Broadcasting Policy Green Paper

Foreword
Role of Broadcasting in the Future South Africa
Broadcasting, the National, Economy and Economic Issues
Market Structure
Public, Private and Community Broadcasting in South Africa
Broadcasting and the Promotion of South African Culture
Signal Distribution
Convergence and New Media
Universal Service and Infrastructure
Human Resources Development
Regional and Global Strategy
Financing the Broadcasting System
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.

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 21st 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

BY POST:

Department of Communications
Broadcasting Policy Division
Private Bag X 860
Pretoria
0001

HAND DELIVERED:

Department of Communications
Broadcasting Policy Division
iParioli Office Park
Room 336 Nkululeko House
399 Duncan Street
Hatfield
Pretoria

BY E-MAIL:

marius@doc.org.za

BY FAX:

(012) 427 8059

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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:

  • 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.

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.

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.

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.

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.

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?

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.

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?

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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.

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.

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:

  • obtaining exclusive rights to programme materials and warehousing programming
  • the new entrant can afford lowering of advertising rates to below levels that
  • the lowering of subscriptions to make pay services compete with the new free-to-air.
  • airing of programming in the same target programming categories of the new competitor;
  • 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:

  • Policy and political considerations at the time of licensing including the protection of the Public Broadcaster
  • Economies of scale to launch and sustain pay-TV
  • Development of the subscriber base
  • Penetration and acceptance of the new technologies
  • Economics and affordability of the pay-TV
  • Absence of pro-active government policy toward the licensing of new entrants in pay-TV services
  • 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.

    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?

    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.

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    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.

    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:

    • 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.

    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.

    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?

    Private Broadcastings

    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?

    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.

    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 at a grassroots and local level. Taking into account the needs of the country and the demographic make up of the South African society, is it possible to configure a different model to meet the needs of people at a local level?

    It might be thought that the community broadcasting sector needs to be reviewed timeously.

    There has been rapid expansion in the sector, and Parliament might wish to consider giving the Minister the power to direct the IBA to suspend further license allocations for a defined period to allow for a re-evaluation of this category of licenses some time in the future.

    The concept of another category of commercial broadcaster might also be worth exploring. In some countries narrowcast licenses which offer services that are limited in some way, e.g., racing and betting services, language services, tourist services, can be operated for profit. They are subject to only low levels of regulation.

    But it must be asked whether South Africa should now review its spectrum plans and its long-term objectives for the use of spectrum, so as to ensure that all of its social objectives can be accommodated within the spectrum limits that obviously apply.

    4.10 What should be the objectives of the community broadcasting sector?

    4.11 To what extent should the community broadcasting sector be obliged to fulfil these objectives?

    4.12 To what extent should the community broadcasting sector be supported and/or assisted to fulfil these objectives? By whom and how?

    4.13 Should there be different categories of community broadcasters, e.g. a national community of interest?

    4.14 Is the community broadcasting sector presently addressing the needs of South Africans at local level?

    4.14.1 If so, how can more community broadcasting licenses be allocated throughout the country?

    4.14.2 If not, what can be done, and by whom, to achieve this goal?

    4.15 Is it time to review the performance of the community broadcasting sector, and, if so, should the Minister be authorised by Parliament to direct the IBA to provide him with a report and recommendations for improvement?

    4.16 To what extent should religion be accommodated by community broadcasters?

    4.17 What specifically can be done by local councils, educational entities, the government and others to better equip community groups with assets, funds, premises and the like for the purposes of community broadcasting?

    4.18 Is the present statutory definition of community broadcasting adequate for the proper administration of the IBA Act? How should community broadcasters be defined?

    4.19 How can regulation address community broadcasters' needs and interests?

    4.20 To what extent should access be enshrined in community broadcasters? Is the definition clear enough about the principles of participation and accessibility? If not, how can this be made clearer?

    4.21 Should community broadcasters be locally-based, and to what extent should they network?

    4.21.1 For example, can or should a community of interest broadcaster have a countrywide geographical coverage, and can a religious group apply for a broadcasting license whose coverage is countrywide? If not, how might Parliament improve its definition?

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

    4.23 How adequate is spectrum planning for the future of community broadcasting?

    4.24 How adequate is spectrum planning for the future of other forms of broadcasting?

    4.25 What level of regulation is necessary and appropriate to community broadcasting?

    4.25.1 Should Parliament consider the imposition of statutory license conditions on community broadcasters?

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

    4.25.3 How would this level of regulation differ from levels of regulation imposed upon other sectors of broadcasting?

    4.26 Is there scope for the introduction of other categories of service, e.g., narrowcasting services specialising in official language programming, providing low barriers of entry to broadcasting, and with low levels of regulation?

    4.27 What, if anything, is the role of the State in providing broadcasting skills training to those in need thereof for the purposes of becoming a community broadcaster?

    4.28 Should there be partnerships between community broadcasters and other sectors of broadcasting (public/private)? What should be the nature of these partnerships? And, How should it be enforced?

    A number of community broadcasting licensees have proved to be financially viable by operating in a very commercial fashion. In some cases the need to attract advertising revenues has led inevitably to a decrease in community programming. In some cases there has been insufficient accountability in terms of changes to programming objectives and how surplus is made and spent. The IBA license regulation requires that such surplus should be ploughed back into community projects.

    4.30 How can community broadcasters be more accountable to the community that they serve?

    4.31 What can be done and by whom to develop skills in the community broadcasting sector as well as organisational capacity?

    Relationship between the three tiers of broadcasting

    Due to the past structure of broadcasting in South Africa, there has been minimal if any interaction between the different tiers of broadcasting. What has become clear is that the community media sector has been a fruitful training ground for journalists and broadcasters who have been taken into the public and commercial sectors. A similar process occurred with the movement of substantial resources out of the public broadcaster into M-Net from the mid-eighties and recently into the newly licensed commercial broadcasters. However, there is a lot of potential for the three tiers to play complementary roles to one another rather than competitive only. As an example, community broadcasters have the ability to produce programming in local languages whilst the public broadcaster needs such programming.

    4.32 In what ways, if any, can the different tiers of broadcasting relate to one another?

    4.33 To what extent can these relationships be complementary?

    4.34 In what ways can they be competitive?

    4.35 Considering that the community broadcasting sector often acts as a training ground for the public and commercial tiers, what relationship can be explored in this context?

    [ Top ]

    Chapter 5. Broadcasting and the Promotion of South African culture

    Global Perspective

    In many parts of the world broadcasting policy takes account of the fact that broadcasting has a great capacity to influence community attitudes and to promote national identity.

    Accordingly different arrays of policies have been set in place to take account of the power of broadcasting and the role it can play in promoting national culture.

    In most developed countries, policy has helped bring about social outcomes thought to be appropriate by their communities, or by their governments.

    Governments have sought to promote local film and television industries through schemes of subsidisation, the imposition of obligations on public broadcasters, local content quotas, and tax concessions and rebates.

    Governments have been prepared to give incentives to broadcasters so that they would be encouraged to roll out transmission infrastructure in areas not served by broadcasting services for economic reasons. They have been prepared to impose conditions on licenses to ensure the provision of certain types of programmes.

    Policy has sought to encourage the local financial and investment sectors in film and television production through a variety of mechanisms like taxation incentives etc.

    Broadcasters have been given relief from competition in markets by restrictions placed on the numbers of licensed services permitted in particular markets.

    Sometimes this kind of relief has been for relatively short periods of time, and sometimes this has been a privilege that has extended for many years.

    The music industry has at times been required to contribute to the creation of local music content.

    Local content, particularly in small or immature markets, is always expensive, and always more expensive than programming sourced from the major, overseas markets.

    Many countries in the world subsidise local film and television production as a means of allowing local broadcasters to buy programming that would otherwise be prohibitively expensive.

    Catering for International markets

    Some of these systems of subsidy are very extensive, and they reflect a determination by national governments to ensure that local film and television production can cater to both domestic and international markets.

    These systems of subsidy are not structured so as to recoup the investments that are made.

    In virtually all cases, the subsidisation far outweighs the return on the investment, even in circumstances where international success and sales to overseas markets are achieved.

    But obviously the price is thought to be worth paying by these governments. The value they place on maintaining a sense of national identity in the face of the forces of globalisation is very great.

    It is worth recalling that the debates in the Uruguay Round of GATT (the General Agreement on Tariffs and Trade) came to centre upon the trade in film and television services. The Europeans, and others including Australia, resisted American pressure to include those services in the GATT Round because, although they were products that were extensively traded, it was their cultural value that was most highly valued by many countries.

    Accordingly, the European Community has maintained its policy on local content quotas, and so have many other countries.

    In South Africa the pursuit of human rights and fundamental freedoms needs to focus on the building of an inclusive, united country, with a national identity that has multi-cultural approach.

    The South African Experience

    South Africa's recent history has placed it in an invidious position.

    As noted earlier, South Africa is a developing country, which provides some world-class information, entertainment and communication services via a highly developed infrastructure in broadcasting, telecommunications and information technology. On the other hand, South Africa is a country that experiences desperate needs for communications services and content that reflects its identity.

    The broadcasting infrastructure of the country has never catered for the majority of South Africans adequately, and broadcasting policy has never until recently displayed any significant interest in South Africa's cultural mix and cultural heritage.

    The new, democratic government of South Africa has recently announced plans to establish a fund to be used to contribute towards film production in South Africa. No doubt this will be a very important factor in the future of film and television production in this country.

    In addition to the financing of film production through a film fund, broadcaster finance is another crucial financing mechanism in the building of a national film industry.

    Broadcaster financial participation in such countries as France, Germany, Italy, Australia and Canada has ensured the delivery of film to mass audiences through television.

    But clearly other initiatives must also be considered. Film and television production is expensive and risky. Not all programmes are popular and successful, and significant amounts of money provide no guarantee of success.

    Local Content Quotas

    The IBA is required to prescribe, by way of regulation, specific broadcasting licence conditions regarding local television content and South African music.

    These regulations do not require Parliamentary sanction.

    After conducting an inquiry into the local content issue in 1995, the IBA set out its proposals for the South African broadcasting sector.

    Local content in the South African context has already been interpreted by the IBA to include television programmes which, inter alia -

    • are identifiably South African
    • recognise the diversity of all cultural backgrounds in South African society
    • are developed for South African audiences
    • are produced under South African creative control

    The purpose of local television content regulations is seen by the IBA to be, inter alia, to -

    • encourage, stimulate and promote the South African television production industry
    • encourage foreign investment in South African television and film production whilst maintaining overall South African creative control, and
    • promote South African creative skills internationally

    Insofar as music is concerned, the IBA has also set quotas for South African music on radio services, basing its decisions on considerations that include the need to -

    • promote national identity, culture and character
    • address needs and extend choice
    • create economic opportunity and build local industry
    • redress historical imbalances in South African radio and music

    Quotas were also proposed for the SABC, and for private terrestrial free-to-air television operators relating to levels and category of programming affected by local quotas. In addition the IBA set quotas on types, levels and categories of local content programmes that should be out-sourced and produced by the independent production sector.

    Compliance with quotas of this kind is essential for building stability in regulation.

    The IBA's original proposals for quotas have encountered considerable resistance on the part of the broadcasters who question costs and quality standards of South African productions. Broadcasters point out that it costs up to ten times more to buy a locally produced programme compared to acquiring off the shelf international programmes. Foreign programme makers have at their disposal the best resources to draw on in making programmes, which go on to sell internationally. The quality of such productions defines international standards, which South African producers with an industry of limited development cannot easily match. The financial base of international studios allows them to be innovative and produce at higher levels.

    The IBA also served to impose obligations that the local production industry, particularly in television, describe as too little. They complain that the local broadcasting industry is dominated by foreign productions, denying South Africans a significant economic opportunity as well as an opportunity to develop a South African production base.

    The music industry has relatively high local production capacity, and South African music is very popular, but the operators of commercial radio stations continue to maintain that their mass audiences prefer high levels of foreign, or international, music. They are also critical of South African music production quality, maintaining that it is not of a sufficiently high standard to compete with international music.

    There is no disagreement on the need for local content in the broadcasting system. Points at issue relate to the amount of local content, strategies to develop local content and the production sector, responsibilities for developing local content, financial impact and quality compared to international benchmarks.

    Overall, serious consideration should take place to resolve the problems identified above. The development of local content requires concrete strategies to overcome practical problems associated with costs, quality and international competition.

    Although local production capacity has grown over the past three years, there is still a long way to go before local producers can have the resources at their disposal to compete with the best in the world.

    However, if the South African broadcasting system offers an opportunity for growth and exposure for the local producers, standards will improve to offer better quality.

    Multi-channel environment

    The number of outlets for South African content in the broadcasting system will have a bearing on the local production sector. A properly regulated multi-channel environment, promoting the South African content will increase the demand for local content and offer more economic opportunities to the producers.

    There seems to be more scope for delivering local content to South Africans in the fields of music and radio than in television because of the number of radio services, and the penetration of radio in South African homes. This compares negatively to the structure of the TV industry as presently constituted and the penetration of TV in South African homes.

