of broadcasting started in 1993. More than 100 temporary community stations have been licensed. There are two major issues needing resolution with respect to the community sector of broadcasting. The first relates to the expansion of this sector to all the communities in South Africa. This requires an appropriate policy framework and strategies to achieve a signal distribution infrastructure roll out, Human Resources Development and a secure financial base.

The second issue relates to the mandate of the community sector including the relevance, structure and participation of the communities.

In summary, the past has served to create a number of structural difficulties in South African broadcasting which now need to be addressed.

Socio-economic context

The quest to construct a vibrant and democratic dispensation fostering a national identity, equality and a respect for the fundamental rights of all South Africans as entrenched in the new constitution is far from realisation.

South Africa in many ways is still shackled by its past - a society deeply divided along ethnic, racial, class, gender and cultural lines. These divisions continue to define the essence of the social, political, economic and cultural transformation necessary for the creation of a democratic and completely inclusive society.

Despite the gains of the last few years in opening up the broadcasting system and making it more reflective of all South Africans, the legacy of apartheid is very evident in the broadcasting system.

At one level the system displays levels of sophistication that favourably compare with any developing country in the world. The variety of radio and television services owned by the private, public and community sectors offers a range of programmes from news and current affairs to a selection of drama, music and talk shows.

At another level South Africa shares the problems of many developing countries. Large sectors of the population have no choice of services, and sometimes receive no services at all. The majority of South Africans rely on a single service, usually radio, to meet their vast broadcasting needs.

This dichotomy is reflected in the unequal pattern of deployment of broadcasting infrastructure throughout the country - in terms of transmission networks, studios and facilities - which underpins this lack of services. In and around urban areas, services abound. In rural areas, a single radio station and a single television service define the choice of services.

This inequitable allocation of resources undermines the equality of the eleven official languages of the country. Many people who speak these languages are clearly not adequately served by the broadcasting system. The situation is compounded by the fact that while services in English increase with the introduction of new services, a major part of South African society does not use English as a language of communication and interaction in daily life.

In the areas of ownership, management and production, despite the recent inroads, the broadcasting system still displays racial and gender inequalities. These two worlds within one nation provide the socio-economic and socio-political context, which is the point of departure for this Policy Process.

This Process must address the legacy of the past, extend services to all South Africans on one hand and help develop broadcasting system in line with the South African Constitutional Principles.

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The South African Constitution enshrines equality and equal opportunities of all South Africans. The Constitution guarantees Fundamental Rights including the right to Freedom of Expression. It also guarantees equality of all official languages and calls for their development.

These constitutional provisions have a bearing on the nature, type and organisation of the South African broadcasting dispensation embracing the future.

The IBA Act of 1993 was a product of a negotiated settlement and passed by the Transitional Executive Council. The Constitution provides for the establishment through national legislation of an independent regulatory authority to regulate broadcasting in the public interest.

The vision

Broadcasting policy discussions must, on the one hand, focus on facilitating a move away from the legacy of the past, and attempt to forge a broadcasting system that treats all South African citizens equitably, responding to their needs.

On the other hand, broadcasting policy discussions must recognise global trends in the broadcasting industry, advances in technology and the different and diverse requirements for advanced services.

Policy discussions must contribute to integrating broadcasting into the broad strategic repositioning of the communications sector as a fundamental pillar of the South African economy.

Broadcasting policy must help the broadcasting system contribute its fair share to the national economy, and economic contribution must be reflective of the gender and racial demographics of the South African population.

Broadcasting is the most pervasive communications platform. As part of the communications industry, it helps South Africans communicate with each other and provides news and information, which enable South African citizens to participate in the democratic political system. The role played by broadcasting in providing a platform for a democratic political discourse has been important and will still be important in the future. Policy must enhance the role broadcasting plays in enabling South Africans to be informed on all important developments that have a bearing on their future.

Broadcasting policy must ensure services, which offer an opportunity for the representation of the diverse views inherent in society and the access to these diverse services.

Technology is converging at a rapid pace. The convergence process opens up opportunities to provide varied types of services to different segments of the South African population over the existing and new transmission networks. Technology already offers an opportunity to meet the different needs of society and most importantly in new and cost effective ways. A policy framework must integrate and promote the introduction of technologies that will make the South African broadcasting system relevant, accessible, diverse and responsive to the communications needs of the country.

The first phase of broadcasting reform in South Africa took place prior to the first democratic elections, and that reform was focused almost exclusively on the need to ensure that those elections were conducted fairly.

Quite understandably, the major broadcasting policy issues simply could not be dealt with at the time because of the pressing demands to address the political order to define a democratic South Africa.

The time has come now for South African policy-makers to come to grips with these major structural issues.

Any future broadcasting policy for South Africa must seek to resolve industry tensions built on past philosophies and seek to unshackle broadcasting from this legacy. It is at the level of Policy that such contradictions and tensions should be resolved.

Broadcasting and Nation Building

The inauguration of a new democratic government following the 1994 general election has brought about certain changes. Established democratic institutions and sectors of business and civil society, have been industriously mapping out ways of addressing the past and of reconstructing and restructuring various facets of public life in an attempt to put both the country and its people on the path to development and general wellbeing. Public and private institutions are also undergoing changes to reflect this attempt. One of the guiding concepts to these efforts is Nation Building.

Nation building seeks to forge a new South African identity, a common understanding and acceptance of the various cultural backgrounds, which are South Africa's heritage. It seeks to redefine the South African national identity in line with the democratic ethos underpinned by the Constitution. The democratic ethos is based on the principles of respect for the fundamental rights, equality of all South Africans, participatory political and social processes, empowerment of the previously disadvantaged South Africans, respect for the rule of law and the democratic institutions.

Government measures directed at nation building include campaigns such as the restoration of the culture of learning, policies to address gender discrimination, the development of youth, black economic empowerment, job creation and the promotion of small and medium entrepreneurship among the historically disadvantaged and society in general.

Nation Building embraces multi-culturalism, cultural diversity, national reconciliation, national identity and economic empowerment.

The new broad philosophical outlook guiding South African public life is that, despite the various and distinct cultures that make up its society, the South African nation is united in its diversity. This cultural diversity permeates South African society and, when properly acknowledged by the social, cultural and political institutions of the State, unifies it.

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The following principles guide this vision:

• the democratisation of society
• the promotion of an inclusive South African identity
• the acknowledgement of cultural diversity and multiculturalism
• the promotion of all official languages and their development
• the promotion of tolerance and understanding among and between South Africans, and
• the achievement of national reconciliation.

The role of broadcasting services in realising the new national vision requires close examination.

A Non-partisan Broadcasting System:

Many countries around the world, particularly developing countries, see a legitimate role in nation building for their broadcasting services, including private broadcasting services.

Several countries in South East Asia, for example, readily acknowledge the power of broadcasting. Broadcasting systems lay stress on their educational and cultural roles.

Broadcasting is utilised by those countries as a tool for nation building. Broadcasting policy is fully integrated into general government policies with the same objective.

Some of these countries are not, of course, full democracies, as South Africa is now, and it is obviously vital that democratic principles be observed when considering the nature of any obligation relating to nation building that might be imposed upon, or required of, the broadcasting sector.

Any obligation of this kind must not be allowed to impinge upon democratic principles or promote partisan politics.

But even highly developed countries, with very mature broadcasting sectors, acknowledge that broadcasting has a legitimate role to play in the achievement of all inclusive policies, and that unregulated economic forces alone will not produce desirable social outcomes in broadcasting.

Global Context

Broadcasting is nowhere completely unregulated. And broadcasting regulation has traditionally acknowledged that Parliaments, particularly democratically elected Parliaments, can legitimately identify both the nature and extent of the social obligations it feels are desirable goals, in addition to the role that the broadcasting sectors should be required to play in the achievement of those goals.

