Namec slams MultiChoice's 'blatant abuse of power', disguised 'State Capture' over allegations of trying to influence SA's digital TV encryption policy; will report MultiChoice to Competition Commission.

The National Association for Manufacturers in Electronic Components (Namec) has slammed Naspers' pay-TV operator MultiChoice over its "blatant abuse of power", accusing MultiChoice of being involved in disguised State Capture over allegations of undue influence to change the South African government's policy on digital TV encryption for set-topboxes (STBs).

At issue is whether the media conglom's lucrative pay-TV unit is or was involved in undue pressure to get the controversial Gupta family through their ANN7 channel, and the SABC, to exercise pressure in return for getting their TV news channels carried on MultiChoice's DStv satellite pay-TV platform.

Explosive, leaked meeting transcripts between MultiChoice and the South African public broadcaster the SABC, as well as #GuptaLeaks contracts between MultiChoice and the controversial ANN7 D(Stv 405) channel showing massive payments from DStv to the Guptas, have raised multiple serious questions over corporate impropriety.

MultiChoice told the SABC it would pay the broadcaster R100 million for the SABC News channel but but only on the strict must-have contract clause condition that the SABC must support MultiChoice's stance on conditional access (CA) for digital television.

MultiChoice also dramatically upped its payments from R50 million per year to R100 million per year and then R141 million per year, as well as a questionable, additional R25 million payment to the Guptas for the low-rated, bad quality, mistake-filled and often criticised ANN7.

MultiChoice is paying ANN7 more despite its barely there low ratings than eNCA (DStv 403) that has more than 50% of the overall TV news audience share.

It's all created the perception that MultiChoice has paid kickbacks to both the SABC and ANN7 to use its influence to get set-top box (STB) encryption dropped from government-subsidised STBs in the switch to digital terrestrial television (DTT).

MultiChoice and Naspers have denied the kickbacks allegations.

Namec lobbied for encryption for the 5 million government-sponsored STB, a policy that was adopted but then suddenly overturned, with these subsidised set-top boxes, filling South African Post Office warehouses, currently not containing any conditional access (CA) system.

Namec says it will report MultiChoice to the Competition Commission for its alleged anti-competitive conduct.

Namec in a statement says "we have learned, with chagrin, revelations that MultiChoice – a monopoly in the pay-television space – got the then minister to unlawfully prevail over the state president to delegate powers that led to her pronouncing and implementing a policy on non-encryption that was to the benefit of MultiChoice".

"This misdemeanour is a blatant abuse of power, at best, and a disguised form of state capture, at worst, and there must be consequences for those implicated."

"Given a myriad of opportunities that include bridging the digital gap by opening access to more people and the economic spin-offs that digital migration offers, it is criminal that the corrupt and greedy have seen it best that our country miss the digital migration deadline as set by the ITU and, in the process, not only compromise our country's public standing, but also the financial well-being of emerging black electronic components manufacturers."

"Our members suffered not only prejudice, but huge financial losses that they have not recovered from."

"Namec calls for the upcoming ANC national conference to set tight timelines on the rapid roll-out of digital terrestrial television (DTT)."

"Implemented properly, DTT can be a lever for radical economic transformation as it will allow our country to increase the number of channels currently available and this will provide new broadcasting entrants endless opportunities to play in the mainstream of our country's economy."

Industry hits back over government's false encryption claims over digital terrestrial television (DTT); says Yunis Carrim is distorting facts.

The National Association of Manufacturers in Electronic Components (Namec) is furious over what it calls the distortion of facts and the minister of communications, Yunus Carrim's attempt to rewrite history when it comes to the aggressive push by the South African government to force encryption into free-to-air, public set-top boxes (STBs) for digital terrestrial television (DTT).

Namec says if the government forces an encryption system into STBs - a plan which it says "has no merit", it will "punish the emerging local electronics industry, the local film industry and community television".

In a statement Keith Thabo, the president of Namec, which is against the government's policy and push to include encryption in STBs - says that Yunis Carrim "in his rush to push through a new framework for the digital migration of South Africa, he has resorted to rewriting history, distorting the facts, and again pretend that the views of the black electronic sector do not matter".

Besides Namec, the majority of South Africa's broadcasters like the SABC, all community TV stations, M-Net, MultiChoice and civil society organisations are all against the inclusion of an encryption system in STBs for free-to-air television.

Yet minister Yunis Carrim wants to include it to enable job creation. It will mean higher prices for the consumer and TV viewer forced to buy these boxes to keep watching television, make the operation more complex for consumers unfamiliar with the technology, and create an artificial manufacturing protection "bubble" for lucky recipients of STB manufacturing tenders worth millions of rands.

"The minister can insult us, try to deny us our voice, and try to lock us out of future business. But he cannot ignore history, or the truth about encrypted digital migration," says Namec.

"A multi-stakeholder workshop was held on 16 April 2013 to discuss whether or not encrypted set-top boxes were the best option for South Africa. That workshop took a resolution that the requirement for STB control/encryption should be scrapped from government policy in its entirety," says Keith Thabo.

"The resolution was jointly signed by Namec, the MK Military Veterans' Association, the Progressive Women's Movement of South Africa, the Congress of Traditional Leaders (Contralesa), the SA National Civic Organisation (Sanco), the Black Business Council and many other organisations."

"This resolution was submitted to the minister and the Department of Communications, and in the Budget Vote of 21 May 2013 the minister said: “We have taken a decision to review the policy on the STB control system as one way of fast tracking the rollout of Digital Terrestrial Television (DTT) to make this system non-mandatory."

"However, when minister Yunis Carrim was appointed he embarked upon a process, which completely disregarded all that had been pronounced upon by government in the past - and decided to bring back STB control/encryption in the draft policy."