    South Africa's production capacity, financial resources and human resources will lag behind the new transmission capacity. This makes it possible that South African channels will end up as conduits for foreign content.

    National Policy must help prepare the country for this multi-channel environment so that all sectors of the broadcasting industry should bear their fair share of responsibility for promoting South African culture and the national identity.

    Quotas without a corresponding production policy will not be adequate to achieve the goals of reflecting South African culture in a multi-channel environment.

    Local content production, multi-media and convergence

    Technological innovations and convergence of broadcasting, telecommunications and IT raises some policy issues that need debate and discussion. Previously, broadcasting was treated as a separate activity but convergence is fast eroding the space in which to consider broadcasting as a stand alone industry.

    The digitisation of the means of production means that voice, data and images may be combined, accessed, transformed and distributed over many platforms. At this level technology offers a possibility to distribute South African products through a combination of many platforms.

    On the other hand this digitisation raises more vexing problems about the production and dissemination of South African content in this converging world. In so much as technology offers opportunities, it presents challenges in the form of foreign cultural products increasing their share of dominance of the South African market. CD- ROMS are an example of multimedia applications, which deserve attention.

    Content driven new media, created from an integration of any two traditional media, will mean an added advantage to those with content data bases and libraries. The present lack of capacity of the country to produce adequate levels of local content will translate into further disadvantage in the era of convergence and new media.

    Regulation covering local content will be severely tested by the emergence of new distribution platforms. New distribution techniques make content quota requirements difficult to monitor and implement.

    At the present time, the SABC and M-NET are still in control of the largest production capacity in the industry.

    There are also a number of independent production companies, and a growing pool of talent in the industry.

    The major barriers to local production are cost, skills and the limited availability of infrastructure, including trained personnel, and other necessary facilities like production studios and training centres.

    The fact that production facilities are not easily accessible by small independent producers is a structural issue, which appears to need attention.

    Co-productions

    Co-productions in South Africa appear to be an under-utilised means of stimulating the making of local programmes.

    International film companies have made many films in South Africa over the years, using local actors and actresses as "extras" and employing other players in the industry on their sets.

    Some local actors and actresses have had the opportunity to play leading roles in these productions.

    A few of these films have been based on books and stories written by South African writers. The majority of the films are made for the international market, and South Africa tends to be seen more as an exotic location for film-making.

    Economic empowerment

    An inclusive reflection of South African culture

    The policies of the past have undoubtedly worked to exclude from the local independent production industry people of certain gender and colour. Policies to redress the imbalances of the past still need further attention in this sector. Diversity in ownership and control of independent production facilities and resources will help in an inclusive reflection of the South African culture.

    Even in highly developed markets like that of the United States, preferential employment policies are invoked to oblige broadcasters to employ people from minority groups, like women and blacks. The Federal Communications Commission, the US broadcasting and telecommunications regulator, monitors and enforces these policies.

    In South Africa some efforts have been made to implement affirmative action policies meant to promote racial and gender representivity at all levels within the broadcasting industry.

    The pace of integrating people who were previously disadvantaged within the management structures of the broadcasters is however influenced by many internal and external factors. Real and substantial change has been slow to occur.

    Economic empowerment of historically disadvantaged South Africans is one of the goals espoused by the South African government through the Reconstruction and Development Programme (RDP).

    There does not appear to be any doubt that the South African broadcasting industry can effectively contribute to the economic development of the previously disadvantaged, while also creating better employment and business opportunities for the country.

    The economic empowerment of members of historically disadvantaged communities is generally defined as a process that deliberately creates entrepreneurial and managerial opportunities for previously disadvantaged groups to broaden and redistribute the South African economy through inclusion in ownership and management.

    In the broadcasting business, economic empowerment of members of historically disadvantaged communities could include, by way of example, the following -

    • members of the previously disadvantaged communities enter into investment partnerships and co-productions;
    • that they own partially or totally the means to produce broadcasting programming material including studio houses, commissioning services, signal distribution services (such as the common carrier), and
    • that they can actively participate in the running and administration of broadcasting businesses or enter into contractual agreements with broadcasters to provide some services

    The IBA Act includes among the objects of the broadcasting system the encouragement of ownership and control of broadcasting services by persons from historically disadvantaged groups, but offers no mechanisms or guidance to assist in the achievement of this objective.

    The IBA Act certainly has created an enabling environment for the encouragement of economic empowerment in the broadcasting sector.

    However, lending or loan policies of the finance industry can serve to frustrate efforts to give this environment a chance to maximise opportunities for disadvantaged people.

    The finance industry has pointed to the risk profile of new companies and groups seeking to benefit from the empowerment provisions.

    Language and Cultural Diversity

    The linguistic diversity of South Africa is a very obvious indicator of the nature and extent of South Africa's cultural diversity as outlined in Chapter 1.

    The Constitution and the principles of Nation Building list eleven official languages for the country.

    As mentioned before, the broadcasting services of South Africa have failed to cater for this language diversity, preferring to concentrate upon the upper echelons of society and the privileged audiences of the country. This is a traditional private sector approach.

    However, the equality and the equitable treatment of all South Africans and the promotion of all official languages are now a fundamental tenet of the new constitutional order.

    Social norms and standards in broadcasting

    The South African Constitution guarantees fundamental rights to all South Africans. The right to freedom of expression, including the freedom of the media and freedom of artistic creativity, is one of the fundamental rights of South Africans.

    But such rights do not exist in a vacuum. The Constitution stipulates conditions in which such Rights can be limited as the following:

    in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors:

    • the nature of the right
    • the importance of the purpose of limitation
    • the nature and extent of the limitation
    • the relation between the limitation and its purpose; and
    • less restrictive means to achieve the purpose

    The application of Right to freedom of expression and limitations to this right has received considerable debate through out the world. This relates to the nature and scope of limitations that can be justifiably imposed on broadcasters, producers and artists in the broadcasting sector.

    Most democratic countries have found it acceptable to impose more restrictions on broadcasting than other media. The justification for this is that there are Public Interests that broadcasting must protect and serve.

    In South Africa the IBA Act is clear that broadcasting must be regulated in the Public Interest.

    The first area which needs considerable discussion is which issues should be regarded as deserving a limitation on the right to freedom of expression?

    The second area is how should these areas of broadcasting be regulated?

    The third area is the nature of such limitation and their scope.

    Globalisation of broadcasting services has brought along an added focus on the discussion on limitations to the freedom of expression. Contents that would be illegal in South Africa, like child abuse/ pornography, could be transmitted and received in South Africa from sources abroad. In turn South Africa could be used as a springboard to distribute illegal content in other parts of the world. This in turn raises the need for international standardisation of regulation and co-operation.

    Social norms

    Violence, hate speech, religious intolerance, racial and gender stereotypes are some of the norms that elicit considerable debate within the world and the South African society. These are considered by many as constituting some of the areas in which limitations on the freedom of expression should be considered.

    Advertising and social norms

    Adverts aired from time to time attract social comment because of their design, production and artistic choices. In many instances the audiences have complained about social values embedded in certain adverts. In this category of social values which audiences find offensive are:

    • Gender, racial and religious stereotypes
    • Portrayal of violence
    • Sexism
    • Sexual scenes
    • Advertising to children
    • Alcohol advertising

    The Advertising Standards Authority is an industry body responsible for regulating advertising content. This is one instance of self-regulation in the South African broadcasting system.

    Many questions have been raised on the suitability and advisability of the industry regulating itself in matters that constitute public interest in broadcasting.

    Education

    The South African education system was designed in accordance with apartheid policies. Bantu education, for example, was modelled in such a manner as to deprive the majority of any meaningful role in the public life of South African society.

    Many schools and educational institutions which were meant for the deprived majority is still ill-equipped, and in many instances run by inadequately trained staff.

    In addition, a sizeable portion of the people who have been historically disadvantaged cannot read and/or write. Facilities for adult education are also few and far between.

    In this context, the role that the broadcasting system can play in augmenting the education system of the country deserves careful consideration.

    Many countries acknowledge the particular role that broadcasting services can play in imparting useful information of general community interest, and, more particularly, materials that are genuinely educational in nature and support life-long learning, even to the extent of being integrated in formal programmes run by educational institutions.

    Concepts of distance learning and open learning are quite familiar to the broadcasting community, although they have not as yet been embraced by the South African Broadcasting System and educational institutions.

    Children

    The children of South Africa will be its future.

    The need for the State and its institutions to facilitate a well-rounded early childhood for its people is internationally acknowledged.

    The socialisation of children into society is considered an important aspect in shaping the future of a people. This has to do with the assimilation of basic life skills, which range from the provision of fundamental levels of literacy and numeracy to the acquisition of knowledge about history, science and technology, health, and environmental care.

    A system offering South African Early Learning Centres to all segments of the South African population will take time to be constructed, denying the majority of children an opportunity to develop skills from childhood onwards.

    It is obviously worth exploring the role that broadcasting might play in providing more and better information and education services to the children in particular.

    In addition, many children in South Africa have been exposed to violence in various forms, be it in the family or in a community. The scars left by this exposure to violence remain indelible throughout the person's life, and this has a lasting effect on a child's attitude and disposition towards other people and to life in general.

    South African children need their broadcasting services to open their world and expose them to the realities of life in other parts of the world. This would inculcate social values and norms that will go a long way towards normalising South African society.

    Religion

    South African society is characterised by the prevalence and co-existence of various religious beliefs and practices.

    Many South Africans profess to belong to the many religious groupings to be found in society. The 1991 census figures suggest that out of a population of approximately 31 million South Africans the following categories emerge:

    • 66,5% as Christians
    • 1% as Islamic
    • 1,2% as Hindu
    • 0.2% as Jewish
    • 30.9% as observing traditional beliefs, refusing to specify their religion or as observing no religious beliefs.

    Devotional programmes have traditionally been offered through the SABC. In line with the policies of the past, only Christianity was reflected in the broadcasting system.

    The reflection of the diverse religious beliefs only started after the installation of the SABC Board following the 1994 elections.

    Considerable discussion on the reflection of South African religious beliefs in the broadcasting system needs to be considered. Much of the discussion has centred on the religious programmes offered through the SABC and neglected the other religious services which have come into being since the democratisation of the country or those that come into being on the back of technological trends.

    Religious programming is offered by the South African broadcasting system at the following levels:

    SABC

    The SABC offers religious programmes daily in all its language services in radio. In addition all three television channels offer religious programming and discussions.

    M-Net

    M-Net the private subscription Television network provides an opportunity for the Christian Television Network to broadcast religious programmes on Sunday.

    Trinity Television

    Trinity Television broadcasts Christian programmes to some parts of the Eastern Cape. Trinity Television operates the only community Television license.

    Radio Pulpit

    Radio Pulpit broadcasts religious programmes to the whole country using the Radio 2000 fm frequency network. This service is provided during the weekends.

    Community Stations

    A number of religious bodies operate community radio licenses. These services offer religious programming to different religious groupings.

    Different broadcasting systems in the world treat religious programming in different ways. In some countries like in the USA religious broadcasters apply to the Regulator for licenses to operate religious networks. These networks are the responsibility of the religious groupings and are funded accordingly.

    In some African countries, like Zambia, religious programming is provided by the State/Public Broadcaster. These religious programmes form part of the programme provision and are therefore funded from the sources of the stations.

    Sport

    Sport is regarded as having the potential to unite people. This is particularly true for South Africa. The country's re-admission to the international sports arena saw people from many different walks of life coming together to celebrate sporting victories in unison, especially when South Africa won the Rugby World Cup and the African Nations Cup a few years ago.

    Many South Africans experienced both these events live, through either television or radio. The role of broadcasting services was indispensable for thousands of people who could not attend these sporting events. Yet they were able to share in the triumph and celebration from the comfort of their homes, at work or in transit.

    The globalisation of television sporting events in recent years, as well as the development of particular sporting codes, has raised the problem of the acquisition of exclusive broadcasting rights.

    The rationale behind this is to have an exclusive audience, thereby maximising revenues that accrue from subscriptions, in the case of pay television operators, and from advertising, in the case of free-to-air broadcasters.

    But normally pay television operators and sport in general only reach a relatively small proportion of the households in a market. Therefore, they are usually unable to reach the proportion of households that free-to-air broadcasters can. But pay TV operators can still make considerable profits from relatively small audiences, and can be quite competitive with free-to-air broadcasters when bidding for rights.

    When Pay TV operators obtain exclusive rights to major sporting events, this stimulates their businesses, attracting more subscribers. But there are many people who cannot afford pay TV subscriptions and are excluded from unifying sporting events and are deprived of the opportunity to experience those major sporting events directly.

    A number of countries in the world have developed policies to ensure that free-to-air broadcasters are given entitlements to acquire such rights before pay TV operators.

    Lists of major events are developed, and most of these events are sporting events, and the Minister is given the task of deciding which events should be included on those lists.

