Broadcasting Bill: public hearings

Documents handed out
Kagiso Trust (Appendix 1)
Independent Broadcasting Authority (Appendix 2)
National Association of Broadcasters (Appendix 3)

SUMMARY
Submissions were heard from Kagiso Trust, the Independent Broadcasting Authority and the National Association of Broadcasters.

There appears to be consensus amongst stakeholders that the definition of broadcasting needs to be broadened; growth and diversity of the industry need to be seriously considered; there is a lack of clarity in Section 27 (Objectives of commercial broadcasting services). Concerns were also raised about the impact of licencing on broadcasting coverage; concern that the present Bill would deny future public participation in the legislative process; lack of clarity on the role and balance of power between the IBA and SABC; the question of the Frequency Spectrum Directorate and the role of the IBA as regulator as well as the ambiguity surrounding community of interest and geographical community with regard to community radio stations.

DETAILED MINUTES
The committee continued with the questioning of the representative who had presented Multi-Choice’s submission the previous day.

Questions by committee members:
Mr D Marsh (ANC) asked what is the meaning of heavy handed regulation. Further how should South Africa broadcasting industries be licensed?

Response: Heavy handed regulation requires multi-layers of licensing. A model that minimizes levels of programming and avoids multi-levels of licence requirements as well as reducing administration avoids administrative bureaucracy. Examples of this model are found in the USA, Britain and Canada.

South Africa should seek to contextualise the approaches of international countries such as the United Kingdom which operates on the basis of a registration system without any regulation barriers. A less intrusive arrangement is necessary for such an enterprise as Multi-choice which has the potential of propelling growth and development into other African nations.

Mr D Swanepoel (NP) asked what is a less intrusive arrangement as well as what is a suitable model for South Africa?

Response: A less intrusive arrangement is a class arrangement or class license as opposed to individual licensing of companies. A company is automatically authorized to operate if the company in question complies with the broadcasting regulation. This approach permits individual companies with or without licences into operation. All that is required is registration for admission.

The best structure for South Africa is a simple system that minimizes paper work. Perhaps adapting certain aspects of the European model. Individual licensing for example is not applicable in places like Europe, Canada and USA.

Kagiso Media
The submission was presented by Kagiso Media's Executive Director, Mr A Harber. He highlighted two general areas of concern relating to commercial broadcasting services in the Bill. They are:
Matters relating to the stability and growth of the public commercial broadcasting services.
Finding the right balance between social aspirations and market forces.

He highlighted section 27 of the Bill which deals with commercial broadcasters as lacking clear direction - it is not certain to whom the obligation stated in the Bill refers: IBA, existing broadcasters or new licensees.

Particular areas of concern in relation to the Bill include:
Lack of clarity on the existence of coverage and its impact on licencing.
Lack of recognition for commercial broadcasters for their role and contribution to human resource development.
Lack of recognition for its emphasis on local content.
The failure of the Bill to provide for public participation in policy development.

Submissions from the other organisations (see submissions for input) were heard one after the other before questions were put to the presenters of the submissions.

Questions by committee members:
Ms D Smuts (DP) wanted to know why there is conflict between the Bills (IBA and all three bodies) as well as contradiction within different sections of the Bill"?

This was answered by Mr D Marsh (ANC) who said that there are no contradictions within different section of the Bill. What you see as contradictions is misinterpretation of the law. This Bill complements preceding bills.

Mr D Swanepoel (NP) asked how would the definition of Community Radio Stations within the Bill account for community stations that go beyond geographical areas?

The response of the IBA Chairperson, Ms F Sekha, on Community of interest was that they welcome the Bill and acknowledge the ways it has sought to deal with the issue. They do not believe that community of interest should be abolished. There is a need for further categorization of community stations and a further inquiry into the nature of community stations. Such inquiry must be directed not just towards community radio but also toward ascertaining the distinctions that exist within religious broadcasters. However, the licensing processes would continue. The Bill is not going to affect the process of granting license in any way.

Mr G Mohlamonyane (ANC) asked if the Frequency Spectrum Directorate would take over the regulatory role from the IBA?

The Chairperson of IBA replied that the issue of whether or not the Frequency Spectrum Directorate would take over the role of regulator is not given enough consideration within the Broadcasting Bill. The work of regulation would not be done by the Frequency Spectrum Directorate. Rather its role would be that of a carrying out the assignment of operators.
The National Broadcasters Association's Technical Director said that the operation of the Frequency Spectrum Directorate would not interfere with the work of the regulator, the IBA.

