Broadcasting Amendment Bill: briefing

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LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
30 October 2002
BROADCASTING AMENDMENT BILL: BRIEFING


Chairperson: Ms C Nkuna (ANC) [Limpopo]

Relevant Documents
Presentation on Broadcasting Amendment Bill
Broadcasting Amendment Bill B34B-2002

SUMMARY
The Department of Communications provided a clause-by-clause explanation of the Bill, and focused on the content and enforcement of the SABC Charter under Clause 6, the conversion of the SABC into an "Ltd company" under Clause 9 and the funding of the Regional Television Services (RTS) in Clause 18.

During the discussion, issues raised by committee members were the rationale for control of the SABC broadcasting policies in a democratic environment as under Clause 6, whether the Bill ensures multi-lingualism as an important nation-building tool and whether the SABC should be able to impose a levy on advertising in order to generate additional revenue. Members also sought clarity as to whether the RTS can also generate revenue from licence fees, and if the two divisions of the SABC would have to operate in accordance with corporate governance principles.

MINUTES
Briefing on Broadcasting Amendment Bill
Mr Joe Mjwara, Deputy Director General: Broadcast Policy in the Department of Communications, informed Members that a public participation process was engaged in 1998 and the Bill is the result of the input received from that process, which recognises the rights enshrined in the Constitution. The presentation will provide Members with a clause-by-clause breakdown of the Bill in broad principle, with special focus being placed on the proposed amendments to Section 6, 27 and 30 to 32. He made the following additional comments:

Clause 1
This section of the Broadcasting Act of 1999 (the Act) provides that certain definitions have been included in the Bill such as "dealer", "lessor" and "use", and also states that certain terms have been clarified.

Clause 3
This amendment aims to give recognition to the religious practices of South Africans in the SABC's broadcasting policy.

Clause 4
The Bill addresses the current problem with those operators who are currently providing a broadcast service without a valid licence, with the result that a lacuna has been created which has to be resolved.

Clause 5
This amendment is aimed at accommodating any future technological developments that may occur in the broadcasting field.

Clause 6
This relates to public broadcasting services and most of the public submissions received on the Bill focused on this issue, because it did not clearly state whether all the provisions relating to the SABC were part of its Charter. Amendments have now been effected to Sections 6 and 8 of the Act to make those refer to the Charter.

Most of the public debate on this clause was a result of it being interpreted to mean that the government would be taking away the independence of the SABC. Yet the provision actually protects and enshrines this independence by incorporating it into the Charter, so that it all reads coherently. Section 6 now provides that ICASA must monitor the SABC broadcasting policy and ensure compliance with it, and the clause also provides checks and balances of the rights of the SABC as the public broadcaster with those of South African citizens "as enshrined in the Constitution". The SABC is also required to develop South African programming in South African languages, and it is thus mandated to perform this function.

The SABC has to devise new policies to give expression to its new mandate and these policies have to be submitted to ICASA to check for compliance with its Charter, Code of Conduct, enabling legislation and licence conditions. The SABC is also mandated to consider public opinion on these policies.

The present formulation of Section 6 in the Bill captures all the input received during the public hearings and deliberations stages of the Portfolio Committee on Communications (the Portfolio Committee) and ensures that "South Africa is a winner", because everyone's inherent rights have been included and protected in the legislation.

Clause 8
This amendment indicates that the Bill recognises the need to be more specific in this area because four million South Africans are presently living with disabilities, and the Bill now incorporates their needs as well.

Clause 9
The proposed Section 8A was included in the Bill to convert the current SABC from a statutory body to "an Ltd company", and the Minister of Communications (the Minister) is now authorised to deem the conversion, so that the process can move quickly and smoothly. This deeming provision is also aimed at closing the loophole regarding the status of the rights and obligations of the SABC employees, and currently provides that the employees of the old SABC would continue their employment in the same capacity as before the conversion, because the old and new SABC is the same thing.

Clause 10
This amendment makes it clear that the new SABC will not consist of two separate companies, but will instead remain a single company and will be split into two divisions: public services and commercial services.

Clause 11
The business plan has to be developed so that the SABC "does not fly blind" as the needs of the public will be effected, and this requirement will also allow for better planning.

Clause 12
This amendment contains the same requirements as Section 10, with the only difference being that it relates to the commercial division of the SABC.

Clause 13
Provision is now made for the CEO to be a member of the SABC board as well, to change the position under the 1999 dispensation.

Clause 14
This amendment is aimed at ensuring that the old SABC board operates in the same manner as the new board.