    If a free-to-air broadcaster decides not to acquire the rights to any such event, Pay TV operators are then entitled to acquire them. Operators acquiring rights are often placed under an obligation to programme those events, and are not allowed to "warehouse" them.

    5.1. What policies could be developed, that are meaningful but reasonable, for the promotion of broadcasting, Internet and multimedia local content on South Africa's broadcasting services?

    5.1.1 What conditions might be imposed on broadcasters in such policies?

    5.1.2 What incentives might be offered to broadcasters in such policies?

    5.2. What additional policies might be developed to stimulate the South African film and television industry, and the music industry in the production of programmes that promote South Africa's cultural identity?

    5.2.1. What should be the role of government in subsidising SA film and television production, and music production?

    5.2.2. What should be the role of private and other broadcasters, including the SABC, in promoting SA's cultural identity?

    5.3. What should be the role of any SA public broadcaster in promoting SA's cultural identity?

    5.4 Is there a role for broadcasting services to reflect cultural diversity?

    5.4.1 If so, what should the role of broadcasting services be in reflecting cultural diversity, and how, in practical terms, could this goal be achieved?

    5.5 Is there a role that broadcasting services can play in the development of various official languages of the country?

    5.5.1 If so, what should be the role of broadcasting services in the development of various official languages?

    5.5.2 Should specific language obligations be imposed on some, or all, broadcasting services?

    5.6 What is the role that broadcasting services can play in helping to address the educational needs of the country?

    5.6.1 In practical terms, what can each sector of broadcasting do in the realisation of this goal ?

    5.6.2. How should the provision of education in broadcasting be structured and organised? Who should be responsible for producing the content? Who should be responsible for funding the provision of education?

    5.6.3 Who should be responsible for creating the necessary infrastructure and support services for broadcasting education utilisation?

    5.6.4 Should educational programmes carry advertisements?

    5.6.5 Is there a need for a dedicated educational channel to support human resource development in South Africa?

    5.7 What role can broadcasting services play in the education of children, particularly their early education?

    5.7.1 In practical terms, what can each sector of broadcasting do to make provision for children's programmes and programmes for young people? In what way could children be protected from harmful advertisements and practices?

    5.7.2 In practical terms, what can be done by way of information and general entertainment programmes?

    5.7.3 In practical terms, what can be done by way of formal educational programmes?

    5.8 How should religious beliefs and practices be reflected in the broadcasting system?

    5.8.1 Which sector of the broadcasting system should be expected to reflect religious beliefs and practices?

    5.8.2 How can religious diversity be reflected in the broadcasting system?

    5.8.3 Should religious broadcasting be considered as a separate and specific sector or class of license within the broadcasting system?

    5.8.4 Who should finance religious broadcasting and Why?

    5.8.5 Who should have editorial control over religious broadcasting?

    5.9. Should broadcasting policy address gender imbalances in content and employment practices in the broadcasting system?

    5.9.1 In practical terms how should the broadcasting system address gender issues?

    5.10 Should the broadcast of exclusive sporting rights be regulated so as to ensure that as many South Africans as possible can participate in major sporting events?

    5.10.1 If so, what particular policies should the government and Parliament adopt in this respect?

    5.10.2 Which particular sporting events should be the subject of this type of regulation?

    5.10.3 Who should regulate on sporting event rights?

    5.10.4 Should the economic interests of sport bodies be protected in a situation where the issue of exclusive rights to certain sport codes is reversed? If so, How?

    5.11 What practical steps can be taken to improve and make more accessible South African broadcast production facilities?

    5.12 What encouragement can advertisers be given to support large, but disadvantaged audiences?

    5.13 What policies can usefully be adopted to further encourage higher and more senior levels of employment of disadvantaged peoples by broadcast operators?

    5.14 What can be done to encourage a higher level of co-productions?

    5.15 In particular, what can the government do to encourage official co-productions?

    5.15.1 What local content incentives, or any other incentives, can play a part in government encouragement of official co-productions?

    5.16 What guidance can be offered the IBA to help It achieve a higher level of ownership and control of broadcasting services by persons from historically disadvantaged groups?

    5.17 What can be done to assist such groups obtain access to finance?

    [ Top ]

    Chapter 6. Signal Distribution

    Signal distribution today

    The SABC was the sole national television broadcaster in South Africa for many decades, and has played a major role in the signal distribution infrastructure. Aside from Telkom whose transmission facilities are used to carry the signal from source to transmission towers, Telkom's transmission facilities are only used on a supplementary basis for short distance links in metropolitan areas or for back-up purposes.

    The other major signal distributor company to emerge is the privately-owned, Orbicom.

    Sentech

    The SABC was a vertically integrated operation that fulfilled the role of both content provider and distributor. Consequently, it owned and controlled the infrastructure for signal distribution through its division called Sentech. In 1995, the SABC restructured the ownership of its assets and severed its ties with Sentech.

    Sentech is licensed as a common carrier. Sentech has extensive broadcasting terrestrial transmission facilities (689 transmitters for FM radio, 10 for MW and 15 for SW.

    The company has established extensive radio coverage to serve the major linguistic groups with English and Afrikaans reaching all populated areas. The television infrastructure has achieved a lesser coverage of the country.

    Of the 463 TV transmitters:SABC 1
    SABC 2
    SABC 3
    M-Net
    CSN
    Bop-TV
    TBN
    125
    158
    74
    72
    26
    2
    6

    The other licensed signal distribution operator in South Africa is Orbicon, the planning and building arm of Multi-Choice Africa (owned by MIH Holdings Ltd.).

    Orbicom manages a system of fibre, microwave, and satellite links, and operates the digital bouquet of DTH satellite broadcasts in Africa, including South Africa. The satellite transmission capability has encouraged the building of numerous terrestrial re-broadcast networks in several countries in Africa.

    In South Africa, the company has constructed a terrestrial transmitter network, whose station users broadcast the M-Net channels, community services, Canale Portuguese, and business broadcasts.

    A major part of Orbicom's transmitter base includes the 124 low power "self-help" stations.

    Gap in signal distribution for free over-the-air services

    While the broadcast network reaches large segments of the South African population, there are still major gaps in the provision of basic, free television service to South Africa. Television penetration is about 60%, which means that about 40% of the population cannot afford television or cannot receive the signal.

    There are other technologies available to reach the entire South African population. For example, the three television services and radio services of the SABC have been broadcast via satellite on a DTH basis in analogue format since September 1995.

    Nevertheless, there would still be a cost barrier compared to the terrestrial over-the-air delivery. Extending the terrestrial services could be done in part via satellite (i.e. satellite to local rebroadcast transmitter), but the DTH approach is a possible option.

    6.1 What should the priority for signal distribution be? Why? Who should determine this priority?

    6.2 How can a balance be achieved between the signal distribution needs of the extended and new services with the needs of existing broadcasters both public and private?

    6.3 Should this priority include the transmission of community channels?

    6.4 Can a low cost DTH distribution approach be an acceptable solution to the distribution of basic television services in South Africa?

    6.5 Should signal distribution be regulated? What considerations should inform such regulation?

    Should free, over the air services become the priority, there is a related issue about the use of the over-the-air TV spectrum. At present, part of the VHF/UHF use of spectrum is for subscription-based, encrypted M-Net service. There are about 1.2 million subscribers to the M-Net Pay-TV service, but the lack of purchasing power among large segments of the population puts M-Net out of the reach of millions of TV viewers.

    Although there are terrestrial frequencies still available there is no national policy on the usage of the frequencies. If this segment of the TV market is to be made more competitive, a policy decision must be made on frequencies to be allocated for this purpose.

    The TV license bidding process underway will culminate in the award of a new national TV commercial license. The stipulation is for 50% coverage at the outset, and eventually 75% coverage, so there is advance consideration for universal coverage. Other South African TV services will likely be added over the years. Since the television spectrum is finite, there is an argument to conserve it for free television.

    6.6 Should there be an explicit priority for the use of the VHF/UHF spectrum to extend the coverage of free, over the air signals?

    6.7 Should the current over-the-air subscription-based services be migrated within a specific time period to the bouquets offered by DTH and other multi-channel delivery platforms?

    6.8 How would investments in receiver equipment by the subscribers and their right to access be protected if the pay services were to migrate to the DTH platform?

    6.8.1 How can the investments and viability of the Pay TV operator be protected?

    6.8.2 Who should carry the cost of this migration?

    Placing a priority on extension of coverage, and on the use of off-air for free TV services also responds to the need for meeting universal objectives. In this way, general interest and public broadcasting services can be made available to the largest possible number of South Africans. Additional discretionary TV services can then be offered to consumers through subscription purchase.

    Incentives for accelerating signal distribution coverage

    In the current situation, broadcasters (including SABC) can contract Orbicom or Sentech to distribute their signal, or can build their own system.

    As a public company, there is no particular incentive for Sentech to extend signal distribution, unless the broadcaster is willing to pay for the entire cost.

    Rather, Sentech makes capital investment upfront, and only recovers its investment and return over a 15-year period.

    As a private company, there is no incentive for Orbicom to extend coverage to uneconomic regions. Similarly, unless advertisers want to reach such audiences, there is no incentive for private broadcasters to build transmission capacity any further than economically justified.

    In broadcasting, the broadcaster is licensed to broadcast certain services at certain powers with a defined footprint. The signal distributor is licensed separately to allow for conducting the activities of signal distribution. Universal service relates to both facets of providing services at certain transmission powers with a defined footprint, and the capacity for the transmission of the signal. Policy must resolve the question of who should take responsibility and for which area in the extension of universal service.

    6.9 Can the signal distribution system be structured to accelerate the coverage of existing and new TV over-the-air services?

    6.10 Should government consider new approaches involving the structure and regulation of signal distribution? How and for what reason?

    6.11 Who should have the primary responsibility to extend the signal distribution system to cover the whole country?

    One option is to put the onus on the broadcaster. First, the SABC has the public mandate for extending coverage, but would need to carve out the funds to do so. Second, by conditions of license, new private broadcasters could be obliged to extend coverage, as is contemplated by the selection criteria for the licensing of the new national service. The price would be fewer funds available for other public interest broadcasting activities, for example South African programme content.

    These approaches only deal with half of the problem, since the terrestrial signal distributors would be called on to implement distribution. The need is for signal distributors who will be able to make the capital investments necessary to extend coverage efficiently, and take advantage of a growing broadcaster customer base to keep the distribution costs down for individual broadcasters.

    Model A

    One way to do this is to assign the task to Sentech, and permit it to raise the capital investments necessary to extend service for leasing back to existing and new broadcasters.

    Sentech could enter into Strategic Equity Partnerships and it could be extended other privileges contingent on some commitment on its part to meet extended coverage targets. Some of the privileges include:

    • monopoly over a 5 year term;
    • permission to enter certain telecom services;
    • allowance for a relatively high foreign ownership threshold;

    If granted some form of privileges, the lease rates it would be charging would need to be subject to regulatory control or oversight, in order to prevent potential pricing abuse.

    Model B

    Another option could be to call for signal distribution applications, and give out one or more licenses. In this scenario, the future of Sentech and its assets would have to be resolved (assuming that Sentech did not win such a license).

    Model C

    One option would be to liberalise signal distribution and allow for the entry of new players. This will necessitate the re-regulation of the signal distribution sector to offer fair and competitive conditions to the new entrants. The new players could be introduced with specific mandates to rollout the infrastructure to all parts of the country.

    Model D

    Another option is to allow Telkom to enter the broadcasting signal distribution field. Telkom already has the capacity and expertise in the area of signal distribution. (See Sentech Input). All signal distributors rely on Telkom in some parts of their activities. In return for rolling out the infrastructure to all parts of the country, Telkom would be given an exclusive license to carry or develop some of the new applications.

    6.12 Should the government consider new approaches involving the structure and regulation of signal distribution to ensure the extension of terrestrial services to the entire South African population?

    6.13 Is Telkom able to efficiently enter the field of Broadcast Signal Distribution without detracting from its core obligation to provide universal telephony service?

    Signal distribution in a multi-channel universe

    There is currently a global trend toward a multichannel universe, as dozens of international channels jockey for position in a growing number of markets around the world.

    High capacity cable systems and digital DBS systems are creating the platform for the many channels that are now available on a global basis. It is estimated that within seven years there will be 250 million subscribers world-wide who will be digital (hence multichannel) subscribers.

    Programming services are localising their content in order to make it more acceptable and attractive to audiences around the world. Such localisation includes language and cultural versioning, and joint ventures with local partners to create domestic content for repackaging with the international content. For example, CNN has created a Spanish version; the Weather Channel is highly localised for every market; and E-Entertainment adds features on local stars to its line-up of international stars.

    South Africa is facing the same array of services, led initially by the multichoice digital bouquet on the DTH platform (now reaching nearly 120,000 subscribers).

    However, the difference is that there is very little localisation or new South African services created by this new platform - with the exception of a new sports television service by M-Net (although it is also starting as a terrestrial subscription service). While there is some preoccupation with terrestrial broadcasting, there may be opportunities to generate development of South African television services around the themes of children's programming, history/geography, greater service in African languages, nature/science/computers, music/culture, education, all news, and the like.