Mr D Marsh asked how does one ensure that communities exercise their media right?
In response Ms Smuts D (DP) pointed out that media right is not a constitutional right.

Mr D Swanepoel asked what is the possibility of commercializing religious stations?
Mr N Kekana (ANC) asked how to address the overlap that exists within public interest groups?

The Chairperson of IBA said that the issue of commercialization would be considered in further inquiry, but there is room for religious broadcasters who want to go commercial. The SABC needs to be regulated just like any other broadcaster. We as IBA find it difficult to leave SABC unregulated. It is an unfair operation within the industry. IBA calls for a leveling of the field. It is a more of question of power: who is more powerful? The Bill needs to clarify this very issue.

Appendix 1: Kagiso Media

Kagiso Media

KAGISO MEDIA

SUBMISSION ON THE WHITE PAPER ON BROADCASTING POLICY AND THE BROADCASTING BILL 1998

1. INTRODUCTION

Kagiso Media is both a child of and a leading player in the new broadcasting environment. It was borne out of an empowerment consortium which won two of the privatised SABC licences in 1996. This broadcasting base is being used to build a significant new media group, with particular focus on broadcasting. Now with interests in two large and two small radio stations, Kagiso Media has become the country's leading radio group. It also has interests in the print media.

Kagiso Media is a publicly listed company, ultimately controlled by the Kagiso Trust (KT), via its investment arm, Kagiso Trust Investments. KT is the country's biggest development agency, ploughing the proceeds of its investment back into the communities it serves.

2. CURRENT ENVIRONMENT

The current broadcasting environment consists of a range of community, private and public sound broadcasting services. the public broadcaster's sound and television broadcasting services, MNet's two encrypted channels, the new private television broadcaster and some satellite services, one of which is unlicensed. All these categories of broadcasters are governed by the Independent Broadcasting Authority Act (Act 153 of 1993) ("the Act"), their individual licence conditions and the regulations relating to fees, music and local content.

The framework created by the Act, the relevant policy position papers, the regulations and licence conditions establishes an area of certainty which allows broadcasters to plan their businesses and to make strategic decisions about positioning their business in relation to the competition. The current position is that all broadcasters are aware of the rules and the conditions of entry of new players.

The sound broadcasting market is highly competitive; as regulations carry cost implications, it is always necessary to examine carefully the effects of new policies and regulations prior to their implementation.

In particular at this time new commercial radio stations are just finding their feet, as are many community stations. The advertising pie is being shared among more stations, with the possibility of a new television station cutting into radio's market share. Already the effects have been shown with one station, Punt op Mediumgolf, running into trouble. Further closures in this troubled market would set back the whole industry and the drive to expand the broadcasting market. With this in mind, we would argue that this is a time for the radio industry to take a deep breath and wait for things to settle down before the market is shaken up again by major changes in conditions or licensing.

The licensing process of the last few years has led to the creation of a number of new media owners. This has diversified ownership previously in the hands of a just a few print-based groups, and the effects will be felt in the long term throughout the industry. Disruption of the industry could set this back significantly, as new media players would more vulnerable to these pressures than the established ones.

3. THE NEW BROADCASTING VISION

In line with international practice and developments, we support the initiative by the Ministry to set out a broadcasting policy framework which takes account of public interest obligations and market considerations. These two factors are pivotal to the successful growth of the broadcasting environment. Within the South African context, we remain convinced that these factors are the drivers of broadcasting policy.

In attempting to create a new broadcasting vision, the White Paper takes little account of the current framework for broadcasters and pays no attention to the issue of whether this framework is to be changed, and, if changes are to be made, what the effects will be on current broadcasters. As licensed broadcasters are subject to a regulatory regime, it is unlikely that the White Paper or new legislation can amend their conditions to increase their obligations. The question is: will new broadcasters who are licensed be subject to a different regulatory regime, and if they are, will this regime grant them fewer or more onerous conditions? Either way, this approach results in asymmetrical regulation and someone obtains an unfair competitive advantage. The problem is that the White Paper and the Broadcasting Bill (1998) appear to proceed on the premise that "everything is new".

Accordingly, it is recommended that the question of asymmetrical regulation be investigated prior to new legislation taking effect.