Even in the most commercially mature broadcasting market in the world - that of the United States of America - regulation has been increased in certain areas in recent years. Obligations to screen a certain minimum quota of children's television programmes, and obligations to classify television programmes for their levels of violence, nudity and language, have recently been imposed on the private sector.

In the United Kingdom, the Independent Television Commission has been empowered by Parliament to determine what the programme line-ups of private television operators should contain. For example, ITC even has the power to determine the actual time-slot when news programmes might be screened.

In Australia, the Parliament has determined that levels of local Australian content can be imposed on commercial operators, as well as obligations to provide a comprehensive range of services in particular areas, or, at least, to contribute to such a range of services by all those operating in particular areas.

Also, of course, the United Kingdom (BBC), Australia (ABC and SBS), and Canada (CBC) all have mature public broadcasters which are, in general terms, obliged to complement, rather than compete with, private broadcasters, insofar as their programming is concerned.

Comprehensive reach, i.e. the role of providing a variety of services to as many citizens as possible, is one of the usual hallmarks of a public broadcasting service.

1.1.

What should be the vision of the broadcasting system in South Africa?

1.2.

How should this vision be achieved?

1.3.

What should be the role of the following institutions in the realisation of a broadcasting vision for South Africa :

• Government?
• Parliament?
• Provincial legislatures?
• The Independent Broadcasting Authority?
• The broadcasting industry/sectors?

1.4.

What should be the role of the broadcasting system in Nation Building?

1.5.

Should broadcasters be required to be non-partisan? If so, how can non-partisanship in broadcasting be achieved?

1.6

Is there a consensus that the broadcasting needs of all South Africans must be met by the broadcasting system as a whole?

1.7

Should the broadcasting system of South Africa improve its contribution to the well-being of South Africans?

1.8

How could the broadcasting system address race and gender inequalities with regard to management, production and ownership of broadcasting services?

1.9

If so, how can it do so in practical ways?

1.10

In general, what must be the objectives of the South African Broadcasting System?

1.11

How can these objectives be sensibly and practically achieved?

1.12

What's the potential of converging technologies in the enhancement of political and socio-cultural development of the country?

1.13

With the convergence of technologies, how can cross-sectoral infrastructure planning be enhanced?

1.14

Which new technologies should be prioritised to help resolve the country's developmental needs?

1.15

What developmental considerations should inform the utilisation of new technologies?

1.16

How should policy and regulations facilitate a free flow of information, and diversify sources of information in the broadcasting system?

1.17

In what way can SMME's be encouraged to develop within the communications and information sector?

1.18

How can policy best achieve a balance between meeting social objectives and ensuring economic growth of the sector, and agencies providing services within the sector?

1.19

How can South Africa maximise opportunities offered by the Globalisation trend, and address the possible dangers of international and multilateral trade negotiations impacting on indigenous South African enterprises?"

1.20

What should the roles and relationships be between the policy makers, the regulator and the service providers in the broadcasting field so that we facilitate a democratic, independent and effective model of policy making, regulation, and service provision?"

1.21

Which policies should be pursued to redress the gender, racial and demographic imbalances of the past?

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CHAPTER 2

Broadcasting, the National Economy and Economic Issues

Broadcasting is part of a growing global information economy. Communications industry global revenues are growing at a rate of 6.1 percent - nearly twice the rate of the world economy. Global broadcasting revenues are estimated at R815 billion.

The total media advertising revenue in South Africa is estimated at R5 billion per annum. The annual broadcasting revenue is estimated at R2 billion. Advertising constitutes the bulk of total broadcast revenue.

Since the establishment of the IBA and moves to open the market, the following investments have been made in South Africa:

• About R600 million to acquire the 6 SABC radio stations that were privatised.
• An estimated sum of R140 million to launch the 8 green fields radio licences.
• An estimated sum of R700 million to start and maintain the first free-to-air private television channel that will be awarded in the first half of 1998.
• R350 million in Ku band and C band DTH services for Southern Africa and Africa respectively.

The contribution of broadcasting to the national economy extends to other related fields:

• South Africa accounts for at least 4 million television sets out of the 12 million sets in the African continent. Projections indicate that the number of TV sets is likely to double by the turn of the century. This represents a vast economic opportunity for manufacturers, suppliers and retailers. This economic opportunity is likely to triple as more and more households in the continent acquire television sets. The ratio of television sets to the population in the continent of Africa is 12:700. Clearly there is great scope for higher levels of household penetration in television.
• The video cassette recorder (VCR), introduced less than 20 years ago, has achieved a sizeable penetration of homes. The role of the VCR in programme reception is likely to grow as more and more services are introduced generating a greater need for time-shifting. Of the 2 million video cassette recorders found throughout Africa, 50% are in South Africa. But by world standards, the South African penetration of VCRs is still very low. Only a quarter of South African households which own a television set also possess a VCR.
• More than a million analogue Pay TV decoders were manufactured over the last ten years in South Africa. These decoders were exported to African countries and some parts of Europe. Pay TV decoders have achieved almost the same penetration of homes as the VCR.
• A new South African industry has evolved in recent years, focused on the hiring of video cassettes for home viewing. The analogue decoder has achieved penetration of households to the same level as the VCR.
• The broadcasting industry is currently employing about ten thousand people in production, programming, management, advertising, sales and marketing, research, and regulation.

Clearly, broadcasting is capable of making a significant, and growing, contribution to the nation's GDP.

Advertising Growth:

Advertising and sponsorship, in a broadcasting context, work in the following ways.

The broadcaster markets programmes to audiences. Viewers watch programmes and patronise services. In turn, the broadcaster sells these audiences to advertisers who are willing to buy advertising time in order to access this market for their products.

South Africa's national advertising revenue pool is currently 0.9% of GDP, compared to 1.6% in European markets, and 2.8% for the United States of America.

This means that South African companies still spend less on advertising their products and services than companies do in other parts of the world. Potentially, there is room for growth in advertising revenue as a percentage of GDP.

Not all services that allow for advertising manage to attract advertising revenue. Advertising revenues depend directly on audiences and the value attached to those audiences by advertisers. Advertisers attach value to audiences consistent with their disposable income or living standards in general.

This reality means that a large section of the population of South Africa cannot be attractive to advertisers who seek people with high incomes and the economic capacity to pay for discretionary goods and services.

Broadcasting services targeting this large, but poor, section of the population therefore stand economically disadvantaged in relation to those that target the upper income groups.

Most South African broadcasting services depend significantly on advertising revenue for their operations.

Private free-to-air broadcasters depend almost exclusively on advertising revenue for their survival.

The SABC depends on a mix of advertising revenues, receiver license fees, sponsorships and other minor sources.

Community broadcasters derive their resources from donors and grants but still see advertising as offering an important source of revenue. Many community broadcasters appear to rely only on advertising revenues, and some have achieved considerable revenues.

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The relatively high dependence of South African broadcasters on advertising revenues poses a difficulty for the achievement of the community's social goals.

The provision of programming to niche audiences, like minority language or dispersed groups, and children, does not deliver mass audiences, or wealthy audiences, to advertisers. Even where they do, social norms prevent the development of active markets.

Part of what could inhibit South African companies from advertising is the price they must pay to advertise through broadcasting. The amount advertisers must pay to advertise is in turn influenced by the number and nature of channels and regulations limiting advertising.

Advertisers have complained of what they term excessive rates charged by the broadcasters. Some have suggested that regulations covering advertising rates should be relaxed so as to prevent operators from fixing the rates in an un-competitive way.

The Green Paper poses the following questions -

2.1

What role can broadcasting play in the growth of the national economy?

2.2

What policies should be put in place to facilitate this growth?