    6.14 What should be the focus of policies for multi-channel signal distribution? Why?

    6.15 Should the entry of the telecommunications carrier into the broadcast field be accompanied by a corresponding opening up of the telecommunications field to broadcasting signal distributors?

    6.16 Should policies on multichannel delivery platforms be geared to the creation, development, and carriage of new South African channels?

    Distribution Platforms

    Technology is yielding a new diversity of distribution platforms, as follows:

    • digital DTH - involving a bouquet of digitised services requiring digital decoders and roof-top antennas, possibly with a basic/premium tiering structure for the television services;

    • coaxial cable - either digital or high bandwidth analogue - which are typically established in the first instance for the retransmission of cross-border stations or distant signals, but now are the main segment of the multi-channel subscriber market

    • digital multi-channel multipoint distribution system (MMDS) - which is an alternative to cable at 2.5 Ghz, as well as a competitor to cable in the delivery of a mix of local and distant programming services;

    • digital local multipoint distribution system (LMDS) - which is another wireless platform at 28 Ghz that is gaining in international interest; there is typically more spectrum availability in this higher band, but the transmission is limited to 2-5 km. (unlike MMDS with a range of 30 kms).

    • digital television transmission (DTT) - the conversion of terrestrial analog to digital transmission is being planned by several countries; the result could be a mix of HDTV (which needs substantial spectrum) and multiplexed services (several could be placed on the VHF/UHF spectrum allocated for digital services);

    • local telephone - the phone company's copper plant does not provide enough spectrum for broadcasting services, even though ADSL technology could deliver VCR quality video signals; however, phone companies are reviewing the other technology options, including hybrid fibre coax (the cable model) to provide competitive services.

    • Electricity supply cables - recent advances in using the existing electricity supply network to deliver the Internet poses a real possibility for a multipurpose application of this technology. This raises the question of the role of Electricity supply utilities and the extensive electricity supply network in the future.

    • Digital Audio Broadcasting -

    6.17 Which multichannel platform(s) is (are) most appropriate for South Africa? What measures are necessary to stimulate their development? What regulatory regimes should be instituted for them?

    6.17.1 Should the new technologies be licensed as separate and specific categories?

    6.17.2 Should MMDS be licensed as a separate and specific category?

    6.17.3 Should Satellite be licensed as a separate and specific category?

    6.17.4 Should LMDS be licensed as a separate and specific category

    6.17.5 Should Cable be licensed as a separate and specific category?

    6.17.6 Should regulation rather strive to remain technology-independent?

    The challenge for South Africa is to establish a framework which efficiently introduces multichannel services, and which meets broadcasting system objectives. A multi-channel signal distribution strategy is important primarily as a means of expanding the distribution infrastructure in South Africa, and to be a platform for future growth in new television services - programmed domestically.

    International experience has shown that the successful entry of multichannel distribution platforms relies on the development of a large offering of new services. If a subscriber is expected to pay R100 - R200 per month, the perceived value of the new services should be clearly a nett addition to what is already available off-air. The addition of an attractive package of new services will not necessarily guarantee such an appeal, leaving aside the large scale importation of foreign signals.

    6.18 Should South Africa plan to introduce several new specialised channels in concert with the introduction of new foreign services?

    Whatever distribution platform is selected, some consideration should be given as to the policies that would govern such carriage of programming services, including the following:

    • non-exclusivity of South African TV services - in order to provide the largest possible subscriber base for South African services;
    • priority carriage/advantaged carriage of South African services, e.g. the inclusion of South African services on any multiple signal tier;
    • limited or no vertical integration to prevent favouritism in access by some programmers and not others;
    • the regulation of subscriber fee rates until there is sufficient delivery system competition;
    • the regulation of wholesale fee rates between the signal distribution system and the South African programming services;

    6.19 What conditions, if any, should be placed on multichannel signal distribution systems to ensure the viability of South African channels?

    6.19.1 What regulatory model must be adopted?

    Some of these delivery technologies require the use of spectrum and/or are subject to regulation as telecommunications facilities providers. In some cases this situation can lead to the bypassing of the broadcasting regulator. For example, the licensing of a digital tier of services for DTH on a FSS (telecom) satellite band merely requires the approval of the telecom regulator. Accordingly, the allocation between broadcasting and telecommunications use needs to be co-ordinated; options include:

    • the integration of the separate organisational jurisdictions over spectrum management, and broadcasting and telecom regulation;
    • the creation of a logical approval process that permits joint evaluation of the application but keeps separate agencies;
    • in this case, the approval process should deal with the sequencing of the approvals as well, since decisions under one set of regulations may preclude options under another set of regulations.

    6.20 What regulatory process should be established to ensure the co-ordination of licensing and regulatory decisions among different entities?

    6.20.1 Should the IBA and SATRA be merged into a single Regulatory Authority?

    6.20.2 What mechanism should exist to solve conflicts between telecomms users and broadcast users in a transparent manner? Should a new Statutory Agency be set up to deal with Spectrum Management and Planning?

    Because of the proliferation of choice among distribution systems, the issue is whether there can be competition among multi-channel signal distribution systems. Most of the delivery system technologies require single operators in order to preserve economies of scale and efficiency. While there can be competition within a technology, the competition will largely be between technologies (e.g. MMDS and DTH).

    Competition can bring the benefits of the faster introduction of new services, more choice, and lower prices. There is also less need for regulation to protect the programming services. The benefits for licensing only one group per technology lie in greater security of investment because there is no direct competition, and in critical mass presumably because of limitations in the discretionary service subscriber base.

    6.21 Should delivery system competition be encouraged or entered into with caution?

    6.21.1 Whether or not it is permitted, how are the obligations established for each delivery system alternative?

    6.21.2 Should broadcasting transmission players be allowed to provide new services such as Internet and under what conditions?

    6.21.3 What is a regulatory regime that can encourage innovation in signal distribution?

    6.21.4 How should self-help relay stations be regulated?

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    Chapter 7. Convergence and New Media

    The International Telecommunications Union (ITU) describes convergence as

    • The provision of new services over existing infrastructure, development of new types of infrastructure, and the enhancement of existing services and technologies to provide new capabilities.
    • The integration of technological or market capability across previously separated technologies, markets or politically defined industry structures.

    The convergence of telecommunications, data storing and processing, imaging technologies and broadcasting is ushering in the era of multimedia, in which voice, data and images may be combined, accessed, transformed, conveyed and stored according to the needs of users. The practical effect of this is that markets are converging and traditionally defined industry segments are becoming less and less distinguishable. As an example, telecommunications equipment, telecommunications network services, computer hardware, software, signal distribution and broadcasting are converging. This is most clearly reflected in the wholly unanticipated growth of the Internet. The extent of convergence is also noticeable in the speed with which the telephone and broadcasting industries are entering each other's markets both at the technical and service levels.

    Convergence creates increased scope for providing services to the public that may be more affordable and to meet the challenges of social and economic development in the information age. The extent to which South Africa can harness the new capabilities of convergence to meet socio-economic needs of the country will depend on the policies devised in relation to national competition, market policy, international commitments made in multilateral trade agreements as under the WTO, and sector specific (and sometimes company specific) regulatory policies.

    Because the trends of convergence are largely occurring beyond the direct control of governments, it is apparent that regulation will lag convergence and technological changes. If we are serious about harnessing the potential of convergence to meet basic needs and grow the economy, then the key issue is not how to regulate convergence but rather how regulation should (and must) change in the light of convergence.

    7.1 What areas of broadcasting and telecommunications regulation are affected by convergence?

    7.2 Should convergence be promoted within the South African media /communications market. How can it be encouraged/ promoted? Who should play this role?

    In general, broadcasting and telecom policies and regulations should promote technological innovation, market development, and investment certainty. They also must address the basic needs of the public, especially those of historically disadvantaged communities, in a cost-effective way. With the onset of convergence, there will be modifications in policy and regulation to meet these objectives.

    Convergence increases the capability of network facilities for delivering a wider range of services, often enabling moves into the traditional markets of other facilities providers. For example, signal distribution facilities can be used to deliver telecommunications services, in addition to broadcasting services. Both signal distributors and telecommunications networks can be harnessed for the provision of new media services. Hence, there is opportunity for overlap in regulation, whereby the same transmission facility can be subject to scrutiny by broadcasting and telecommunications regulatory authorities. One may attract common carrier regulation, and the other may entail obligations stemming from conditions imposed through broadcasting regulation.

    There is a convergence of different conduit technologies such as wireline based and wireless or broadcasting based networks. Digital technology allows all kinds of signals, representing text, data, audio, video to be carried over the same network. It also enables new services to be realisable using the same infrastructure.

    7.3 What mechanisms should be adopted to manage regulation where there is a convergence of broadcasting and telecommunications facilities or services?

    7.4 How should the regulatory machinery - the IBA and SATRA - be organized to address convergence issues? Through more co-ordination, joint public proceedings, or organisational integration?

    Electronic Distribution of New Media

    New media are related to convergence because they represent the middle ground between telecommunications and broadcasting. Many stakeholders can lay claim to the new media business, including: radio and television broadcasters, signal distributors, telecommunications carriers, print publishers and data base vendors, and film/video production companies.

    New media are created from the integration of two or more traditional media, typically accessible on an interactive basis. Examples of content-driven new media are CD-ROMs, on-line access to data bases, the Internet, data and image broadcasting services, multimedia applications to distance learning, and electronic games. Other examples that are communications driven include electronic commerce (like home shopping, banking transactions, etc.), e-mail, and video/image conferencing.

    New media and multimedia are often used interchangeably. New media content can be integrated with electronic distribution systems to form new media services. Though different from what is considered as traditional television and radio services, new media services that are content-driven raise similar public policy issues. For example, the full development of Internet web sites of national information and culture would seem to be a desirable objective.

    7.5 Should the development and deployment of new media content services be taken into consideration in the development of new broadcasting policy?

    New media services can be delivered as fully interactive, such as in the case of the Internet of today. Alternatively, new media can be delivered more in a broadcasting mode, which can be called data or image broadcasting. It is important to make further distinctions between the two broad categories.

    The Internet

    The Internet forms the core of the information highway today. On the Internet consumers are able to travel around the world with their computers in search of entertainment, communications and information. This is how most users make use of the Internet today.

    The "traditional Internet is a narrow band interactive facility used for e-mail and access to data/graphic bases, largely known as websites. Some of the content is indexed by the Internet Services Provider (ISP) and marketed as a brand, e.g. America On-Line (AOL). This content is universally accessible, and is not easily subject to regulation. At this level there has not yet arisen a need to insert a broadcasting regulatory regime for the Internet.

    What is more of a concern to society is the way in which the Internet is being used to make anti-social content available to Internet users. Attempts have been made to hold the ISP responsible for the content in cases where it is deemed inappropriate to society (e.g. pornographic web sites). However, ISPs are not in a position to monitor web site content as a publisher would do (except for their own proprietary content), and are not easily held accountable for the content.

    7.6 Should regulatory mechanisms be developed to provide an oversight over potential misuse of the Internet?

    As the power of computing improves and new technologies are procured, broadcaster are starting to use Internet to transmit pictures, sounds and data in order to boost their image with the public. At present most broadcasters are offering services which are based on their existing radio or television programming. For example recently Quincy Jones signed a contract with SABC to broadcast radio FM on the Internet. This move will have a positive impact to South Africans that are overseas. They will be able to listen to their home station, news and music. However Internet broadcasting will have a negative effect on the international broadcasters. More and more people will be using the Internet for radio services.

    New delivery systems, like cable, MMDS, or satellite, are expanding the capacity of the Internet, particularly in the downloading of content. Cable and DBS operators are installing high speed Internet access for subscribers who invest in high speed modems. These networks are hybrid in that the return path from the subscriber to the ISP server is via the local telephone company.

    Telephone companies will be expanding the capacity of their networks, through such technologies as Asynchronous Digital Subscriber Loop (ADSL). This technology enables the telephone companies to use their twisted pair copper access to users to move large amounts of data and thus provide high speed Internet access. ADSL technology provides for transmission at speeds of 1.5 Mbps (up to 18 kilofeet) up to 6 Mbps for very short distances (up to 6 kilofeet) on copper pairs. This technology has managed to overcome the barriers created by copper's electrical characteristics.

    The availability of ADSL does not erase the advantages of fibre viz., tremendous capacity and savings in operations costs. However ADSL will allow carriers to offer services to dispersed locations at high data rates more economically. Realistically, ADSL should be viewed as a stopgap technology designed to provide higher speed data services until broadband services are widely available over coaxial or fibre optic cable connections at user site. In terms of high speed Internet, ADSL is an excellent application; while it can support video, ADSL technology is not likely to make copper-based networks a candidate platform for multi-channel broadcasting distribution.