4. THE COST OF PUBLIC POLICY OBLIGATIONS

Based on our reading of the White Paper our compelling impression is that the policy framework places greater emphasis on public policy as opposed to market considerations. In general, such emphasis would contribute immensely to establishing social justice in an environment which once ignored and neglected public interest issues. We support the inclusion of this factor into the broad public policy environment. As a media company, we also have as an objective the implementation of this key component of the national policy framework.

The promotion of public service obligations is always difficult when the sound broadcasting market is in its infancy. This market was created towards the end of 1996 when the Independent Broadcasting Authority (IBA) granted licences relating to the sale of the six former SABC regional radio stations. In 1997, the IBA granted six new private sound broadcasting licences, sparking renewed competition for audiences and advertising. The new entrants are competing for advertising which has not grown significantly and they have to ensure steady revenue to meet their financial obligations. Therefore, programme formats must be linked to specific audience profiles to attract sufficient advertising.

Some of the important public service obligations, like the provision of news and information, carry cost implications. As the provision of news and information is in the nature of broadcasting. it is unlikely that anyone can quarrel with the obligation to provide this service, provided that the broadcaster can bear the cost implications.

To ensure that the broadcaster can tolerate the costs of providing news and information, regulatory thresholds are established. Thus, in the IBA's Private Sound Broadcasting Position Paper (1996) broadcasters are required to provide a minimum of 30 minutes of news a day irrespective of their formats. Prospective licensees were aware of this regulatory requirement prior to submitting their applications for licences and were able to factor in the costs of this regulation.

An amendment which increases the number of minutes of news per day will affect the costs of production and unless the revenue is increased, the broadcaster shows less returns. The cumulative effect of higher costs of regulatory requirements could prejudice the financial viability of broadcasters in a highly competitive market which is also extremely volatile. The proposed ban on cigarette advertising/sponsorship will also decrease the available pool of advertising revenue. The failure of radio stations, like Punt op Mediumgolf, subjects the market to further pressure and nervousness. Therefore, policy which enables the growth of a strong broadcastin2 market is welcomed.

5. POLICY AND REGULATION MUST GENERATE CERTAINTY AND MARKET CONFIDENCE

For policy and regulation to be enabling of the broadcasting environment, it is important to avoid uncertainty. At this stage, all private broadcasters are subject to the sound broadcasting policy and conditions contained in their licences. These are matters of certainty.

The White Paper appears to introduce new commitments for private broadcasters. For example, it says private broadcasters must . . . provide programmes of specific interest to all ethnic groups, men, women and persons with disabilities . . . (and) make particular efforts to broadcasting high quality domestic and international programmes for youth and children". (White Paper, page 22) This policy assertion fails to understand the segmentation of broadcasting and seems to suggest that even a station which is aimed at adults should provide youth programming.

As it is clear that the IBA cannot chance the existing licence conditions to introduce new conditions, we assume that this policy has been introduced to make provision for new services which will specifically tar get these markets. If our understanding is correct, it would assist the industry if the Minister could provide clarity on this matter. In fact, we recommend that the Minister indicates that to the extent that the policy introduces new conditions or obligations, it can only be applicable to new licensees.

The White Paper also suggests an inquiry into the sound broadcasting industry with a view to stimulating the local content industry, adding that the IBA will carry out a local content inquiry to achieve "a predominant local content within 10 years". (White Paper, page 25)

At the end of 1995, the IBA completed a national and comprehensive inquiry into local content and Parliament based its subsequent policy recommendations on the IBA's Triple Inquiry Report. The IBA's South African Television Content Regulations and the South African Music Content Regulations were promulgated on the principles which Parliament had adopted following the recommendations of the Triple Inquiry Report. The local content investigation, Parliament's resolution and the IBA's regulations provided the basis on which applications for licences were made and licence conditions were issued. This framework provides certainty and all players know the rules of the game. Our concern is that these rules appear to be changing. The approach which should be adopted is one which builds on the foundation which is firmly entrenched in the market. Such an approach promotes certainty.

It is a matter of record that at the local content hearing Kagiso argued for reasonable local content and since the requirements were set by the IBA, we have consistently supported the local content regulations. As a measure of our commitment to local content our radio stations continue to exceed the requirements. In addition, all our stations are actively involved in concerts, interviews and are always exploring ways in which to promote South African music.