2.3

What linkage should be drawn between broadcasting, liberalisation and growth in the GDP?

2.4

What role can policy play in empowering the previously disadvantaged in the Advertising Sector?

2.5

What should be the realistic proportion of revenue from advertising, transactions and public funds at the current state of South African development? What should be the proportions for the various sectors i.e. public, free-to-air and pay services?

2.6

Should policy incentives be developed to encourage the flow of advertising revenue to services targeting lower income groups, minority language groups, and the like? If so, what policy incentives?

2.7

Should special considerations apply to those broadcasting services targeting lower income groups, minority language groups and the like, so as to encourage investment in new services and to promote those services?

2.7.1 What special considerations, policies and regulations can achieve this objective, and how?

2.7.2 How can policy otherwise encourage the provision of programmes that do not have high appeal to advertisers, but are regarded as socially essential in democratic South Africa?

2.8

Should advertising be self-regulated or be regulated by ASA or by IBA? Why?

2.9

How should advertising be regulated in areas that relate to public interest?

High standards of truth and honesty?

Societal norms?

Fair competition?

2.9.1 Is self-regulation an effective way of regulating societal issues?

2.9.2

Should self-regulation be monitored by the IBA to ensure it meets public interest objectives?

 

2.10

As new services like DTH video and other pay-services enter the market, should restrictions on the amount of advertising through them be limited?

2.11

What impact will new services have on advertising?

2.12

How should policy address such an impact?

The Manufacturing Sector

The broadcasting industry has significant potential to contribute to South Africa's manufacturing sector.

It has already established a manufacturing base for some electronic broadcasting equipment.

Given its leadership role in Africa, particularly sub-Saharan Africa, the potential to provide manufactured goods to Africa for use in broadcasting is worth close assessment.

The special needs of Africa for cheap, simple reception equipment, e.g. radio and television receivers, VCRs, aerials, dishes and set-top boxes, might help define new manufacturing objectives.

Accordingly, manufacturers might be encouraged to invest in South Africa through a variety of mechanisms. The government might be prepared to consider incentives that would assist in the establishment of manufacturing bases within the country.

The promotion of local content in broadcasting and receiver equipment should be considered in the light of government's expressed desire to see the growth of South African industries. In this context care must be taken to ensure that the manufacture of broadcast and receiver equipment goes beyond the assembly of imported component parts.

The establishment of local production facilities within South Africa would appear to be a high priority, in both television and radio.

The more South African broadcasting programmes can be produced locally, the greater the flow-on effects will be in establishing a pool of local skilled personnel able to "connect" with South Africa's diverse peoples.

Programme export potential within Africa and the rest of the world for South African productions should be encouraged wherever possible.

South Africa already compares favourably to other African countries in its production capacity. Many of the continent's countries do not have a sophisticated production base to produce locally, let alone compete internationally. Yet talent abounds in these countries to produce and record, for example, the oral tradition of story-telling handed down generation after generation in Africa.

2.13

Should South Africa establish its own receiving and manufacturing base in broadcasting equipment, and, if so, how?

2.13.1 In which way can the development of the receiving and manufacturing and supply sector be supported?

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2.13.2 Should the broadcasting manufacturing industry be regulated? If so how?

2.14

What role can government policy play in facilitating investment in receiving and manufacturing?

2.15

Should the local receiving and manufacturing industry be favourably-positioned against international suppliers and manufacturers?

2.16

What policies, if any, should be pursued to encourage manufacturers and suppliers to establish a South African base for continental purposes?

2.17

Should import tariffs be lowered to facilitate the lowering of prices?

2.18

If agreements between the South African broadcasting industry and manufacturers are to be encouraged, which categories of equipment should be considered, and in what form should the agreement be structured?

2.19

Should international competition in receiving and manufacturing be promoted?

2.20

How can policy empower the historically disadvantaged to enter the manufacturing sector?

Broadcasting to the African continent:

Technological developments make it possible to supply broadcasting services throughout the African continent and the world.

South Africa shares common problems with greater Africa, such as illiteracy, poverty, and lack of basic infrastructure. On the other hand, it also shares common ground like language and culture with other African countries.

These circumstances should make it worthwhile for South Africans to consider policies designed to encourage the production of programmes that could address the entertainment and developmental needs of audiences outside of South Africa.

In turn, South Africans could receive programmes from other African countries as a form of cultural interchange.

2.20

What measures should be pursued to encourage growth in the South African film and television production industry?

2.21

What could be done to assist South African producers to export to other markets around the world?

2.22

What policy barriers, if any, prevent other African producers using South Africa's production capacity?

 

2.22.1 If there are such barriers, should they be removed, and, if so, how?

 

2.23

How can policy encourage co-operation between African producers to increase the share of African programmes in the world market?

2.24

What policies should encourage the supply of broadcasting services that are relevant within the context of developmental and cultural needs of the African continent ?

2.25

How should issues relating to pirates/grey products be addressed through the policy framework?

Ownership and Investment:

Cross Ownership

Cross Ownership provisions seek to prevent the concentration of ownership and the creation of monopolies in both the print and electronic media.

The IBA Act provides for the regulation of cross media control. The cross media control of broadcasting services is subject to such limitations as from time to time are determined by the National Assembly acting on recommendations of the IBA and in accordance with the provisions of the constitution.

Cross media limitations were designed to affect the newspapers. In the world of convergence, new forms of media are emerging and likely to proliferate. Consideration should apply as to which other forms of media warrant to be covered by the limitations on cross media ownership.

On the other hand, convergence, technological innovation makes it possible for entities to distribute information in many formats. Once information is acquired, it can be stored, changed and distributed in any other form. The entry of the Internet into the broadcasting domain will mean an ability by newspapers to offer narrow cast services over the Internet. In turn broadcasters can offer and distribute news and information in the electronic and print forms.

Media organisations from other parts of the world have demonstrated an interest in the evolution of the South African broadcasting system. The overseas organisations have been for some time operating in policy environments which allow for less stringent regulations. In this way they obtain economies of scale which might disadvantage South African companies prevented by limitations on cross media control as presently constituted.

2.26

Should cross media limitations be retained in the South African broadcasting legislation?

2.27

Which new forms of media must be affected cross media limitations, in addition to the newspapers?

2.28

What should be the specific maximum percentage of financial and /or voting interest held in a newspaper, or other new media deemed appropriate for cross- media limitations.

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Ownership by historically disadvantaged South Africans

The IBA Act mandates the IBA to encourage ownership and control of broadcasting services by persons from historically disadvantaged groups. Some strides have been made in the licensing of private and community sectors of broadcasting.

On the other hand different companies composed of people from the disadvantaged backgrounds have complained of practical problems they experience in accessing the financial markets. Because of the background of the people involved in these companies, they have no financial resources, at times, to develop credible business plans. This prevents a significant part of the disadvantaged section from making the proper use of this economic opportunity.

2.29

How should the Authority encourage the ownership and control of broadcasting services by persons from the disadvantaged communities?

2.30

Are there specific licenses or license categories that policy should earmark as areas of achieving ownership and control of broadcasting services by persons from historically disadvantaged groups?

2.31

How can policy promote access to financial markets for people from historically disadvantaged backgrounds?

Foreign Investment

Foreign investment in broadcasting enterprises can undoubtedly help make South African broadcasting more professional and competitive, and is undoubtedly welcome.

Foreign skills in distribution, production and the like can only assist in the growth of the industry, thereby making more room for local skills to grow and prosper.

At the present time there is a cap of 20% on foreign ownership, and this is justified by social and political factors. This policy seeks to ensure that South Africa's broadcasting system continues to be owned and operated by South Africans. This arrangement serves to guarantee South Africa's sovereignty in political and cultural fields.