    The consequence of all these high speed access technologies is that ISPs will be providing the gateway to enriched, multimedia content. Once it is clear that there are a significant number of high speed modem subscribers, content creators will develop content rich in audio-visual components. This content upgrade enables the Internet to become a more effective provider of entertainment and information services.

    Moreover, there are now product development initiatives by system suppliers and system operators that should lead to Internet access via the television set - and to television access via the PC. The world of "computervision" will be upon us, although no one could predict what business model will achieve commercial success. Therefore, it will no longer be easy to differentiate broadcasting from telecommunications services simply by the user display device.

    Despite this convergence of new media and the traditional areas of broadcasting and telecommunications, there remains the resolution of policy issues driven by objectives and concerns of broadcasting - universal coverage, local/national content, contributions to the broadcasting system and the like

    7.7 Should the Internet attract broadcasting regulation, particularly for Internet services with enriched audio-visual content?

    Broadcasting regulation could be found to be somewhat awkward in coming to grips with the Internet. For example, it is difficult to pinpoint the potential licensee, and to prescribe workable licensing responsibilities with respect to local content development. Nevertheless, the objectives of universality and financial contributions to productions could be reviewed within the broadcasting context.

    7.8. If deemed part of the broadcasting system, what additional provisions would be required in legislative form or government policy that would provide the tools to exercise regulatory oversight?

    The Internet is attracting interest internationally in terms of potential regulation. Other countries are considering whether and in what form the Internet should be regulated. Of particular interest is the American initiative to ensure that the Internet is deregulated entirely (the "electronic commerce" initiative as championed in the Ira Magazine report). The American approach is to deem Internet services as enhanced telecommunications, which were deregulated in this year's WTO agreement on basic telecommunications.

    While the US is the most prolific Internet user and content developer, it is possible that the best way to stimulate Internet development is to keep the regulatory hand away from this new medium. Aside from the American pursuit of this position, the next WTO services round will deal with audio-visual services, which include the Internet. South Africa will be expected to develop its position in this regard.

    7.9 Should the Internet be declared "regulation free" with respect to broadcasting, on such liberalisation would lead to more rapid development and usage?

    7.10 In Internet "broadcasts", how are the rights of the music industry and musicians protected?

    New media content and services are becoming a significant new medium of cultural and social relevance. Whether the Internet attracts broadcasting regulation or not, it still may be desirable for South Africa to develop its own content suppliers. Even the above cited Magazine report acknowledges that countries may wish to develop Internet content for cultural and socio-economic reasons. There may well be measures in this case that will pass future WTO agreements, for example, financing from investment funds or tax credits.

    7.11 Should South African Internet content be stimulated through some form of financial incentives? What mechanisms would be most appropriate?

    More and more broadcasters are using the Internet to give their viewers complementary content to specific programmes, or to promote upcoming shows. Interactive Web sites are another form of communication between broadcasters and listeners.

    7.12 Should Internet applications built into the broadcasting programme itself be considered as part of broadcasting content?

    Data/image broadcasting

    Innovation has resulted in new terrestrial, satellite based and optical fibre technologies that offer tremendous amount of bandwidth and can be used for anything from entertainment and distance education to transmission of highly detailed images for remote medical diagnosis. The increasing application of digital technology means that any type of information can be sent as a stream of bits in compressed form and reconstructed for use at the receiving end.

    Image broadcasting refers to digital photographs or traditional photographic images that have been scanned into a computer or other digital device. This capacity makes it possible to send a photograph through the Internet to a friend, and more to the point, to offer an image distribution service to subscribers. Traditionally, such a service was not technically possible; only broadcasters were able to send picture frames when necessary.

    With multimedia technology and high speed networks, content providers can offer this kind of service via a wired and wireless telecommunications networks - at present without attracting broadcasting regulation. Moreover, as broadcasting transmission becomes digital, the broadcasting distribution system can provide the transport for images and other new media content. For example, a broadcaster can add alphanumeric, graphics and audio enhanced, and image content services as "companion channels" to the television service. Such content could be construed as part of the overall broadcasting service; it could be packaged by the broadcaster, or by another third party (which could include a broadcasting signal distributor or a telecommunications facilities provider).

    7.13 Should "new media" broadcasting be considered part of broadcasting for regulatory purposes? Only when it is an associated part of the broadcasting service? Only when delivered on a primarily broadcasting network platform?

    Data/image broadcasting has a tie back into the Internet, of course. Through what is known as "push technology", Internet content providers download (equivalent in function to broadcast, although not in form) content to the subscriber's PC, where it resides for recall by the user. Typically, a user has selected what categories of content (e.g. sports results for favourite teams) is to be downloaded.

    In another example of broadcasting/Internet cross-over, video content is offered via the Internet as "video streaming". This means that video is downloaded at slower speeds for replay as video at the user's PC terminal. It is comparable to real audio, which are radio programmes/stations available on real time on the Internet, except that present technology makes real video uneconomic at this time.

    Should the Internet be subject to regulation when it approximates "data/image broadcasting"?

    Forward thinking broadcasters and production companies with significant libraries are viewing their assets from the perspective of new media applications. Those really far sighted acquired the new media rights to such content at the time of original acquisition. In the future, broadcasters become "content packagers", seeking to exploit new media markets. The business concept is that of a content provider who stores information and entertainment programming and data in digital file servers, and makes them available to broadcasting, Internet, and data broadcasting outlets.

    7.15 How can broadcasting policy mechanisms encourage the development of indigenous content creators to exploit new media and broadcast outlets?

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    Chapter 8. Universal Service and Infrastructure

    The socio-economic developmental goals as alluded to in the Reconstruction and Development Programme (RDP) involve achieving fundamental principles of universal service and infrastructure. The RDP goals seek to locate the communications industries at the heart of South Africa's development and to extend access to communication services to all South Africans.

    These principles include:

    • Nation building
    • meeting basic communication needs of society
    • building the economy
    • economic empowering of the historically disadvantaged in South Africa

    Policy makers, regulators and the broadcasting industry can play a significant role in the integration of broadcasting in the communications industry. Three critical areas must be addressed in broadcasting policy formulation:

    • the achievement of universal service in broadcasting;
    • the effective use of broadcasting services for socio-economic development;
    • providing a wide range of broadcasting services to cater for the various needs of the public.

    Within the broadcasting universal service has traditionally been associated with the public broadcasting mandate to reach 100% coverage, full spectrum programming catering for the tastes of the audiences.

    Universal service has traditionally been defined as the provision, on demand, of voice telephony to any citizen. It is often associated with an 'affordable' price, which has usually involved the geographical averaging of prices.

    The profusion of new services such as Internet, the entire sectors of broadcasting, telecommunication and the convergence of the three sectors, force a reconsideration of what is meant by universal service.

    In South Africa, the television broadcasting services footprint has been able to cover at least 80% of the population. Moreover, radio services have been spread across the country through the provision of community, public and commercial entities. The majority of the population that benefits from the infrastructure deployment is found in the urban areas.

    Universal service in broadcasting would firstly mean ensuring that 100% coverage is provided for the whole population and that universal service goals extend broadcast services of the three tiers to reach the every one.

    Secondly, universal service will entail extending the broadcasting infrastructure through various means of signal distribution technology in order to ensure that broadcast services are accessible to all. This process will require the commitment of common carrier signal distributor, electricity and telecommunications service providers to ensure that universal service and access are achieved. A choice of an appropriate signal distributor, whether analogue or digital, should be made with the sole aim of achieving universal service.

    Thirdly, universal service must relate to the diverse programming needs of the South African population. The traditional definition of a public broadcaster as a provider of programmes for people from two years of age to the grave should be considered as a traditional approach in conditions of monopoly.

    Different segments of the South African population require different programmes because of how these segments live, work and enjoy themselves. Any definition of universal service must therefore deal with the diversity inherent in society.

    Cultural and language diversity also feature in discussions on universal access. A point is made that in a multi-cultural society universal service should also contribute to the preservation of the constituent parts of the cultural mix.

    8.1 What should be the definition of Universal service in broadcasting?

    8.2 Who should be required to fulfil universal service principles?

    8.3 Should the public, community and private sectors of broadcasting be expected to fulfil universal service principles and how?

    8.4 What would serve the needs of universal service in broadcasting best in the field of signal distribution, given the challenges posed by new digital technologies?

    Fourthly, it will mean introducing mechanisms that will ensure that the blind, mute and deaf receive broadcasting services and participate in the programming of their broadcasting services.

    8.5 How should universal service in broadcasting provide programming for the marginalised sectors?

    8.6 What mechanisms will ensure audiences are proactive in the production of programming that suits their needs?

    Lastly, it will mean providing audiences with a bouquet of choices in broadcasting services by introducing competition and introducing more players to broadcasting services.

    8.7 Are the above features of the definition of universal service in broadcasting adequate to satisfy the developmental goals of the RDP?

    In South Africa, there are currently different types of broadcasting services, and these include:

  • a public service which has national and regional coverage;
  • a community service which serves a particular local community based on
  • geographic and community of interest criteria; and
  • a commercial service which is directed at a targeted or niche audience.
  • Moreover, there are financial barriers that limit the possibility of every household in the country accessing broadcasting services and these vary according to services involved. Radio poses the lowest barrier, whilst television and subscription services are expensive to the user. Community centres with reception facilities have offered opportunities for many people to gain access to a greater variety of broadcasting services in poor countries such as Brazil.

    8.8 Which component of broadcasting service should be made universal in order to satisfy universal service and access goals?

    8.9 What supportive structures should be put in place to ensure that the selected component of broadcasting service is effective in achieving the desired goals?

    During the pre-democratic South Africa the provision of broadcasting services was determined by, among other things, the following factors:

    • race/ethnicity
    • geographical location
    • disposable income

    The status of broadcasting services therefore reflects the historical patterns where the spread of technologies and broadcasting services have been provided according to the notion of commercially viable (urban and rich) and commercially non-viable (poor and rural) consumers and communities. The aim of universal service in broadcasting is to satisfy all viable demands and needs, but also ensure that commercially non-viable consumers also obtain an adequate level of supply of broadcasting services. Those communities who have been historically disadvantaged have been marginalised and their development stunted through the lack of access and choice in broadcasting services.

    8.10 What regulatory policies and activities are necessary for the achievement of universal service in broadcasting in South Africa given these historical imbalances?

    In South Africa, there is a substantial amount of approximately 3,8 million main telephone lines and fair tele-density of about 9,2 per 100 population. Telkom's five year network expansion and modernisation programme is aimed at increasing penetration in under serviced areas. Electrification penetration has reached about 85% of the South African population. Broadcasting infrastructure development should on an equitable basis receive pride of place alongside these and other essential services. Basic network services are required to open services to all in a non-discriminatory manner. The existing infrastructure should be identified to ensure that frequency spectrum is administered and managed effectively through a revised frequency plan; and that if need be it should be upgraded/replaced/repositioned to meet the needs of all and be on a par with international trends.

    8.11 How can these mechanisms be effectively implemented to ensure that universal service and access in broadcasting in South Africa receives the developmental attention it deserves?

    8.12 What supportive structures are needed to ensure that these mechanisms are effective in realising the desired goals?

    The provision of broadcasting services is a collective effort by three major players such as sources of finance, decision-makers and the providers of equipment available to pursue broadcasting services. This effort is thwarted by the tariffs imposed on importation of the broadcasting equipment.

    8.13 What role should each sector play to ensure that the prospects of universal service and access goals in broadcasting in South Africa are achieved in view of the financial constraints?

    South Africa with its multimedia, electrification and communication infrastructure services provides an opportunity to extend broadcasting services to the rural and poor. Universal service; if used as a multiplicity and an interactive mode of a delivery platform for broadcasting services to supplement public service such as education, government information and access, health service delivery (telemedicine); can have a great multiplier effect in service delivery.

    8.14 How can these different categories of service be co-ordinated to provide more broadcasting businesses, thereby promoting new investment opportunities in poor and rural areas?

    Broadcasting Coverage

    It has been estimated that SABC's maximum coverage of the South African population for television purposes is currently around the 80% mark for one of its 3 channels. Significantly lower coverage has been achieved by each of the other 2 channels.

    Clearly, comprehensive coverage of the country is a high priority. Unless television signals are available in every part of the country, television broadcasting services cannot be accessed by all South Africans.

    This is particularly important from the point of view of public broadcasting services.

    It is still of course, highly desirable that private television services also reach the stage of complete coverage.

    Much work needs to be done to plan the provision of infrastructure - in the form of towers, transmitters, translators etc - so that a realistic assessment might be made of the size of the task in front of the broadcasting sector. This will also be critical for the purposes of radio broadcasting.

    While most South Africans can receive a radio service of some kind, there seems to be tremendous scope for an expansion of radio services throughout South Africa, particularly in the case of language services, and other services of a public broadcast nature.

    The provision of such infrastructure is a priority, and both the private and public sectors should be encouraged to contribute to the task.

    But, at the moment, planning for this purpose does not appear to be as sufficiently advanced as might once have been anticipated.