"It is incorrect, therefore, for the minister to now pretend that he is merely implementing a cabinet decision from 2008. By doing this, the minister is trying to make the entire cabinet culpable for a decision, which he alone has taken."

Namec says the government tries to create the impression of a trend towards encryption in digital migration in other parts of Africa, in particular in Tanzania, Namibia and Malawi.

"The truth is as follows: In Tanzania, the regulatory authority has mandated a common interface slot in its specification and has not mandated STB control/encryption in all set top boxes. Broadcasters, which have pay TV ambitions, have deployed their own set top boxes, at their own cost, which have their own encryption system. They have certainly not benefited from any government subsidies."

"In Namibia, the regulator published its specifications in a government gazette dated 6 December 2013 rejecting the inclusion of encryption, and specifically states in the specification section: “Conditional Access: No Conditional Access Module to be embedded".

"Malawi has so far not pronounced anything with regard to STB control/encryption".

"It is therefore again a misrepresentation and dishonesty to claim that these countries have adopted the same option that is being put forward by the minister".

"Throughout this debate we have kept asking ourselves one question: 'Why does Minister Carrim insist on encryption, when it is clear it is unnecessary - what is at stake here?" asks Keith Thabo.

Namec says it is a matter of record that there are government officials among those who submitted proposals for the last round of Requests For Proposals (RFPs) for set-top boxes, in 2012.

"Those same officials will no doubt want to respond to the next round of RFPs – so they clearly have a vested interest in the final specifications that are chosen by government now, before the minister's term ends."

"It would be very easy for these officials to want to influence the final policy decision, in whatever underhand way, so that it favours their chances when the specifications are finally issued."

"Perhaps this is why they are pushing the minister so hard, and advising him so firmly, on one particular system of encryption?" says Namec.

BREAKING. South Africa's TV industry begs government and minister Yunus Carrim to launch digital public TV and without encryption.

South Africa's community TV stations, the satellite pay-TV platform MultiChoice and The National Association of Manufacturers in Electronic Components (Namec) in a joint open letter to the South African government is begging the minister of communications and the department of communications to please urgently launch and start "free, unencrypted digital terrestrial television (DDT)" in South Africa "without any further delay".

South Africa's switch from analogue to digital terrestrial television, a process known as digital migration has been delayed for years and is vastly behind schedule; the country has been passed by almost all African countries including Rwanda and Zimbabwe and South Africa has become the laughing stock of the African continent as far as digital public television is concerned.

The Association of Community Television South Africa (Act-SA), MultiChoice and Namec who are also supported by the SABC and the Black Business Council (BBC) in their stance on DTT, want DTT to be launched in South Africa and without the inclusion of a Conditional Access (CA) system.

They say that a CA system - basically an encryption system built into set top boxes (STBs) which South Africans will have to buy - are unnecessary for open, public broadcasting.

They say it will make STBs more expensive, more complex and will lock South Africa into a digital TV system from which the country will never be able to escape.

The group says a Conditional Access (CA) in a STB for public broadcasting and free-to-air TV channels "has been almost universally rejected internationally, it will make the migration process more expensive and it is opposed by most South African broadcasters".

The group is begging Yunis Carrim, the minister of communications to start DTT and not to allow the inclusion of a CA system which will be detrimental to public broadcasting in South Africa, bad to the poorest TV households in South Africa, with a CA system which will only "advance narrow commercial interests".

The ongoing DTT delay and the highly-contentious and controversial in-fighting over CA inclusion or not in STBs is the latest stumbling block hampering South Africa's digital television migration.

Previously the South African government suddenly wanted to change the best, and agreed upon, digital broadcasting standard before finally confirming DBV-T2 and the broadcasting regulator the Independent Communications Authority of South Africa (Icasa) kept changing and re-issuing digital TV regulations over and over with vastly changed specifications.

The government disbanded the Digital Broadcasting Advisory Board (DBAB) or Digital Dzonga advisory board twice and then scrapped it.

Here is the open letter to the South African government and minister Yunis Carrim from the highly concerned group within South Africa's TV industry:

Dear Minister Carrim

For some time now, we have been involved in discussions with you and other stakeholders around your policy which seeks to regulate the migration of TV services from the current analogue broadcast system to digital.

Digital migration marks an exciting new phase in broadcasting (with great opportunities) and will have far reaching consequences for consumers, Government and broadcasters. The major impact will be on South African consumers.

Nearly 8 million analogue TV households will need a set-top box (“STB”) to allow older TV sets to receive the new digital signals.

Your position is that set-top boxes must include technology which is unnecessary and expensive, specifically encryption technology which is used to control access to TV services. 

We have serious reservations about this – it has been almost universally rejected internationally, it will make the migration process more expensive and it is opposed by most South African broadcasters.

Including this technology in every free-to-air STB will:
1. Harm consumers by raising the cost of digital migration and binding consumers to an STB forever; Over time all TV sets will be digital, which in other countries do not need set-top boxes. However, if the current proposals are implemented, in South Africa (almost alone in the world) even consumers with digital TV sets will be forced to buy a completely unnecessary set-top box, because the free TV signal will be encrypted.
2. Harm free-to-air broadcasting by increasing the cost of free-to-air television for broadcasters;
3. Disadvantage emerging black manufacturers;
4. Increase the costs of migration for Government, which has already committed itself to subsidizing STBs for the poorest 5 million TV households. Unlike in other countries, this need to subsidise will continue forever because free TV signals will be encrypted here; and
5. Make the migration process complex and result in further delays.
We dispute this aspect of your policy and believe the costs greatly outweigh any supposed benefits.
Your current proposals advance certain narrow commercial interests – rather than being in the interests of our nation.

We appeal to you to allow free, unencrypted digital terrestrial television to launch without any further delay.