But the globalisation of the information, broadcasting and communications industries brings together companies that traditionally did not co-operate across industries and borders. The economies of scale at times dictate co-operation of companies and entities.

Any potential to further encourage foreign investment should be seriously considered.

The Green Paper poses the following questions -

2.32

Is there any need to review South Africa's policy on foreign ownership in the broadcasting sector?

2.32.1 If so, are there specific areas of the broadcasting industry in which foreign investment might be encouraged without jeopardising the fundamental principle that South Africans should remain in control of their own broadcasting services? What considerations should guide South African policy on foreign ownership?

 

2.33

Are there specific areas of the broadcasting industry in which foreign investments could be encouraged without jeopardising the ownership patterns in the broadcasting industry?

2.34

How should control be defined within the broadcasting industry/business?

2.35

What should be the consideration and levels of cross-ownership and ownership investment?

CHAPTER 3

Market Structure

Broadcasting exists in a framework of identified national goals of democracy, development and nation building. It is vital that a market structure exists wherein broadcasters are able to further these national goals within the context of a healthy, balanced and vibrant industry. The challenge then, is to formulate a policy framework that will create an environment which will allow the national broadcasting system to advance public interest objectives and values, and one which will ensure the growth of the South African economy and efficiency in the delivery of services.

Principles:

The principles upon which such a broadcasting policy framework may be anchored are already enshrined in the Constitution for a democratic South Africa and they include the following:

• Access;
• Diversity;
• Fair competition
• Choice; and
• Equality.

Implicit in these principles is the need to make broadcasting accessible to all citizens and to ensure diversity of media services. These principles also aim to ensure the diversity of ownership including cultural and linguistic diversity in content material and representation of groups of people in society. It also means opening up the market to competitive forces, whilst promoting fairness and equality of opportunity to citizens in a manner which will ensure the availability of real choices for all sectors of society. This would mean the availability of a broad spectrum of choices in programming content and choice in the delivery of services.

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Historic market structure:

A closer look of the South African broadcasting sector will reveal that it is characterised by a market structure that has, to a great extent 'been dominated by monopolies and an oligopoly. Only until recently, with the advent of some degree of liberalisation has there been a release of the pent up competitive spirit in some sectors.

It is an industry in which the evolution of the delivery of content services in Radio and Television has been the defining factor of the market structure.

On the supply-side, the level of growth and maturity of the Radio and Television content delivery services has determined the pace of evolution and liberalisation of the broadcasting system from monopoly to a competitive environment. From the demand-side this has also meant that various sectors of the society were denied of choice, diversity and virtually all the principles outlined above by monopoly suppliers who determined the levels of quality and nature of services delivered.

A new policy framework must aim at breaking this stranglehold of the broadcasting market structure by monopolies. It must seek to depart from a premise that acknowledges that the development of broadcasting needs to take place within a policy framework, which supports dynamic competition in the market. It must be one which seeks to encourage private investment, support a flexible regulatory environment and allows South African citizens open access to a variety of choices in services, networks and other essential facilities on a fair and equitable basis.

3.1

How should the broadcasting sector be further liberalised? Should the current situation be encouraged where monopolies are predominant? Should it be opened up to market forces to become a market-driven competition or should it be a regulated competition? How should this be achieved, and Why?

3.2

Does South Africa require a broadcasting market structure that is driven by a public mandate or one which is driven by market forces?

3.3

What policies would be appropriate to ensure that liberalisation will lead to diversity of ownership / accessibility / fairness and choice in the radio and television markets?

3.4

Is the three tier system of broadcasting as regulated under current legislation - public /private / community - a valid mechanism of regulating the different sectors of the market?

3.5

What kind of regulatory model would be appropriate to ensure the evolution of a market structure that promotes diversity, fairness, accessibility and choice?

Liberalisation of Radio:

Twenty-five Radio services were under the control of the SABC until the establishment of the IBA, three years ago. One Radio service in the country was under the control of a private company. The birth of the new regulatory authority, however, brought about a radical transformation.

Within three years of the existence of a regulatory environment the country has witnessed the unbundling of monopoly control in radio.

The sale of the six SABC stations was the initial step. The granting of new broadcast licenses saw the sudden expansion of the private commercial sector of the Radio market.

Nearly a hundred community licenses have so far been awarded on temporary basis by the IBA. The result is that the Radio Market has grown from a few stations to more than a hundred stations.

3.6

Has the restructuring of the Radio market ensured an equitable redistribution of ownership, access, program diversity and empowerment?

3.6.1 To what extent has the restructuring of the radio market delivered a diversity of services to the broad spectrum of society?

 

3.7

Which new forms of Radio services should be introduced to augment the established and provide for more choice, diversity and to serve the broad spectrum of the South African society?

3.8

How can policy and regulation promote fair competition between the different players in the Radio market?

Liberalisation of the Television market:

The Television market has been characterised by a much slower pace of liberalisation compared to radio.

Television services were introduced by the SABC in 1976. The first and only form of competition was allowed to enter the market after ten years and even then under the tight constraints of delivering services through the limitations of being an encrypted subscription based outlet. This method of delivery ensured that services were only accessible to a limited sector of society, who were (a) able to acquire the additional technology to receive the encrypted signals, and (b) could afford the monthly subscription fee. The broad spectrum of society was still denied of choice and access through the barriers of language, limited reach of signals and prohibitive tariffs.

The lowering of barriers of entry to the new single player, albeit on a limited scale, only created a television market structure that has been dominated by this duopoly until now.

This structure has seen one player dominating the terrestrial free-to-air market, and the other player becoming the sole provider of a terrestrial pay television service.

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Free-to-Air Television Market

Until recently with the advent of a variety of new technologies, the predominant means of delivering television signals to a majority of homes in most countries including South Africa has been through wireless transmission over the terrestrial frequency spectrum which is commonly known as free-to-air television. In this country thus far, only the three channels of the SABC have been transmitted over this medium and are easily received over-the air using a simple reception antenna. These channels are licensed as free-to-air terrestrial broadcasters and have maintained a monopoly of supply in this free-to-air market.

Free-to-air transmission of services may be used for the delivery of services on a national or regional basis.

A new terrestrial free-to-air license service will be issued by the IBA to allow for the entry of a new player into the TV market in general, and the terrestrial free to air market in particular. It will become the fourth free-to-air service, which will be funded primarily through advertising revenue and thus will not be encrypted.

The entry of this new player in the Television market will undoubtedly provide choice, and programming diversity to audiences. It will offer more opportunities to local producers to market themselves and their productions. It will create an environment in which the system can be made to operate in the public interest to the extent that license conditions may outline public interest objectives that it must meet.

The new entrant will also have an impact on the revenue base of the other players in the Television market because of its predominant reliance on advertising income for its survival. As such it could affect the financial viability and sustainability of the other players. With additional competition and its ability to capture increased market share, it can be expected to generate new advertising revenues beyond current levels.

In turn the established players could attempt to prevent the successful entry of the new channel. In other parts of the world, dominant players have used a variety of means to deny entry into the market by the new players. These could take the form of:

The playing field must therefore be levelled and all players allowed competition on a fair, equitable basis to better meet public interest. This requires regulation and the monitoring of the established TV players. The new entrant must also be monitored to ensure compliance with license conditions to meet public interest objectives.

The entry of a new player throws up a question as to what pace the TV market is further liberalised and what could be the role of the new and established services.

3.9

Should more players be licensed into the terrestrial free-to-air market? And how many more?

3.10

Should competition be encouraged into the terrestrial free-to-air market at a regional level? If so Why? How many operators should be allowed to enter? In which provinces and why?

3.11

What other considerations should be taken into account in licensing new players nationally?

3.12

At what pace and within what time frame should one or more players be allowed to enter the national market?

3.13

What needs of the various sectors of society and the broadcasting industry should be the focus of further liberalisation of the TV market?