    The IBA Act requires the IBA to prepare a frequency plan "whereby the maximum number of frequencies available for broadcasting services is determined", but no such plan appears to have been finalised at this stage. It seems that a more proactive approach to the planning of South Africa's future use of the radio frequency spectrum might be necessary.

    It might also be necessary for the Minister and the Parliament to be given some greater role in the setting of future broadcasting priorities. At the moment, the whole of this very large function is effectively within the jurisdiction of the IBA, and the IBA lacks Parliamentary and political guidance and direction in this matter.

    Ministerial and Parliamentary involvement seems necessary, particularly if services in the nature of traditional public broadcasting are to be encouraged throughout South Africa.

    Such services are funded principally from the public purse, and sensible decisions about priorities cannot possibly be made without identifying and acknowledging the proper role of government in funding or directing those services.

    8.15 Is the planning of South Africa's future broadcasting utilisation of radio frequency spectrum for radio and television adequate?

    8.16 If not, how might it be improved?

    8.17 How might proper recognition of the democratic roles of the Minister and Parliament be achieved?

    8.18 Who should decide on priorities and what should be priorities?

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    Chapter 9. Human Resources Development

    Human resources development in the broadcasting industry has, for many years, been confined to the needs of the SABC.

    As a state monopoly operating in accordance with apartheid policies, the SABC's human resources development strategy has been one biased to benefit a certain section of its workforce at the expense of the other.

    Human resource development at the SABC has always been subject to the country's historical vicissitudes. Following its inception in the late 1930s, the SABC was largely staffed by English-speaking South Africans.

    Following the outbreak of World War II, many English-speaking SABC staff volunteered to serve in the war against Nazi Germany. This created a vacuum which resulted in the recruitment of a host of Afrikaner-speaking South Africans from the rural parts of the country - at the time, a marginalised group severely affected by the Great Depression.

    Like many other public corporations then, such as the Post Office and the South African Railways, the SABC was used as a tool to empower the Afrikaner people.

    With the conclusion of the war and the ascendancy of the Nationalists to power, the Afrikaners entrenched their control of the SABC through the secret Broederbond organisation.

    As a result, the development of a human resource strategy for the SABC was one, which sought to empower a certain section of the SABC workforce while neglecting others.

    Managerial positions were exclusively reserved for whites, and blacks were employed to fill positions only in indigenous language services.

    On-the-job training in technical and broadcasting production was largely aimed at the white section of the SABC staff. The whole strategy of human resource development was aimed at excluding the indigenous from acquiring broadcasting skills up to a certain level of production capacity.

    Throughout these years, the SABC had been the main broadcasting training ground for producers and technicians in the country.

    The licensing of the country's first private television channel in the mid-1980s saw the beginning of an exodus of skilled personnel from the SABC towards newly licensed broadcasting services.

    With the coming into office of a new SABC Board in 1994, a new human resource empowerment strategy was put into place to address the inequalities. The management structures of the SABC changed from being 97% white controlled in 1994 to a 55:45 ratio in 1997.

    The coming into the market of new broadcasting players is increasingly making it difficult for the SABC to dedicate resources toward personnel training because of the danger of losing these trained personnel to new broadcasting players.

    Human resource development strategy in the broadcasting industry is faced by the following challenges:

  • Lack of integrated training to empower the historically disadvantaged
  • The continuing 'brain drain' of skilled personnel from the SABC to newly licensed commercial broadcasting services
  • The need to create new expertise to interact with the changes in technology
  • The development of the South African broadcasting industry is directly related to the development of skilled personnel, who in turn will contribute to the production of quality programmes.

    It is on this basis that the development of human resources must be seen as an investment for the industry.

    People working within the broadcasting industry are the most treasured assets of the industry. Broadcasting is essentially about ideas and conversion of those ideas into programme content. It is in this context that people are the means and the ends of the development process in broadcasting. Consistent policy positions that seek to improve the broadcasting industry must have as their departure point a focus on human resource development as a capital investment.

    The South African Qualifications Authority

    Government policy places great importance on human resources development as an integral part of the overall developmental needs of the country. The RDP and Education and Training White Papers both support an integrated education and training system for South Africa. The objectives of this integrated approach to education and training are to redress inequities and provide human resources required for economic growth.

    The South African Qualifications Authority has been instituted to recognise the bodies, which set educational and training standards.

    The Broadcasting industry employs many people in various segments of the industry and over many ranges of skill. The standards of training and skills in the broadcasting industry suffer from the approach to human resources development in the past. Many of the people participating in this industry have had no chance for formal training as there has never been an integrated approach to training and skilling.

    What currently exists are uncoordinated and ad-hoc training programmes through workshops by various minor institutions such as the Newtown Film and Television School, Institute for the Advancement of Journalism, Bush Radio training and commercial colleges etc.

    With the process of deregulation, the SABC cannot be expected to be a training ground for the industry. The lack of skills in the industry will continue to be a problem unless addressed.

    The expansion and diversification of broadcasting services will mean an added reliance on skilled personnel to deliver new and improved services.

    9.1 How can the broadcasting industry make sure that its education and training needs are met and integrated into a single system?

    Training is also referred to by the Skills Development Bill, which sets out relations to the SA Qualifications framework and proposes a funding mechanism for training.

    The Skills Development Bill provides for the setting up of Sector Education and Training Authorities. A SETA and its sub-sectors should be identified by the employers, trade unions and other interested parties in the entire sector.

    Broadcasting training needs to be located within a broader sector Education and Training Authority, or broken down and have component parts allocated to different industry categories as represented by different SETAs.

    Within a given SETA, the relevant aspects of broadcast training will need to fall under an Education and Training Board that treats it as a specific sub-sector.

    9.2 Should broadcast training in all its aspects be accorded specific status within the SA Qualifications Framework and the training sectors as envisaged by the Skills Development Bill?

    9.3 Within which SETAs should broadcast training be located?

    Human Resources Development Strategy

    A human resources development strategy needs to be put in place that will bring about change and prepare South Africa to face the challenges created by technological, economic, social and cultural change. To adapt to new requirements and achieve levels of performance needed for survival and staying competitive in the global market of broadcasting.

    The Skills Development Bill sets out a levy for human resources development of between one and one-and half percent on industry sector payrolls. Such levies will be paid into the National Skills Fund (20%) and into Education and Training Funds (80%) that should be set up by Education and Training Boards. The ETB may receive and allocate funds for accredited training programmes and learnerships.

    The Skills and Development Bill sets out mechanisms of monitoring and auditing training programmes. The SETAs and ETBs seek accreditation under the SAQA as institutions responsible for monitoring and auditing programmes. They should liase with another authorised body to meet SAQA requirements for setting standards and designing qualifications.

    9.4 What human resources development strategy should be adopted for the broadcasting industry?

    9.5 What policy should be adopted to address the short term and long term human resources needs of the broadcasting industry?

    9.6 How should the strategy tackle issues of technological convergence and future developments within the industry?

    9.10 Who should be responsible for the development of the human resources strategy for the entire industry?

    9.11 What should be the objective of the strategy?

    9.12 Who should participate in formulating the objectives of the strategy?

    9.13 What should the HR strategy be toward ensuring representivity?

    9.14 What specific skills in order of priority must the strategy address?

    9.15 How should a mechanism be developed to accredit training and trainers and recognition by the SAQA?

    The government of South Africa supports corrective action as a strategy to correct the social and gender imbalances in our society. The broadcasting industry is no exception and needs to redress historical imbalances in employment practices and human resources development.

    The IBA Act requires new licensees to develop a human resources strategy which is in compliance with corrective action.

    9.16 What mechanisms should be used to monitor broadcasters' equal opportunity employment and training obligations?

    9.17 What should be the corrective action goals and directives of the human resources development strategy?

    9.18 What mechanism can be used to encourage the industry to become more involved in training for the broadcasting sector?

    9.19 How should existing licensees comply with the Human Resources policies on corrective action?

    9.20 What would be the objective of multi-skilling within the strategy?

    Human Resources Fund

    In many developed countries, governments and broadcasters set up a broadcasting fund to finance and develop local productions (as in Canada where the fund is used to develop local programming) or to supplement areas of their industry which have not been previously developed.

    In South Africa we do not have a broadcasting fund to develop areas in the industry that need special attention such as human resources development, and the promotion of and development of South African content. With our past history of foreign domination and influx of foreign programmes, there is a need to develop the industry to produce local material for viewership.

    9.21 Should a Training Fund be established alongside that envisaged by the Skills Development Bill?

    9.20.1 Who should contribute to such a fund/s?

    9.20.2 Who should have access to such fund/s?

    9.20.3 Who should decide on allocations?

    School of Broadcasting and Production

    In South Africa there is no integration or co-ordination of training for broadcasting and technical production. There is dispersed training at various centres in radio, TV and Internet production skills, and covering the disciplines of journalism, drama, management, engineering etc.

    What needs to be weighed is the existing infrastructure investment and training activities spread around South Africa, against creating a centralised comprehensive facility or mechanism in between that could lead to greater co-ordination and rationalisation of broadcast training.

    9.21 Considering existing training courses being offered at tertiary institutions, formal and informal training institutions, is there a need for a specialist school of broadcasting?

    9.22 If a dedicated, centralised and specialised school of broadcasting is ideal what should be the relationship between the broadcasting school, existing tertiary institutions, the broadcasting industry and government?

    9.23 How should the school of broadcasting be funded?

    9.24 What should be the focus of the School of Broadcasting?

    9.25 Is there a need for an interaction with the international community on matters relating to training in broadcasting? If so, what form should this relationship take?

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    Chapter 10. Regional and Global Strategy

    The need for a regional and global strategy as part of the Broadcasting policy stems from South Africa's entry into the global information society. South Africa is now taking up its position as a participant in international organisations such as the International Telecommunications Union (ITU) and the World Trade Organisation (WTO) and has a role in the Southern African Development Community (SADC).

    These regional and international organisations offer South Africa a chance to participate in the harmonisation of policies affecting broadcasting. Discussions at this level focus on policies, regional and international consultations and co-ordination.

    The South African Government is a signatory to the Intelsat Convention, the major supplier of satellite capacity to broadcasters. Telkom represents the South African Government in this convention.

    The SABC as the country's Public Broadcaster, Sentech and Orbicom also participate in forums such as the Commonwealth Broadcasting Association and the Southern African Broadcasting Association.

    A policy framework coupled with a strategy will enable Government and the Operators to participate in these regional and international organisations with the aim of achieving policy ends in the area of broadcasting.

    The African context

    Africa as a continent lags behind other continents in the development of broadcasting services. Most African countries still rely on Public Broadcasting and State Broadcasting entities to deliver programming to the population.

    Government Departments are responsible for policy and regulations in a majority of African countries.

    Africa's broadcasting industry can be described as suffering from a lack of critical factors such as capital, expertise and technology.

    African broadcasting faces several challenges including:

    • The impact of globalisation
    • Accessing new technologies
    • Re-organisation of the African broadcasting industry in line with the trends.
    • Addressing a developmental gap and expanding service provision
    • Mobilising resources to enable modernisation
    • Developing new convergence applications
    • Programme production capacity
    • Skilled human resources

    The current democratisation taking place in the African continent offers a real possibility to interact with these challenges and provide broadcasting services that meet the needs of the continent and lay the basis for Africa to construct an information and knowledge society.

    Policy Level

    Even though African countries are part of regional and international organisations, no common and unified positions have been pursued in the area of broadcasting so as to focus African countries and the international community to address and resolve specific problems facing the African continent.

    The need for this unified approach to challenges presented at international level is consistent with the long term planning needed to achieve a fundamental restructuring of the broadcasting systems in Africa to participate in the global information system.

    A real threat exists that Africa, as a continent, will be left behind in the sweeping transformation and globalisation of communications industries. This would further marginalise the African continent and prevent the integration of African countries in the global information system.

    Complicating the situation is the absence of a unified approach to constructing viable broadcasting systems at policy and legal levels. This inconsistence at policy level prevents the emergence of conditions that are conducive to developing synergies to enable Africa to leverage investment and developmental funds.

    What is clear is that a common outlook to policy and regulation is a necessity in order to develop a trans-border framework to engage with challenges at an international level.

    Operational level

    Technological innovations make it possible for the African countries to share broadcasting services. In many instances African countries are already sharing services like the BBC and the CNN. M-Net, the South African company is also involved in providing a pay service emanating from its Randburg facilities in conjunction with local partners in a number of African countries. These operators have identified the gap common to African countries and are supplying services that augment local services.

    There are many areas of broadcasting where co-operation by African broadcasters can help in distributing the scarce financial resources and thereby increasing the value of returns to investments.

    This co-operation could go a long way in addressing programme needs that are shared by the African countries. It could stimulate the creation and dissemination of programme content which, in turn could help to raise the level of African content in broadcasting services, integrate broadcasting standards and reduce Africa's dependence on other countries for programming materials.

    Children's programming, educational programming, news and information, sports and entertainment programming with a distinctive continental feel and shared programming values would benefit from this continental approach.