Clause 15
This provision amends the current provision in the Act which states that the committee may consist of "not more than seven members" by now increasing that number to no more than fourteen members, because the board itself contended that it has too few members to properly oversee the functioning of the SABC.

Clause 17
This amendment provides for the current SABC licences to merely be amended to reflect the conversion of the SABC.

Clause 21
This amendment notes that the transfer of SABC staff from the old to the new corporation is deemed to have taken place, and thus actual transfer is no longer necessary.

Clause 22
This amendment is aimed at ensuring compliance with the provisions of the legislation.

Clause 25
This amendment indicates that concern was raised that this provision could create a barrier to those wishing to enter the broadcasting industry by protecting those already established in the market, as this would have a detrimental effect. Instead ICASA now ensures that this does not occur by itself conducting the inquiry, and provides the process to be followed in applying for the subscription television service licence via Sections 49 and 50 of the Act. ICASA may now conduct the inquiry into the provision of a multi-channel bouquet, and to submit its recommendations to the Minister for tabling to Parliament.

Clause 27
These amendments provide that the requirement that ICASA conduct the inquiry be deleted, because this matter is already covered in the proposed amendment to Section 31 of the Act.

Discussion
The Chair stated that the presentation was clear and well presented, and invited Members to ask questions of clarification to the delegation from the Department of Communications (the Department). She stated that "the vibes on the ground" made the Bill out to appear notorious.

Mr L Lever (DP) [North-West] stated that in the past when broadcasting was analogue-based broadcast service providers were restricted to a small number of channels, and this was thus the rationale behind the licencing of broadcasting. It is well known that this measure was then also used to control SABC, which then became a monopoly. Yet now the number of channels is no longer limited and a valid argument can be made that the need for such control has fallen away in this open and democratic society, and what could now be the underlying rationale for control? Could it merely be "control for control's sake"?

Mr Mjwara responded that the issue of control has been the most debated topic in this Bill, as well as the rationale for public intervention in a technology-based system. Regulation was imposed dealing with technical capacity, and the very need for imposing regulation in the first place was discussed. If one departs from the notion that regulation is needed because technological capacity is limited, this can notionally be expanded to mean that it could be used to enforce technological capacity. In the broadcasting industry regulation means much more than merely distributing frequencies, and Section 192 of the Constitution is vital as it creates ICASA which is mandated to regulate the sector in the public interest.

Within this framework broadcasting channels have to be looked at as vehicles to be used to achieve all these objectives, and this is important because it is unlikely that the sector itself will do al this voluntarily. Thus it has to be ensured that all the objectives are distributed throughout the sector equitably, and there is therefore a need for regulation to achieve a society and economy in which all contribute and compete equally.

Furthermore, the more technical changes that need to be effected the greater the need to intervene, and thus regulation is necessary to ensure viability and to govern technology to ensure public access to these services. The advancement of technology cannot replace regulation.

Secondly, Mr Lever stated that the underlying reason for the public broadcaster is the provision of a public service, and one of the important aspects of this service is its effect on nation-building. One of the cardinal requirements is developing a multi-lingualism amongst all communities, but contended that he does not see the channels promoting multi-lingualism.

Mr Mjwara replied that he interprets multi-lingualism to mean the development of languages other than one's own home language, and assured Mr Lever that this is being provided for in the Bill. Yet the first step which has to be fulfilled is that of exposing South Africans to other South African languages, but the problem here is that all cannot be accommodated, and thus the public has to be informed and educated. Yet the law does not go so far as to expressly state that multi-lingualism has to be ensured, but some South African languages will be included.

Thirdly, Mr Lever referred to the issue of television licences and stated that he understands that a source of revenue is needed, but the costs involved collecting this revenue seems to be counter-productive and the system is not self-sufficient. It is not certain whether a study has been conducted locally to identify whether this would benefit the public broadcaster, because currently a large section of the public does not pay its licence fees. How does the Bill aim to deal with this? Perhaps the SABC could be allowed to impose a levy on advertising?

Mr Mjwara responded that this matter was also thoroughly discussed during the Portfolio Committee deliberations, and currently only 46% of all South African households pay their television licence fees regularly and the remainder have to be sorted out. Inspectors will be tasked with addressing this problem. A considerable amount of research has been conducted in this area, and it has been discovered that 20% of the offending 56% simply do not have the necessary funds to pay their television licence fees because their monthly income falls below the breadline. These citizens have to be treated differently to those who can afford but simply do not pay for their television licences because they want to flaunt the law, and are presently getting away with it.

There is therefore a need to improve collection mechanisms, but the cost of collecting these licence fees is not near to being equivalent to the revenue it would generate. This matter will be returned to in the future, but efforts are still currently being focused on households. There has to be value in the quality of the public broadcasting service provided that it recognised by citizens and compels them to pay for their television licences. All involved are happy to improve the standard of broadcasting.