3.14

How can policy and regulation promote fair competition between the different players in the TV market?

3.14.1 Should the acquisition of programming materials be on a non-exclusive basis?

3.14.2 Should subscription rates be monitored and regulated?

Pay-TV Market

A single player from inception to the present has dominated the Pay-TV market. There are many factors, which are responsible for this situation. Some of these could be:

Technological innovation has produced countless ways in which Pay-TV can be delivered to subscribers. Technology in the form of MMDS, satellite and cable make it possible to deliver multi-channel services at far more cost efficient ways. New markets have opened up. A whole new range of speciality services offering exclusive news, sports and children's programmes to different audience segments are a reality in other Television markets.

New technologies make it imperative that due consideration be given to this expanding sector of the TV market.

Before policy options can be developed for the Pay-TV markets, it is important to analyse possible problems which could prevent the entry of new players, and frustrate the introduction of competitive conditions. International precedence has shown that opening up the Pay-TV market to competitive forces frequently leads to the emergence of a new set of dynamics that may require regulatory and policy intervention.

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Technology as A Barrier of Entry

As a subscription based form of television, the growth and success of Pay-TV is very dependent on the use of technology for ensuring conditional access and for managing the subscription system.

Pay television operators use a variety of methods to prevent unauthorised access to the service(s) by the broad public who normally view through free-to-air transmission. Access to such services is conditional on the payment of a premium to the operator on a periodic subscription basis. The viewer is then provided with a viewing mechanism that may be a physical piece of technology and/or software switching device to enable the operator to control access.

A choice of a particular technology has implications to the development of the market and costs to the consumers. If different service providers choose different technologies, (that are not compatible) consumers have to acquire different receiver equipment for different services.

Established Pay-TV operators can use technology to deny entry to new services. One way for regulation to counter this manoeuvre is to deny the right of the multi-channel signal distributor to offer channels on an exclusive basis. This would mean that the consumer would be able to receive the full slate of services from one supplier or another. It would also ensure that new South African channels reached the widest possible audience and revenue base.

Subscriber base Management System

A number of key functions are required on the part of the operator to manage the subscriber base. These functions include: a subscriber management system (SMS), which manages the decoder population through over-the-air addressing of embedded chip-sets in the decoder; a subscriber authorisation system, which is used to switch off decoders upon default of payment or to enable them and an encryption system which scrambles the signal to ensure conditional access. A number of other technical systems are also in place to ensure conditional access by the consumer through the use of hardware and software technology.

The size of subscriber base and its roll-out determines the levels of investments required in starting Pay-TV in case there are barriers to accessing the established subscriber management system. A possible measure would be to ensure that the SMS operator is treated according to common carrier regulation, requiring access to alternative subscription based service offerings.

3.15

Should Conditional access to subscription based services be regulated?

3.16

How should technological standards and compatibility be encouraged?

3.17

Should technological standards and their compatibility be encouraged through regulation or factored into the licensing process? How?

Content creation/ rights holders and broadcasters:

The increase in channels leads to an increase in demand for television programmes in properly regulated Television Markets. A major bottleneck relates to the ownership of programming broadcast rights. Rights holders are aware of their market power and consider Pay-TV as an important source of additional revenue, which can only grow in a multi-channel environment. Lobbying and paying high prices for exclusivity to these rights already underline the importance of such rights in a competitive environment.

In many fields of activity there is only one rights holder who is the controlling body thus complicating matters. In South Africa there is only one association controlling Rugby, Soccer, Tennis etc.

The exclusive relationship between content providers/rights holders and Pay-TV providers can prevent the emergence of competitive conditions in the Pay-TV market. On the other hand, it is likely that new pay-TV services will obtain an effective franchise for that category of programming (sports, news, youth, movies, etc.), which means that there will not be rights competition among the pay channels.

The rights issue for subscription services spills over to free to air broadcasting. Exclusivity acquired by the subscription service may deny access to programming of national importance (e.g. rugby finals) for those who do not subscribe to the pay-TV services. There may be need for regulation to ensure that the over-the-air services are not denied such access.

The entry of new pay-TV channels affords the opportunity of South Africa to build its own slate of domestically owned and programmed services - rather than simply importing the foreign channel of a similar category. At present, notwithstanding a few locally packaged programmes on some of its channels, DSTV primarily offers a diet of foreign services (e.g. MTV, TNT, Cartoon Network, BET on Jazz, Discovery, etc.). In this arrangement there is a missed opportunity to insert South African originated content (e.g. movies, nature and travel programs, South African music videos, etc).

It might be possible to regain this opportunity through the licensing process for new multi-channel technologies (e.g. MMDS). Indeed, action could be taken to bring the existing DTH services into the broadcasting regulatory framework (not merely the telecommunications framework). And, the right could be reserved to have these services converted to South African services. In this way, the ownership and content would be restructured to be more reflective of the South African reality. It would mean that the best of foreign would be programmed along side of the best of South African.

3.18

Should a competitive market be encouraged in the Pay-TV Service sector?

3.19

In what ways can competition be encouraged? And in what forms of Pay-TV?

3.20

What Public Interest can realistically be met by this sector of broadcasting?

3.21

Should the objective be to establish a range of South African pay-TV services? In what priority categories?

education - formal and life long

music television

all-news

all-sports

history/geography

nature/wildlife/travel

single language, non-English

children's/youth

parliamentary/public affairs

religious

3.22

What should be the appropriate policy and regulatory approach towards the pay-television market?

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3.22.1 Should "Open Time" over the terrestrial frequencies by the monopoly Pay-TV be allowed to remain.

3.22.2 Should any subscription based television services be permitted to also compete in the free-to-air terrestrial market?

3.22.3 Should Pay-TV be regulated as a separate class of license with specific licensing conditions?

3.22.4 Should license conditions specify local content requirements and how?

3.22.5 Should licensed multi-channel signal distributors be required to provide priority carriage for licensed South African channels? Should multi-channel signal providers be forbidden to make exclusive affiliation arrangements with South African channels?

3.22.6 Should South African channel wholesale rates be regulated to ensure they participate adequately in the subscription revenue stream?

3.22.7 Should there be a moratorium on common ownership by the same party of signal distribution suppliers and programming services in the pay-TV market?

3.23

How should he exclusive relationship between content providers and Pay-TV be addressed?

Convergence and New technologies

The impact of convergence on market structure is considered in chapter 7

CHAPTER 4

Public, Private and Community Broadcasting in South Africa

The broadcasting system in South Africa has undergone a process of fundamental change in the past three years.

The SABC, once the custodian of a monopoly in both free-to-air television and radio, has shed a number of its commercial radio stations. These were sold to private broadcasters to further the Government's fundamental commitment to open up and free the airwaves. A new commercial free-to-air television license is about to be allocated. A large number of community radio licenses have already been allocated by the IBA.

In the mid-1980s, a subscription television service called M-Net commenced operation in South Africa. Its service is transmitted via a mix of satellite and terrestrial networks.

A regional television service, known as BOP TV, also provides a free-to-air service in and around the North West Province and Johannesburg areas.

Trinity Television broadcasts as a terrestrial religious community station in the Eastern Cape province.

The South African free-to-air broadcasting market is no longer completely dominated by the monopoly of the SABC. Progress has been made in this direction, to introduce new broadcasting licenses that fall within the three categories identified in the Independent Broadcasting Authority Act of 1993, viz., public, private and community broadcasting services (radio and television).

This three-tier structure saw legislative policy encouraging a diverse set of services designed to meet the broadcasting needs of South Africans.

The IBA Act, though restructuring the broadcasting system into three categories of license, did not spell out the role of each sector.

Definitions of each of the different categories of service are to be found in the IBA Act, defining license category, and an assessment of the criteria for the license allocation process.