    Developing Human Resources is now considered to be a necessary investment in any operation, which seeks to integrate itself in and function within global trends. Africa as a continent faces a daunting task in the area of human resources development.

    Even if the African countries as single entities could make the initial investments in human resources development, technological innovations in the area of communications happen very fast and demand continuous investments in the training of personnel. This will likely increase cost of developing human resources beyond the abilities of many African countries.

    The sheer cost of human resources development and the scope of investment necessary, call for co-ordination and the pooling of resources. These created institutions could then draw on the scarce expertise that can offer human resources development in new applications and share it among African countries.

    Manufacturing base

    At another level the synergies developed through African policy and regulatory co-ordination can also help in ensuring the emergence within the African continent of a manufacturing base that will address the needs for equipment in the continent.

    Television sets in the whole of the African continent number approximately 12 million. The Video Cassette Recorders (VCRs) number no more than 2 million in a continent populated by more than 700 million people. Africa's need for reception equipment is not only vast but represents a real economic opportunity.

    As new communications technologies enter and converge with broadcasting, new demands for equipment and services will follow.

    In view of the convergence of telecommunications, information technology and broadcasting, African countries have to interact with the manufacturers if the new generation of equipment will address the special needs of the African continent. The interaction between the African countries and the leading manufacturers should address issues covering such fields as design of equipment to ensure relevance, standards to ensure compatibility with other components of the broadcasting system, and pricing to ensure affordability. No single African country can influence the global manufacturing sector in these areas. Co-ordination at a continental level ensures the economies of scale that can influence decision-making.

    South Africa could play a meaningful role and together with other African countries help bring about this continental approach to challenges in the broadcasting area. In turn South Africa would benefit from such co-operation as it would open vast economic opportunities for the operators, the manufacturers and investors in this sector of the economy.

    10.1 From what basis should this strategy be developed?

    South Africa is commonly identified as a developing country. Yet certain aspects of our economy and industry are quite well developed. As a developing country South Africa can relate to other developing countries with similar economic, cultural and social contexts (such as India) to share experiences and expertise. South Africa can also gain a lot from relations with developed countries, especially in the area of new technological developments. South Africa can position itself as a leader in broadcasting in the developing world and can export a lot of technology and applications that are suitable for developing countries.

    10.2 What should the aims of this strategy be?

    • for South Africa to establish relationships with other countries and organisations that will be mutually beneficial in terms of shared experiences as well as new technological developments?
    • for South Africa to benefit economically through investments and exports?
    • for South Africa to develop a strong skills base benefiting from international exposure?
    • for South Africa to position itself as a leader in broadcasting developments in technology as well as content?
    • for South Africa to play a role in developing broadcasting in the African continent?
    • for South Africa to protect and nurture its South African cultures?

    Information Society

    10.3 What should South Africa's policy be on Information Society?

    10.4 Which elements of the Information Society and Information Economy can benefit South Africa?

    10.5 Should there be policy and regulatory positions to enable South Africa to engage with the information society and information economy?

    10.6 What should these policy and regulatory positions be?

    10.7 Which areas of human resources development in the Information Society should South Africa focus on? And why?

    10.8 What empowerment strategies should South Africa pursue at a global level?

    10.9 What strategy should South Africa adopt to preserve cultural norms?

    10.10 Are there specific broadcasting concerns in relation to the Information Society?

    10.11 What specific broadcasting policy positions need to be adopted to integrate broadcasting into the Information Society?

    Regulation

    In the past there has been discussion on an initiative to establish a forum for African regulators to get together.

    10.12 What role can such a forum play in developing a common approach to regulation, especially in the area of satellite?

    10.13 What role can such a forum play in facilitating exchange programmes and partnerships around projects?

    Local content

    In the IBA Act local content is limited to being South African originated. It can be argued that music and programming originating out of other African countries is linguistically and culturally more similar to South Africa than other foreign programming and it can contribute to the development of the African music industry.

    10.14 Should there be some way to give African content some more credit or should it be established as a separate category of content in addition to South African and other foreign content?

    Partnerships/Co-operation

    Partnerships/Co-operation can include investments in industry, joint projects in research, development, training, technology, programming exchange and production. Exchange programmes are a specific form of international co-operation, which can include technological development, human resource development, policy development and regulation.

    10.15 What policies should South Africa pursue to encourage investments joint projects, research, development and training?

    10.16 What existing policies could potentially hinder this position?

    10.17 How can South Africa use exchange programmes effectively to develop the South Africa broadcasting industry as well as regional and African broadcasting?

    10.18 Should South Africa engage in partnerships with other countries, organisations and/or companies? If so, what should the nature of such partnerships be?

    10.19 What policy positions should guide South Africa in relation to partnerships between the South Africa government and other governments, organisations and companies?

    10.20 Who should drive these partnerships at a continental level? Government or business?

    10.21 What initiatives should we support in Southern Africa to promote empowerment?

    Regional Investments

    10.22 Should the government provide support to initiatives for South Africans to invest at a regional level? If yes, what policy positions should South Africa adopt to support such initiatives at a regional level? If no, why?

    10.23 To what extent can such a strategy promote economic empowerment?

    10.24 In which areas should South African companies invest in the Southern African region? Why?

    10.25 How can South Africa play a role in developing a regional production sector that is culturally and developmentally relevant to Southern Africa (e.g. educational programmes, music industry)?

    10.26 How can the government promote the export of broadcasting technology and productions to the Southern African region?

    The roles of the different tiers of broadcasting in the regional and global strategy

    10.27 What role should the public broadcaster play at a regional level?

    10.28 What is the role of Channel Africa in achieving these policy positions?

    10.29 Is there a role for private broadcasters in achieving these policy positions?

    10.30 Is there a role for community broadcasting in achieving these policy positions?

    International policy and strategy

    10.31 What should South Africa aim to achieve at an international and regional level?

    10.32 Are there specific South African concerns in relation to intellectual property rights?

    10.33 Should signal distributors have direct access to Intelsat in the interest of fair competition?

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    Chapter 11. Financing the Broadcasting System

    A broadcasting policy framework can only be sustained if it allows for orderly growth of the broadcasting system and a capacity of the broadcasting industry to adapt to technological changes.

    Public policy must recognise that broadcasting as an industry is a capital intensive and specialised industry requiring considerable amounts of investment to establish, maintain, operate and expand. A basic point of departure in policy formulation is to ensure an orderly organisation of the broadcasting system to protect, through market structure and regulation, the considerable investment committed to establishing and maintaining the broadcasting system. Regulation in this instance is not only a set of impositions affecting the economics of the broadcasting business, but also provides market protection and a measure of certainty for the license holders. Regulation also ensures that finances support the various sectors of the system to guarantee sustainability in the interest of media diversity.

    It is of overriding importance to determine how the system will be financed. This is necessary to put policy positions into the context of what is financially possible. In this sense determining how the system will be financed is part of creating a stable environment in which the broadcasting system can thrive.

    How the system is to be financed has the final bearing on the pace of liberalisation, the re-organisation of the system to accommodate new programming entrants, the introduction and the regulations of the various new services in an expanding broadcasting system.

    An appropriate policy framework should ensure the financial stability and maintenance of all the tiers and sectors of the broadcasting system. The following elements are discussed below:

    • public broadcasting
    • private broadcasting
    • community television
    • local programming
    • signal distribution
    • multi-channel platforms.

    Public Broadcasting

    The financing of the public broadcasting component depends on the ultimate role of public broadcasters. At present, the SABC operates three channels and obtains its financing from advertising and individual license fees. If its role is to be modified - either via some form of privatisation and/or expansion into new channels (say, education/learning, all-news) - the source of its funding could well change. For example, in return for access to advertising revenues, private broadcasters might help finance the public broadcaster with contributions established as a percentage of revenues.

    Private Broadcasting

    The financing of private broadcasters is derived from advertising, subscription, and other revenues. Initially, of course, there is typically an up-front capitalisation requirement for capital expenditures, programming investment, and start-up losses. Private broadcasters can contribute to the financing indirectly as well as directly. First, the service they are delivering meets some market needs, at least, and possibly meeting public objectives as well (e.g. news, info programming; specialised programming within their programming mandate).

    Second, they would be paying for local programming in part on the back of revenues from foreign programming whose rights costs are small in comparison with the cost of making or acquiring local programming. Third, they could be contributing to the revenue stream of Sentech, and thus expanding coverage in the country. Fourth, if subscription services, they may be helping create a marketable platform for public broadcasting services. Finally, they could be contributing directly in the form of license fees, which could be directed toward a specific purpose - say a programme production fund.

    Community Broadcasting

    The financing of community broadcasting is expected to be drawn from a variety of sources. These would differ slightly for community television and radio.

    Sources of funding and programming for community broadcasting will include the following:

    • sponsors who are commercial local media (including print) that could be financing community broadcasting in part through a media development agency;
    • educational institutions and community/provincial sittings of elected officials who would both provide programming for community television;
    • volunteers who would produce community access programming with facilities provided by the stations;
    • institutional sponsors who now finance a range of programming which has no distribution channel;
    • some advertising from the more popular categories of community programming (e.g. locally hosted talk shows).

    Thus, community television envisages a range of financing, and makes a substantial public benefit contribution; if successful, it might not divert a substantial amount from the traditional sources of revenue for broadcasters (license fees, subscription revenues, and advertising).

    Programming

    Since local content is the cornerstone of broadcasting policy, it is important that the financing of programming is properly established. At present, local programming is financed through SABC revenues. However, the broadcasting system is capable of exerting far more leverage in the financing of programming. First, private broadcasters can make a stronger contribution in the future, as long as their commitments are built into their licenses and then monitored as to implementation. Second, independent producers could be encouraged to derive revenue from other markets, likely outside South Africa, and possibly through co-productions with other countries. Third, there could be a financial contribution to new programme development and production funding from signal distribution undertakings with a subscription fees base. With a more effective production industry, the quality and quantity of local content could be expanded greatly without major new public expenditures.

    Signal Distribution

    The signal distribution infrastructure also needs to be financed. The delivery of television services at present falls primarily on the Sentech operation, whose revenues are based on provisioning and maintaining terrestrial (and satellite) facilities to broadcasters. Expansion of coverage depends on capital investment, which is forthcoming to the extent that expected future revenues warrant it. There are other ways of financing capital investment, possibly through privatisation or partial privatisation. If Sentech is permitted to sell telecommunications services, perhaps on a restricted base, then the revenue base might support a higher capitalisation - and more rapid expansion of coverage.

    Multi-channel Distribution

    Multi-channel distribution platforms are part of the signal distribution infrastructure, and who provisions them depends in part on what technologies are involved. If one multi-channel path is digital terrestrial television (DTT), Sentech is a logical option. For DTH, it could be either Sentech or Orbicom. For MMDS it could be either, or even a new company. For cable, there are several possibilities, including Telkom, who might be logical candidates. The resulting revenue stream would be primarily subscription fees, and indirectly advertising placed on subscription channels carried by the multi-channel distributor. Due to the capitalisation involved, any major infrastructure initiative will need to have a relatively precise idea of the potential market take-up, the wholesale costs for the channels carried, and the pricing structure that would be approved by the regulator. What is also important is to ensure that multi-channel distribution operators are subject to carriage regulations that support the distribution of South African services, particularly public broadcasters.

    It should be acknowledged that the broadcasting industry in general is capable of generating a substantial amount of revenue and to attract a sizeable amount of foreign capital investment from the activities of its various sectors. It is an industry which, more than many others, clearly has the potential and ability to be self-sustaining and has achieved self-reliance in so many markets in the world.

    In achieving self-sufficiency, the more profitable elements could help finance the activities, which will not generate the same returns. As shown above, the contributions to the financial health of the system come in many forms. Sound management of the system means the appropriate matching of roles to performer (private enterprise, public enterprise, community broadcasting), and the level of benefits to obligations in the case of the private sector elements.

    This policy formulation framework should be premised on the ability of the broadcasting system to sustain itself. The broadcasting system is one industry and self reliance covers the various sectors and segments of the system.

    The current situation: reliance on advertising revenue

    The broadcasting system as currently constituted relies heavily on advertising revenue. All the sectors of the broadcasting system are permitted, through regulations and the Act, to collect advertising revenue.

    The number of minutes per hour each sector can advertise is regulated on an hourly and annual aggregate basis.

    The broadcasting Industry collects approximately R2 billion of advertising revenue.

    Financing the expanding broadcasting system

    There are different revenue streams, which could finance the expansion of broadcasting. This expansion should cover a signal distribution roll out, content development, new channels and services, increased local content and human resources development. The possible sources for financing the broadcasting system are:

    Private investment

    Private investment is the means to capitalise the private sector elements of the broadcasting system - TV and radio broadcasting, including subscription based services, and signal distribution infrastructure,

    In other countries, private financing has been used to facilitate the creation and distribution of programming. Once familiar with the sector and confident in its business ability, banks will provide interim financing to independent production companies. Because content is a growth industry, successful production companies can ultimately obtain working capital and expansion financing from the public equity markets.