If the new conditions apply only to new players. another problem will arise. The problem, as mentioned above, is that a different regulatory regime will apply to new entrants and such asymmetric regulation could have competitive implications for current and new broadcasters, making the market uncertain. Accordingly, we recommend that if any new conditions or regulations are made, the industry is fully consulted to determine the effect of the proposals and the circumstances and time frame for their implementation.

In attempting to create a new broadcasting environment, the White Paper and the Broadcasting Bill create a penumbra of uncertainty which will affect the confidence of broadcasters, advertisers and investors.

6. COMMUNITY BROADCASTING

The White Paper eliminates community of interest broadcasting services and favours the continuation of geographically-defined community stations. Community of interest broadcasting provides diversity of services and each service is targeted at a very specific audience. However, geographically-defined community stations compete directly with private broadcasters for audiences and advertising. If anything, the geographically-defined community stations often attempt to provide similar programming formats as the private regional services. Generally, geographically-defined community stations are defined purely in terms of their coverage area, giving them the opportunity to compete with private services which have much more coverage and other obligations.

Accordingly, we recommend that the Minister ensure that private broadcasters are not unduly prejudiced by geographically-defined community stations. The IBA should be instructed, as a matter of policy, to ensure that geographically-defined community radio stations do not compete with private broadcasters. Geographically-defined community radio stations should be subjected to a tight regulatory regime to prevent them from competing for advertising using the programme formats which regional private broadcasters have developed at considerable cost. In addition. as no reason has been furnished for the abolition of community of interest radio stations, these stations should continue to entrench themselves as they are a feature of the country's diversity of interests and provide for communities which are not served by other broadcasters.

7. SINGLE REGULATOR FOR BROADCASTING & TELECOMMUNICATIONS

The convergence of broadcasting and telecommunications technology must create new demands and difficulties for licensing the distribution of entertainment and information. Therefore, data, sound and video services should be subject to one regulator. From a purely practical administrative point of view, it makes sense for the country to pay for one regulator.

However, these considerations should be viewed in the context of the internationally accepted view that as broadcasting concerns content and telecommunications is about carriage of signals, broadcasting is a democratic imperative. As such, neither government nor industry should be allowed to control the airwaves; in this respect, the broadcasting sector of the merged authority must remain, via the appropriate legislation, independent of political and financial interests and influence.

The White Paper promises a new merged body with the same level of independence as the existing bodies. But as the existing bodies have different levels of independence, it is necessary that the merged authority provides for the broadcasting regulatory division to be governed by a statute with provisions which specifically maintain the independence of the IBA at the level of the current IBA Act.

When proposed legislation is drafted, we would welcome the opportunity to take part in the process so that we can contribute to the formulation of a truly independent regulator.

8. INCREASING THE LIMITATION ON FOREIGN OWNERSHIP

We note that a hearing is to be held to determine the increase in foreign ownership of broadcasting licensees. As the law stands, foreigners are limited to 20% of the equity of a licensee. South Africans are entitled to two AM and two FM licences (provided no substantial overlap exists between the AM or the FM licences) and one television licence. In addition, persons who own more than 25% of the equity shareholding in any licensee are deemed to control that licensee. South Africans are also limited to 20% of a licensee in an area where they are in a position to control a newspaper.

The notion of control must be the same for South Africans as for foreigners. Therefore. if the percentage which is deemed to constitute control is increased for foreigners, equity demands that the levels of control for South Africans must he the set at the same level. at least.

9. HUMAN RESOURCE DEVELOPMENT

All licensees are obliged to ensure that they comply with those conditions which are desi2ned to include previously disadvantaged persons at all levels of the business and to provide opportunities for training to develop staff and increase the pool of skills in the country. These developments should be acknowledged as the basic building blocks for the White Paper.

The difficulty with the White Paper is that it assumes that no human resources policies are in place and takes the position that no meaningful developments have occurred prior to its publication. It also makes no reference to the fact that the licence conditions of private broadcasters require that they provide for human resources development. Accordingly, we recommend that industry and government engage in a human resources audit to determine the state of industry and make such recommendations as are necessary to correct imbalances.

10. LOCAL CONTENT

Further imposition of financial obligations, such as increasing local content, will seriously prejudice private broadcasters all of whom are struggling to maintain their viability. As stated above, broadcasters are already obliged to broadcast local content. In some cases, broadcasters exceed the minimum local content requirements.