Taking the present state of the community license sector into account, there does seem to have been a blurring of the lines when Parliament originally set out to categorise the sectors.

The continued uneasy status of the SABC contributes significantly to the confusion about these divisions.

Public Broadcasting:

A public service broadcaster refers to a broadcasting service which seeks to cater for all audiences, and all tastes in society irrespective of geographic location, class and cultural background.

The guiding beacon of a public broadcaster is, first and foremost, the provision of both a diverse and multiple range of programming to meet the broadcasting requirements, norms and disposition of the population.

This covers the entire spectrum of popular programmes like sitcoms and game shows to niche minority programmes like the opera, documentaries on specific topics, etc.

A feature distinguishing the public broadcaster is also the question of its ownership. The public broadcaster is owned by the public. Therefore, in its functions, it is accountable to its owners - the public - through Parliament. In theory, the public as owners should therefore have a right to define the public broadcaster, and this is normally done through the elected community's representatives who pass appropriate laws to that effect.

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In many countries broadcasting services are licensed to carry out certain obligations in their programming to satisfy their unique public needs.

These obligations are commonly referred to as the Public Mandate.

The Public Mandate for broadcasting services has to do with addressing the needs of the community in a given country, and these requirements differ from one country to another. What constitutes the Public Mandate for one country, may not be so for another.

South Africa is unique in that it reflects the characteristics of both a developing and a developed country. South Africa's geographical composition is made up of nine provinces, each displaying different social strata in terms of race, religion, culture, class and gender cleavages.

In addition, there are also what may be referred to as 'marginalised' social groups which find themselves on the periphery of South African public life, e.g., the poor and the unemployed, members of minority language groups, the geographically isolated, the disabled and women.

Because of the cleavages which separatist policies of many years imposed upon South African society, the country has inherited a background in which access to public amenities of education, health and welfare are skewed to the benefit of a few at the expense of the majority, on racial grounds.

With the inauguration of a democratic order three years ago, the needs of the South African public had to be re-defined. The role that broadcasting services would play in addressing these needs was seen at the time to be critical, although the overriding broadcasting priority of the day related to ensuring fair behaviour by the SABC during the 1994 elections.

The TBVC Broadcasters

Several broadcasting entities were established in the former Bantustans. These services operated as state broadcasters in line with the political ethos of separate development. The democratisation of broadcasting has been accompanied by intense discussion on the role of the services in serving the needs of South Africans and their structural re-organisation and integration into the South African broadcasting system.

The Triple Inquiry Report made several recommendations on the integration of these services. In the main the Report recommended a three pronged approach:

• the sale of some services in line with the privatisation of the 6 SABC stations,
• integration of some services with the services of the SABC,
• Closure of some services.

The Triple Inquiry Report is assumed to be the basis for the integration of the TBVC broadcasters. In line with this determination, services that were to be integrated into SABC services must be considered as an integral part of the discussion on the Public Sector of Broadcasting. Services that were to be privatised must be considered as part of the discussion on the role of the private sector.

Some Other Public Broadcast Models:

In Canada, the provision of programme material in the two founding languages of English and French is part of the Public Mandate for the Canadian Broadcasting Corporation.

In the UK, despite its First World status with an advanced infrastructure and communication network, the Broadcasting Act of 1990 stipulates a number of requirements, which a private broadcasting license applicant must satisfy before an application can be considered.

The UK television regulator, the Independent Television Commission, is required by statute to license private television services " in the manner best calculated to ensure the provision of high quality programmes which would appeal to a variety of tastes and interests".

In addition, the ITC is further required by statute to use a 'quality threshold' which broadcasting license applicants must 'pass' before it considers them for the bid. This includes programme proposals for:

• Providing high quality news and current affairs
• Providing programmes of interest to local people
• The devotion of 25 percent of broadcasting time to independent productions, and
• Enabling the deaf to decipher programme material.

The ITC normally awards a license to the highest cash bidder, but an exception to this provision is considered in circumstances where an applicant submits a programme proposal of exceptionally high standard.

Private broadcasting services in the UK are therefore required to satisfy certain programme criteria of almost the same nature as the public broadcaster, the British Broadcasting Corporation.

The BBC has its own statutory charter, and an independent Board.

In Australia the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS) have their own statutory charters, and independent Boards.

Most statutory charters for public broadcasters require them to provide high quality, leading-edge programming which will be relevant to the whole community they serve, and relieve them of the pressures of commercialisation. But the SBS, for example, whose statutory charter is aimed at the non-English speaking sector of Australia's multicultural community, is allowed to screen sponsorship announcements (a form of advertising).

In South Africa, the IBA Act requires the authority to ensure that, "in the provision of public broadcasting services -

• the needs of language, cultural and religious groups;
• the needs of the constituent regions of the Republic and local communities; and
• the need for educational programmes, are duly taken into account".

In the South African context, there are a number of factors, which would reflect what the needs of the South African public are:

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• to reflect the cultural diversity and multiculturalism that make up South African society, its various religious and traditional practices
• to promote the use and development of all official languages, particularly those which were disadvantaged in the past
• to promote developmental goals which would empower the poor and those who live in rural and remote areas of the country
• to reflect and promote the plight of the disabled to address gender issues and reflect and promote marginalised social groups
• to promote access to education, health and welfare services to reflect the plight and promote the development of children and youth
• to promote harmony, and national reconciliation
• to promote inter-provincial understanding
• to provide news and information that enable South Africans to interact with democratic institutions in line with the Constitution

Whether these needs - particularly language requirements - are being met after three years of operation of the IBA Act is not obvious. Clearly, much more remains to be done.

The present guidance given by the IBA Act on what should characterise the promotion of public broadcasting services appears to be inadequate. Much more could be done to provide additional detail and clarity, not least about the role and future of the South African Broadcasting Corporation.

The South African Broadcasting Corporation (SABC):

The SABC, because of its many years as the dominant broadcaster of South Africa, has been commonly regarded as its public broadcaster.

The IBA Act defines a "public broadcasting service" as meaning, inter alia, any SABC service which also includes a commercially operated broadcasting service provided by the SABC or any other organ of the State.

The IBA Act also requires broadcasters to carry national, regional and local programmes of interest to the general public.

No doubt this definition was the best that could be done at the time, but it served only to define and entrench the status quo.

Apart from the definition found in the IBA Act, when one examines the SABC's present functions and structure, it does not display many characteristics of a public service broadcaster.

Depending upon the individual's perspective, the SABC could be seen as either a Public Broadcaster or Commercial broadcaster.

Its principal source of revenue is from the sale of advertising.

No doubt the widespread non-payment of receiver license fees contributes to the financial climate in which the SABC has to operate.

Certain vital aspects of the SABC appear to be in need of serious review.

Many of its deficiencies arise from the nature of, and stem from, the services it has to deliver from its financial base. This is particularly the case in the field of free-to-air television.

But in television the SABC continues to transmit three major channels, which are running profitably according to recent reports. The only private free-to-air television service will be licensed in 1998.

This structure of the free-to-air raises a number of questions, which must be addressed if the broadcasting system is to better meet the needs of the country. The ability of a single player to increase public interest programming in multi-channel environment is one of the questions deserving serious consideration. If other operators enter the domain of free-to-air television in line with principles of diversifying programme content and international trends, the tendency will be to segment the audiences and therefore to drain the coffers of the public broadcaster.

The reliance of the very same dominant player on advertising revenue and therefore the need to attract advertising through programming must also be considered within a framework of the need to increase programmes that address public needs. As indicated earlier, not all programmes that attract advertising are addressing public needs other than entertainment needs. South Africa is a multi-cultural country whose broadcasting needs emanate from its nature. Successful foreign commercial programming at times has been criticised for the way certain cultures are ignored and marginalised.