Fourthly, Item 2 in the Schedule to the Bill establishes a Broadcasting Monitoring and Complaints Committee, and will this Committee take away any of the rights of citizens guaranteed in the law itself? For example, should a citizen allege that s/he has been defamed, would that person then first have to present the case to this Committee and then to the courts?

Mr Mjwara responded that that this does not preclude any action that can currently be taken by the citizen. The original provision in the Act states that function would be performed by ICASA, but it was felt that it is unnecessary to place it with ICASA when the industry can perform this function itself.

Mr Lever contended that because this is the new South Africa it is important not only to obligate the public broadcaster to ensure multi-lingualism, but also to provide language courses for beginners. This would open the door of opportunity and the public broadcaster has to take it upon itself, or this Committee could also take the lead here, and provide this in the interests of nation-building.

The Chair stated that this Committee will follow-up on matter, because there seems to be a greater exposure to foreign languages on South African airwaves while most South Africans do not even know their own indigenous languages. This has to addressed, especially by this Committee as leaders in the legislature.

Mr T Taabe (ANC) [Mpumalanga] referred to the Regional Television Services (RTS) and stated that the point has been made that these services would be funded "by money appropriated from Parliament and may draw revenues from grants, donations and sponsorship". Should licence fees not also be included here as a means of generating revenue?

Mr Mjwara responded that this matter was discussed at length by the Portfolio Committee, and it has to be appreciated that if the SABC currently collects R400m from television licence fees this would not be sufficient. Instead the SABC should be generating between R900m and R1b in television licence revenue, and unless it is able to expand its current base of paying customers, the revenue it generates from television licences will not be sufficient to even cover its own operating and administrative costs. The Bill does not require the SABC do perform additional functions with the limited funds it has available, but instead separates the funding of the RTS from the SABC and thus excludes funds generated from television licence fees from the Bill. Once the SABC becomes more efficient and it has sufficiently expanded it base of paying customers, then the matter of including licence fees as a funding source for RTS can be discussed further.

Secondly, Mr Taabe referred to the separation of the SABC into two operational divisions and stated that the point was made that all the relevant provisions of the PFMA will apply to these divisions to ensure greater openness, transparency and accountability with regard to the manner in which public money is spent. Yet with regard to the commercial division will become a corporate entity, and would it not then be appropriate to have at least some reflection of corporate governance rules and principles in that division, such as a corporate governance charter?

Mr Mjwara replied that the Bill does provide for these services to operate in accordance with its Memorandum and Articles of Association, and these include means for corporate governance. A corporate governance charter will be outlined in those documents, and the issue of shareholder competency is currently being discussed with the SABC.

The Chair referred to the clause dealing with the deemed conversion of the SABC and asked whether any mechanisms have been put in place to assist those transferred to meet the circumstances, such as organising their mindsets?

Mr Mjwara responded that a lengthy study was conducted on the measures to be put in place to identify the status of the SABC now before it is converted, and these include the requirement that the SABC submit a due diligence report regarding its obligations. The aim of these measures is to prevent the transfer of something which is not transferable into a transferable environment. Furthermore, the SABC's obligations to its employees, third parties, shareholders and its partners must be dealt with before the conversion, so that the "deemed conversion" is not used to hide anything.

Mr Lever suggested that one of the probable reasons for the conversion of the SABC into an "Ltd company" could be because it plans to "substantially privatise" in future. This raises an interesting question with regard to television licence fees and the effect on the mandate of the public broadcaster, because the new owner could decide that s/he could no longer be bothered with the collecting of licence fees and fulfilling the public mandate of the SABC.

Mr Mjwara replied that there is no intention to privatise any parts of the SABC, and any provisions which may have lent themselves to this interpretation have been amended to reflect the actual intention. Both the commercial and public divisions are still contained in a single SABC, and for this reason it was decided that the use of the term "entities" to refer to the two divisions would be removed because it could be interpreted to mean that these two divisions would no longer form part of the SABC.

Furthermore, the splitting of the SABC into two separate divisions is a reflection of the manner in which the broadcasting system is developing in South Africa, and this is also aimed at preventing a monopoly and unfair competition in the industry.

The Chair informed Members that the Committee will be meeting on 6 November for a clause-by-clause analysis of the Bill with the Department, and the Bill will then be debated on 14 November.

Mr Taabe thanked the delegation from the Department for the comprehensive presentation, and stated that it has assisted Members in their understanding of the Bill.

There were no further questions or comments and the meeting was adjourned.

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