The White Paper and the Broadcasting Bill group sound and television broadcasting in the same category, causing confusion about the different modes of broadcasting. In fact, public service obligations differ in respect of sound broadcasting and are generally far less onerous than the obligations on television. It is unclear whether the White Paper and the Broadcasting Bill refer to both sound and television or only to television.

As stated above, South African music regulations for sound broadcasters are already in place as are local content regulations for television broadcasters. What changes the White Paper and the Broadcasting Bill intend to make to either or both these sets of regulations are unclear.

Kagiso will continue to strive to exceed the local music requirements and to contribute to the promotion of local content through concerts, etc. (Radio Oranje is sponsoring the development of an Afrikaans music web site). We also support the regular review of these levels on the understanding that we would take part in furnishing the IBA with information prior to any decision to increase or decrease local content levels.

In setting new local content levels, consistency must be the guiding principle. Clearly formulated rules contribute to certainty in the industry and radio stations will be aware of the expectations and demands of the regulator at all times.

Accordingly, it is recommended that clarity be provided on these issues as they carry significant cost implications for broadcasters.

11. THE BROADCASTING SCHOOL

We endorse the establishment of a national broadcasting school subject to the understanding that this school operates independently of government and that the industry plays a meaningful role in designing the curriculum and setting the standards of performance.

12. PUBLIC BROADCASTING

Three issues are of concern. The first is whether the commercial arm of the public broadcaster can successfully subsidise the public broadcasting arm. Unless the Ministry has undertaken a financial modelling exercise it is difficult to understand how it believes that the cross-subsidisation can be successful.

The second issue is the apparent control which the White Paper and the Broadcasting Bill have assigned to the Minister opening the possibility of the public broadcaster being run by the government. In affording the Minister the power to re-allocate funds from the commercial to the public arm, the principle of the public broadcaster's independence from government appears to have been overlooked. The commercialisation of one wing of the public broadcaster means that private broadcasters will compete with a public commercial broadcaster which is subject to government protection via government formulation of broadcasting policy.

The involvement of government in commercial broadcasting is questionable. Accordingly we recommend that government involvement in the public broadcaster be minimised to receiving regular reports for consideration by Parliament.

A third issue of concern relates to the possibility of the public service arm subsidising the losses of the commercial wing. This is likely to happen as one SABC channel - whichever is chosen -would be competing with eTV, M-Net and DSTV. The revenue which any one SABC television channel generates within the competitive environment would in all probability be insufficient to sustain that channel. If the commercial arm is unable to subsidise the public arm, then no reason exists for the government to be in commercial broadcasting.

Accordingly, it is recommended that.

1. The Minister's control over the SABC be abolished;

2. The financial modelling which demonstrates the success of the restructured SABC be made public; and,

3. The IBA investigates the feasibility of the restructured SABC and make its findings public for comment.

13. SPORT

The Broadcasting Bill gives the IBA the power to identify certain national sporting events and prevent private subscription services from acquiring exclusive rights to these events. The question is whether free-to-air television services can afford to pay for certain national events. It is of no help for the country if the IBA identifies national sporting events which must be broadcast on free-to-air but the television service is unable to afford the event. Accordingly, it is recommended that this issue be further investigated and that the national sports organisations take part in formulating guidelines for the broadcast of national events.

14. CONCLUDING REMARKS

The view that should be adopted in the broadcasting policy process is that the unfolding of a broadcasting environment should not be unduly hastened. Our impression is that the process is being rushed for no good reason. It is in the interest of growing a prosperous market and developing broadcasters' contributions to social policy concerns and local talents that we should proceed with caution.

Internationally the rapidly changing technology and the new developments in broadcasting, coupled with sensitive markets, are compelling foreign regulatory regimes to re-examine their environments which they recently changed.

Foreign regulators often comment about the rapid and sophisticated changes in South Africa's broadcasting environment. They point out that our country has done in a few years what took them decades to achieve. Our continued success lies in striking the balance between using public assets such as frequencies to contribute to the social good and generating sufficient revenues to pay for these contributions and remaining viable. It is from this premise that we have examined the White Paper and the Broadcasting Bill.

Appendix 2: Independent Broadcasting Authority

Independent Broadcasting Authority

Click here for the IBA's response to the White Papers on Broadcasting Policy

IBA COMMENTS TO THE BROADCASTING BILL

03 SEPTEMBER 1998

The Independent Broadcasting Authority (the Authority) welcomes the publication of the Broadcasting Bill (the Bill) and the proposed amendments to the IBA Act.