The South African Broadcasting Corporation is also involved in major overhaul of its own internal operations. Such transformation could take some time before an appropriate structure evolves. In this scenario the ability of the country to increase programmes that meet public needs would depend on all the factors mentioned above.

The SABC will continue, unless structural change is made, to dominate South Africa's present free-to-air television market. This will continue even after the introduction of competition in the form of a fourth, private channel. It is ideally positioned to dominate the industry for years to come, without a mandate to increase its contribution to meeting the needs of the country.

If Parliament is to seek to foster a public broadcasting system that is inclusive of all South Africans and in line with South African broadcasting needs, and if the SABC is to form the nucleus of such a broadcasting system, major structural changes to the SABC and to the South African television industry is inevitable.

Public inputs have led to the development of some models, which might serve to illustrate how the television industry and the SABC might be restructured. The aims are to produce a broadcasting system for South Africa which is much more inclusive of South Africans, which keeps to a minimum the calls on government funds for public broadcasting services, and which maximises the opportunities for private broadcasters to deliver commercial services towards meeting public needs.

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Model A

This is a status quo model. It departs from the premise that the organisational restructuring of the SABC is a process that takes time. The model acknowledges that the SABC has just emerged from a major repositioning to achieve financial integrity and self-sufficiency.

The SABC has a portfolio of three television services and sixteen radio services. The SABC radio services comprise of eleven language services, four commercial stations and one utility station.

In this model the portfolio of the SABC will remain the same. The public service obligations will remain as currently determined by the IBA and subject to adjustments prescribed by the Authority.

The funding mix of the SABC will remain a combination of advertising revenue, project based funding from government, licence fees and other sources.

This status quo model would be protected for three years before any new round of major restructuring of SABC services can be undertaken.

During the three years, the SABC would be allowed to maximise its share of the total advertising revenue. Project based government funding will be maintained on a sliding scale, leading to the end of government funding in the third year. SABC would develop and implement its strategy of maximising efficiencies on licence fee collection.

Model B

A new statutory corporation, known as the SABC, is created by Parliament with a traditional public broadcasting charter, which compels it to provide services to all South Africans, in both radio and television.

This organisation is to be given one of the television channels with the privatisation of some services in line with the privatisation of the commercial services currently licensed to the corporation presently known as the SABC, together with the necessary transmission and production infrastructure necessary for it to discharge its new function.

This organisation is to be funded by the sum total of license fees presently collected for receivers, and the balance of necessary deficit is to be funded directly by the government. Advertising will not be allowed on this channel.

The present SABC will be unbundled into two private television corporations each in possession of a single, national channel. Each would be fully privatised and be sold to private broadcasting interests.

Together with the proposed fourth commercial service the IBA is shortly expected to allocate, South Africa would have the benefit of three private free-to-air television services, and one public broadcaster channel.

Private broadcasters should be obliged to pay the government reasonable annual fees on revenue, and obliged to fulfil more objectives of the broadcasting system.

The new SABC, as a statutory corporation, would be limited in its contribution to meet objectives of the broadcasting system.

Those radio services presently operated by the current SABC would be further reviewed, and services that appeared to fall within the statutory charter of the new public broadcaster would be folded into the new statutory corporation.

Radio services that were essentially commercial would be sold to the private sector.

Model C

This would be the same as Model A except that the new statutory corporation would be given two, not one, of the television channels presently operated by the SABC.

One of these channels could be a traditional public broadcast channel, i.e., without advertising, but the second channel could be allowed some modest level of advertising.

The remaining SABC channel could be partly or fully privatised.

If the proposed fourth service was to be allocated, South Africa would then enjoy two major commercial free-to-air channels, supported by advertising revenue, and two public broadcast channels.

Model D

This would be the same as Model B except that both public broadcast channels would be allowed some modest measure of sponsorship/advertising revenue.

Model E

The SABC might be re-organised to be region-based.

Instead of unbundling it and privatising one or two of its television channels, the focus of some of its programming (the whole of one channel, if not more) should be directed to traditional public broadcasting objectives at regional level. This should include official language programming, while the balance (at least the whole of one channel) should be devoted to purely commercial programming.

A full advertising complement should be allowed on the latter, but not the former. Advertising revenues would, under this model, continue to be retained within the SABC, and cross-subsidisation of services could occur.

The SABC would still require statutory reconstruction, as would the relevant provisions of the IBA Act.

The fate of SABC's present radio services would need to be further reviewed, along the lines mentioned in Model D.

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Model F

Model F would be the same as the present SABC model, with the exception that it would not be an end in itself, but rather a staging post along the path to more fundamental structural adjustment.

This model, while persisting with the present uneasy amalgamation of commercial and public responsibilities, could be a transitional arrangement that might persist for several years until the circumstances were appropriate for a more major structural unbundling.

In the interim the SABC would be mandated to start new services aimed at increasing its capacity to deliver of public needs. These could be new niche services that take advantage of the technological innovations. This for example could be a direct-to-home movie channel, a dedicated educational channel, a dedicated sports channel etc.

This would have the benefit of causing least disturbance to industry arrangements at a time of increasing market competition, and least gratuitous damage to the SABC's revenue base.

Model G

Model G would introduce a joint-venture arrangement between SABC and the private TV sector of broadcasting. In this model various percentages could be bought by investors in the present SABC operations. In turn SABC could invite partners to launch new services. Proceeds from this model could subsidise Public Broadcasting Initiatives.

Irrespective of the model that might be chosen ultimately by the government and Parliament, it is clear that further major work would be necessary to implement any of them.

It may be that other models might be identified during the consultation phase on the Green Paper. The Technical Task Team seeks comment on each of the models and on alternatives to them. Any such comment should be detailed and comprehensive.

As well as seeking comment on the models identified, this Green Paper also poses a number of specific questions about the future of public broadcasting in South Africa, including the future of the SABC, and about related definitional issues -

4.1 Is the SABC as presently structured able to cater to the broadcasting needs of all South Africans?

4.2 If not, what measures might be taken to ensure that the broadcasting needs of all South Africans can be met or maximised?

4.2.1 Should the SABC be unbundled or internally re-organised along the lines of any of the models outlined in the Green Paper?

4.2.2 Are there any alternative models for unbundling or reorganising the SABC?

4.2.3 If the SABC is to be kept substantially intact, what can be done to ensure that it, maximises its delivery on public broadcasting needs?

4.3 What can Parliament do to provide greater clarity and certainty about the nature of public broadcasting?

4.3.1 What can the government and the Parliament do about the present structural imbalances in South African broadcasting?

4.3.2 Depending upon what the government and Parliament determine about the broadcasting structure, what can they do to clarify the IBA Act and to provide greater legislative certainty about the obligations of any public broadcaster?

4.4 What should be the terms of any South African Public Mandate?

4.4.1 What do you believe should be the primary considerations for the Public Mandate?

4.4.2 Should the public mandate be shared by all broadcasting sectors?

4.4.3 What obligations should be assigned to the different sectors of broadcasting?

4.4.4 Should the public broadcaster consider joint ventures and investments with partners?

4.4.5 How can the editorial independence of the public broadcaster be safeguarded?

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Private Broadcasting:

The second category of broadcasting services in South Africa is the private broadcaster. Private broadcasters operate purely for commercial gain with the intent of making a profit out of their operations. These broadcasters largely draw their income from advertising, sponsorship, subscription or a combination of the above.

In many countries, private operators are required by law to work towards realising defined policy principles and objectives laid down for them by Parliament. These specific rules and regulations take into consideration the need to balance public objectives and the profit motivation of private broadcasters. But private operators are commonly seen as having a responsible role to play in contributing to public policy objectives.