    Advertising revenue

    As stated above, advertising revenue constitutes the bulk of revenues, which maintain the services, channels and stations. As new services emerge, there is a potential to grow the advertising revenue. Some believe that there is untapped demand in local/regional advertising, and in more successful identification and marketing to more segmented audiences. A carefully managed growth strategy should increase the overall ad pie, thus helping to finance new entrants without destroying the revenue base of existing services.

    Subscription fees

    This is the money paid by subscribers to service providers for services rendered and utilised. It may take the form of monthly subscription, or pay per view. This source of revenue is increasingly becoming important as new services segment audiences, and the delivery mechanisms allow for billing and collection. Subscription revenues will be particularly important to the development of new speciality television services that are tailored to the South African audiences, and that will provide increased opportunities for South African programming.

    Public Funds

    Receiver License Fee

    This refers to the money paid by audiences for the services delivered by the Public broadcasting system.

    This is an underdeveloped area for financing the broadcasting system. The collection system has proved inefficient. Receiver Fees constitute about 20% of the SABC Funds. Potentially, license fees could generate R1 billion, which could be approximately 80% of the SABC budget.

    Government Grants/ Project based funds

    This refers to money granted by government to supporting specific Public Broadcasting Projects. This funding system is limited to what the Fiscus can provide from an array of competing national needs.

    Tax incentive schemes

    This refers to government programmes to encourage investments from the private sector, local and foreign, into the broadcasting system. It can be to encourage investments in local content production covering new technology manufacturing, broadcasting content production and service provision. Again, however, tax incentives are another form of government expenditure and are inherently limited.

    Broadcast production investment fund

    The Department of Arts and Culture has proposed the creation of a film and video fund. A similar concept could be useful for television programming. Such a fund would be intended to stimulate the South African Human Resource capacity to produce local broadcasting content that reflects the unique values and cultural norms of the country. It would aim to stimulate the Local Content Production Sector to be self-reliant and produce internationally competitive programming. To do so, funding cannot be organised as a form of "handout". Rather, access to it would depend on obtaining other sources of revenue/investment, and in obtaining a pre-commitment from a broadcaster to license it.

    Contributions to this Fund could be from the Industry players, private investors, sponsorships, limited government grants, and earmarked license fees from multi-channel signal distributors.

    Spectrum Licence Fee

    An economic factor which sometimes has a great impact on the performance of broadcasters is a licence fee charged to broadcasters for using the frequency spectrum. Such a licence fee is often imposed for various reasons. These include :

    • Funding the regulator
    • Ensuring efficient use of the spectrum

    There are various ways of raising this licence fee:

    • Percentage of revenue, as has been done by the IBA. A disadvantage is that it would constitute an additional tax which must meet the Department of Finance's regulations;
    • Transmitter fees. This depends on whether it is UHF/VHF or FM/MW/SW, as well as audience size and value in a particular coverage area. The problem with this is difficulty in administering it.
    • Auctions, where spectrum is sold to the highest bidder, are becoming the norm in the USA and New Zealand. A disadvantage here is that regulators and policy makers have no control of who gets a broadcasting licence.

    11.1 Should licence fees be imposed in broadcasting? If so, Why?

    11.2 What should the funds be used for?

    11.3 What kind of licence fees should be imposed and Why?

    11.4 Should all broadcasters who derive commercial revenue pay licence fees?

    11.5 Should there be a differentiation between licences paid for different media such as cable, MMDS and satellite?

    11.6 How should spectrum auctions be considered if this appears to be one option for imposing a licence fee on broadcasters?

    11.7 Is there an alternative way of ensuring efficient use of the frequency spectrum without imposing licence fees or selling through auctions?

    Local programming as a public interest

    Upon licensing, many countries require broadcasting entities to commit to reinvesting a portion of revenue towards meeting Public Interest programming. License conditions can stipulate the amount of Public Interest programming that must be developed and scheduled. The stipulations can be in the form of local content quotas, possibly specified as to transmission of this content in prime time; and in the form of minimum expenditures on local programming, possibly expressed as a percentage of revenues. Such conditions are reviewed at the end of the license term to adjust them according to the performance of the licensees.

    There are many other tools that can be used to attract revenue to the Broadcasting System. Global broadcasting Revenue is estimated at R865 billion and expanding. Interaction at a global level by South African operators, producers and content providers allows the South African entities to tap into these global resources.

    One strategy is for South African broadcasters and independent producers to enter into co-productions and strategic partnerships with other international players involved in production, programme distribution, broadcasting and other areas. This strategy differs fundamentally from the current practice of simply acquiring broadcasting rights from other countries for the South African market, rather than attracting production capital from or selling into foreign markets.

    In this strategy South African operators co-produce something to be shared between South Africa and other broadcasters. The next stage of development is for South African broadcasters to leverage a presale commitment by a South African broadcaster to induce a similar presale commitment by a foreign broadcaster - thus providing sufficient up-front financing to meet the production budget without depending on the South Africa market alone. Such strategies allow the South African entities to leverage finances, skills and expertise to make them globally competitive. It can also mean larger budgets, which should mean better television programming, as well as improving the image of South Africa as a creator of cultural, information and entertainment programming.

    11.8 Considering that a series of different funding mechanisms are possible as outlined to finance the South African broadcasting above, and may be adopted system, which ones should a new policy framework encourage, and why?

    11.8.1 How should the introduction of new signal distribution technologies and new broadcasting services be funded and financed. Which of the above mechanisms should be encouraged?

    11.8.2 How should the Public Broadcasting Sector be funded and financed, given the role that is expected for Private broadcasters?

    Which of the above mechanisms should be encouraged:

    • public broadcaster to operate certain categories, e.g. learning, all-news, children's?
    • privileged carriage on multi-channel signal distribution platforms?

    11.8.3 How should the Community sector be funded and financed?

    11.8.4 What should be the appropriate contribution of the Private Sector of broadcasting? A combination of obligations and direct fees back to the broadcasting system? Which new services and signal distribution infrastructure can this sector realistically fund and finance? What has to be awarded as franchise to make them commit to such funding?

    11.8.5 How should the production of Local Content be funded and financed? Which of the above mechanisms should be encouraged? - content quotas, and expenditure minimum's should be imposed?

    11.8.6 What are appropriate regulatory measures to ensure the viability of the entire broadcasting system? Should some sectors of the broadcasting system be run along monopoly, duo-poly or competitive norms?

    11.8.7 What is the process for determining the appropriate structure in for new entrant?

    The broadcasting system is a balance between private and public sector interests. Up to this time, the private sector initiatives have not been scrutinised within the framework of such a balance. In the future, any broadcasting activity - whether broadcasting services or its distribution - should require appropriate licensing and scrutiny to determine whether their contributions are in line with the benefits they gain from the business opportunities acquired through the access to the broadcasting system.

    Funding the Broadcasting regulator

    The issue of funding the broadcasting system also raises questions on how the broadcasting regulator, in this case the IBA, should be funded. The question of how the regulator derives its sources of funding, ultimately has a bearing on its independence and accountability to democratic institutions.

    11.9 How should the regulator be funded to ensure independent and efficient licensing and regulatory operations?

    11.10 What would constitute a realistic budget allocation for a regulator considering South Africa's GDP per capita, size of the radio and television market, the ability of government and broadcasting services to provide funding?

    Media Development Agency

    Finally, another option to consider, regarding the financing of the broadcasting system in South Africa, is the creation of a Media Development Agency. Such an agency would operate like other statutory institutions such as the Human Rights Commission and the gender Commission.

    Its duty would be to encourage and promote media diversity. To be able to do so, it may need statutory powers to oppose, propose or support policy, regulation and legislation around issues on media diversity. Its brief would include the following :

    • issues of ownership and control of South African media;
    • empowerment of historically marginalised groups;
    • accessibility and availability of media; and
    • promoting issues regarded as being of South African interest.

    To realise its mandate, the Agency would seek to provide funding and support to all forms of media that are either community, public, private or of marginalised communities that are able to demonstrate through their operation that they are contributing towards this vision.

    In addition, the Agency would seek to build capacity and develop sustainable strategies. All funding requests aimed at running costs will have to be motivated for in relation to the applicants' capacity building programme. Beneficiaries, would include the community sector, the public broadcaster, private broadcasters from black empowerment groups as well as minority or alternative voices that are in the public interest

    Funding for the Agency could be derived from a variety of sources:

    • percentage of the Adspend;
    • percentage of the profits of the commercial media;
    • State expenditure on media channelled through to projects;
    • State subsidisation and funding at various different levels, provincial or local government;
    • Government grants to the public broadcaster;
    • Foreign funding/donors
    • Interest from loans granted to commercial black empowerment operators; and
    • Income-generating activities

    11.11 Resources to deserving broadcasting services? If so, How will this Agency relate to other state Is there a need for a statutory Agency to promote media diversity through the allocation of institutions such as the IBA and the Ministry and Department of Communication?

    11.12 How should such an Agency be structured?

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    Glossary of terms

    AM: Amplitude modulation. Used for radio broadcasts, usually in the MW and SW bands.

    Barriers to Entry: Are legal or natural impediments protecting a firm from competition by potential new entrants.

    C-band: The frequency band from 4-6 Ghz, used mainly for distribution of television signals to terrestrial relay transmitters.

    DTH: Direct to home

    Deregulation: When a highly regulated broadcasting environment is reassessed and a number of rules and regulations are reduced, making it easier for interest groups other than the state to participate, own and control a broadcasting station.

    Duopoly: A special type of Oligopoly. It is a market in which there are two producers of a commodity competing with each other; e.g. SABC vs M-NET

    Economics of Scale: Occurs when a single producer can supply the entire market at an average total cost of productions that is lower than what can be achieved by two or more firms; e.g. Eskom, Telkom

    Economics of Scope: Occur when there is a decrease in average total cost made possible by increasing the number of different goods produced

    Encryption: A mechanism for changing the broadcast signal in a systematic way so that the picture would be unintelligible without a suitable decoder. The procedure is highly mathematical and very secure. Encryption usually infers a higher degree of security than "scrambling", which is a simple rearrangement of parts of the signal according to some simple formula and it's therefore less secure.

    Free-to-air: Broadcasts that can be received without the necessity for any encrypting process.

    FM: Frequency modulation. Used for radio transmissions usually in the VHF bands. Produces good fidelity.

    Foot Print: The area of the earth's surface in which a particular satellite signal can be received.

    Grandfather Clause: A clause ensuring that the existing rights of present broadcasters are carried over and continued in a new regulatory dispensation.

    ITU: International Telecommunications Union based in Geneva, Switzerland. Assigns frequency spectrum to different parts of the world through the International Frequency Registration Board.

    Ku-band: The frequency band form 11-14 Ghz, intended for direct-to-home satellite television broadcast.

    Legal Monopoly: Occurs when a law, license, or patent restricts competition by preventing entry

    Local Content: Television programmes which are identifiably South African, recognize the diversity of all cultural backgrounds in South African society, are developed for South African audiences and are produced under South African creative control.

    IBA: Independent Broadcasting Authority

    M-NET: Electronic Media Network; an encoded subscription television service in South Africa owned by a company listed on the Johannesburg Stock Exchange, founded by a consortium of six newspaper groups.

    MW: Medium Wave (band): radio frequencies between 300and 3000khz.

    Monopoly: Is an industry in which there is one supplier of a good, service or resource that has no close substitutes and in which there is a barrier of entry to new firms.

    Monopolistic Competition: Is a market type in which a large number of firms compete with each other by making similar but slightly different products; e.g. Radio Stations.

    Natural Monopoly: Occurs when there is a unique source of supply of a raw material or when economics of scale enable one firm to supply the entire market at a lower price than two or more firms can, e.g. De Beers control of 4/5 of the world's diamond mines.

    Oligopoly: Is a market type in which a small number of producers compete with each other

    Product Differentiation: Making a product slightly different from the product of a competing firm.

    SW: Short Wave. A section of the electromagnetic frequency spectrum between 3 and 30 MHZ. Used for long distance radio communications since the signals are reflected from the ionosphere. Also as the high frequency range.

    Terrestrial: A term used to distinguish broadcasting from transmitters situated on the earth's surface from satellite (celestial)

    Perfect Competition: Occurs in markets where there are many firms, each selling an identical product; there are many buyers; there are no restrictions into the industry; firms already in the industry have no advantage over potential new entrants; firms and buyers are completely informed about the prices of the products of each firm in the industry; no single firm can exert a significant influence on the market price of goods.

    PBS: Public broadcasting service-a service, which seeks to cater for all audiences, all tastes, in society irrespective of geographic location, class and cultural background. It relies for finance on license fees or state subsidy, which allows it to provide programmes, which are of public benefit but are not necessarily commercially profitable.

    RDP: Reconstruction and development programme

    Windows: A technique whereby a broadcast from another place is slotted into a transmission from the principal source of the transmission

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