Broadcasting markets are liberalising at a global level. Programme production is increasingly falling within the domain of private broadcasting. Most of the new channels and stations are also part of private broadcasting. Account should be taken to formulate an appropriate role and mandate of this expanding sector of broadcasting. In a matter of years this sector could be the dominant sector of the broadcasting system?

The IBA Act defines a "private broadcasting service" as a service operated for profit and controlled by a person who is not a public broadcasting licensee.

This definition and others, for instance those of "public broadcasters and community broadcasters", have to be re-drafted to make them more concise. As currently formulated they raise more questions than they provide answers.

Categorising different sectors of any broadcasting industry only has value if distinctions are to be meaningful in some way. But distinctions are made in order to apply different levels of responsibility, obligation and accountability.

There is obviously considerable merit in distinguishing private and public broadcasting.

Private broadcasting can expect to be treated differently by Parliament and by regulators because they represent investments by private citizens in the broadcasting system. For example, free-to-air broadcasters might be obliged to broadcast specified levels of local content and observe certain programme standards, and they might be protected from the loss of opportunities to the pay television sector to be first bidder on major sporting rights.

There is no justification for lumping together all privately owned services. These services are different in nature and in terms of the markets in which they operate.

Pay television operators might not be expected to carry high levels of local content, might be subject to lesser programme standards, but might be placed in a secondary position to the free-to-air television sector on bidding for rights for major sporting events.

One important obligation that private, free-to-air broadcasters might be required to observe in the South African context relates to obligations to minority groups and the disadvantaged.

Private, pay television operators might also be expected to make similar efforts, though possibly of a more circumscribed kind. Different efforts might even be expected of satellite, cable and microwave operators within the pay television sector.

There seems to be no reason why private operators should not be obliged to reach defined and realistic population coverage goals.

The prospect that different obligations might be imposed on different types of private operators indicate that Parliament will need to meaningfully differentiate between those types of operators, and define, as well, in general terms, the differences in nature of those obligations.

4.5 Is the present statutory definition of private broadcasting sufficient for the purposes of the proper administration of the IBA Act?

4.6 Should private broadcasters have public broadcasting responsibilities? Why and in which areas? How should this be funded?

4.7 Should the public broadcaster be protected where the private broadcaster has public service responsibilities?

4.8 What obligations should the private broadcasting sector meet in order to contribute to the task of nation building, national reconciliation, official language broadcasting, and the like, and to the general needs of the South African community?

4.8.1 What population coverage obligations should private broadcasters be obliged to meet? Should population coverage obligations be imposed on private broadcasters?

4.8.2 Why shouldn't private television operators be obliged to reach full national population coverage?

4.9 What level of regulation is necessary and appropriate to the private broadcasting sector?

4.9.1 Should Parliament consider the imposition of statutory licence conditions on private broadcasters?

4.9.2 If so, what should be the nature of such conditions?

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Community Broadcasting:

The community broadcasting sector is one which operates to serve broadcasting needs at a community level. The objectives of community broadcasting are to achieve the following:

• Promote the right to communicate and freedom of expression;
• Actively involve the community as producers, managers as well as audience, in the practice of communication;
• Be the voice of communities;
• Services are independent and not for profit associations;
• Are broadcasting services licensed to serve particular communities;
• Services are owned, controlled and managed by the community; and
• Provide programming that reflects the special interests and needs of the community which they serve.

The community radio sector was undoubtedly thought to be crucial, not least by the IBA Act, to achieve national inclusiveness.

In many ways radio offers more cost-effective options to community groups than television. The high costs of television productions are a significant barrier to disadvantaged and minority groups. But radio offers the prospect of low barriers to entry, cheaper transmission overheads and much simpler programme production.

So community radio appeared to offer South Africans significant prospects for inclusion.

The focus of a community licensee should ideally be on the specific community it serves. In this it augments the services of the broadcasting system by attending to needs that cannot be adequately addressed at national and regional level by public and private operators.

The IBA Act provides for two types of communities for the purpose of licensing community services:

• Firstly, a geographic community, which refers to a community living within a defined geographical area; and
• Secondly, a community of interest which refers to a sector of the public within a given community which happens to share a common interest, be it religion, ethnic cultural, education, music, and so on.

The above definition is similar to the Canadian and Australian models. In Britain, the system is organised differently. The BBC runs thirty nine local stations, operated as commercial or private services.

The IBA has to date issued over 100 community radio licenses, varying from rural, urban, language, religious, black and white entities. The distribution of community radio stations within the country's nine provinces is, however, unequal and reflective of the uneven historical development of the country. It should be noted that the least developed provinces have fewer community radio stations, whereas in contrast, the more developed provinces have the most community radio stations in addition to other private broadcast services. Access to this tier of broadcasting is therefore in line with the information poor-rich divide of the South African population. Unless due attention is focused on developing this sector, it can grow to reinforce patterns of inequality in the South African society.

Radio stations are part of the communications services of the country. The increase of communications services in areas that are relatively resourced like urban areas to the neglect of needy areas must be addressed if all South African citizens will have equal opportunities and access.

Many of the successful license applicants broadcast only in English, and many are religious groups.

The statutory definition of the community sector of broadcasting and the IBA's licensing practices have raised a number of issues about the role of this sector of broadcasting and its policy objectives.

All community broadcasters are non-profit entities as prescribed by the IBA Act. However, this does not mean that they cannot make profit, but they cannot distribute the profit among individuals. These profits are required to be ploughed back into community projects.

The IBA Act charges the IBA with the task of promoting the development of the sector. To many South African communities, the prospect of owning community broadcasting services is only a distant possibility unless planning and co-ordination are undertaken at national level. The development of the community sector throughout the country will require resources and there is no clarity as to where they must come from.

The IBA is a Statutory Body responsible for licensing and regulating broadcasters. The task of development imposed on the IBA poses a number of policy and regulatory issues. As a Regulator, should the IBA be charged with developing a sector it licenses?

It is not clear whether the IBA has been given sufficient Parliamentary direction to develop this sector of broadcasting throughout the country. The process as it unfolds, indicates one trend - services are acquired by those communities that have relative access to resources as opposed to those who do not have any access to resources.

Whatever the reason, it seems clear the development of this sector of broadcasting needs to be addressed also from the point of view of resources and co-ordination. The question of who must develop the community broadcasting sector to reach all areas of the country warrants a serious discussion.

Categorising the community sector can only have value if distinctions are to be meaningful in any way. As noted earlier, the IBA defines community as a geographic community and also as a community of interest. In addition a large number of community stations are religious and youth focussed. Even in situations in which there are two community stations existing side by side, there is no guarantee that the entire spectrum of a community is addressed. This raises the question of the reasonable role of the community sector in meeting the full spectrum needs of communities.

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The operational-side of the community sector of broadcasting also raises several issues. The community sector is designed to rely on advertising revenue, grants, donations, sponsorships, membership fees and must operate on a non-profit basis.

The ability of new community services and rural based community stations to attract enough resources to survive in a situation in which community stations compete for the limited donations, grants and sponsorships look doubtful. The entry of more community stations without the corresponding expansion of their revenue base makes such a future uncertain.

A system of volunteers to drive the establishment of a community sector of broadcasting nationally may be a possibility but has no precedence. The socio-political conditions of South Africa mean a large section of communities have no jobs and no resources to underpin their voluntary participation in the community broadcasting sector.

Community access to some groups is very hard to achieve, and it is not clear that these groups are operating as they should.

Subject to the availability of spectrum, the community sector obviously offers considerable prospects for community empowerment and nation building. Different communities have differing community expectations and needs, therefore the need to craft a clear policy guideline on community services is imperative to meet all the community needs.

Issues raised above have led to a number of people asking if the community broadcasting sector is indeed an ideal way of meeting broadcasting needs of South Africans a