The process of "freeing the airwaves" began before the 1994 elections with the changing of the South African Broadcasting Corporation (the Corporation) Board and the concurrent process of transforming the Corporation from a state broadcaster into a public broadcaster. This was followed by the promulgation of the IBA Act 153 of 1993, which opened up the airwaves to new broadcasters.

This Bill is the next step in the process. It creates the environment for the development of a broadcasting system, which is responsive and responsible to the needs of all South Africans.

It is in this context that the Authority submits its comments on the Bill.

INTRODUCTION

Overall the Authority welcomes this chance to clarify roles between the different stakeholders in the industry – government, the Minister, the regulator, the public broadcaster and the industry.

However, we are concerned by the potential for litigation against the Authority which could be brought about by the confusion, or lack of clarity, between this Bill if it gets enacted as is, the IBA Act as well as the Enabling Legislation, for merger of IBA and SATRA when it comes to being. We hope that the legislators will take note of this concern and ensure that there are no contradictions between the two Acts as well as the envisaged Enabling Act.

We are also concerned by the status of recommendations made in the White Paper on Broadcasting Policy (White Paper), which have not been provided for either in the Bill or in the proposed amendments to the IBA Act. For example the South African Production Advisory Body is included in the Bill, but reference to the Digital Broadcasting Advisory Council and the Community Development Trust are excluded.

The Authority believes this Bill should deal with finalising changes to the Corporation and other issues should be dealt with by amending the IBA Act through Schedule 1 of this Bill. For example sections 27, 29 and 31.

The Authority notes with concern the lack of a provision in the Bill that gives the Corporation the necessary legal powers to levy licence fees for the use of television sets and recommends that a section providing for such be inserted. We refer you to Section 17 of the Broadcasting Act of 1976. This section should also provide on how such fees will be used by the Corporation.

CHAPTER I

FUNDAMENTAL PRINCIPLES AND INTERPRETATION

Definitions and interpretation

Section 1

The Authority has noted before that the definition of "broadcasting service" in the IBA Act is too narrow and that we need a technology neutral definition. It appears that in the new definition pay per view is excluded. Multi media services have also not been properly taken into account in the classification of broadcasting services.

However, we do not believe that the definition of broadcasting service in the Bill fully addresses our concerns. Section 1(c) attempts to address these concerns by allowing the Minister to add to the categories included in the definition. We are however of the view that the Minister should give policy directives with regards to additional services or classes of services, rather than just publish this in the government gazette.

We are further concerned by an apparent contradiction in this section. While the introduction states that, amongst others, broadcasting licences, broadcasting licensee and broadcasting service have the meaning assigned in the IBA Act, this section later provides a new definition of broadcasting service.

Further, the definition of local content is too restrictive. We recommend that the definition in the IBA Act and Regulations be used instead.

There is also an apparent confusion over the use of the terms "private" and "commercial" broadcasting services, and "sound" and "radio" services. The IBA Act provides for private broadcasting services and there is no reference to commercial broadcasting service. An amendment to the IBA Act to include such should be effected.

The Authority is of the view that subsection 2 seems to create the impression that some provisions of the Constitution are more relevant than others and the Authority is opposed to this view.

Recommendations

• Reference to broadcasting service in the introductory part of the section should be deleted. The definition as contained in the Bill should remain taking into consideration the changes proposed above.

• The IBA Act should be amended to include the definition of commercial broadcasting service as per our recommendations to the proposed amendments.

• The definition of local content should be as provided in the IBA Act and Regulations.

• We propose deletion of subsection 2 of the Bill.

Objects of the Act

Section 2

The Authority endorses generally the objects outlined in the Bill. However, it is unclear whether or not this section replaces Section 2 of the IBA Act; if so the Authority is concerned about the lack of reference to public interest, which aspect forms the core of the regulatory functions of the Authority.

The relationship between section 2 objects of the Act and 3 South African Broadcasting system is also unclear. We further seek clarity on their relationship to section 2 of the IBA Act.

We further note that there is little emphasis on the viewer or listener and believe that the

Bill should also stress the need for each person to have a choice of service.

CHAPTER II

SOUTH AFRICAN BROADCASTIMG SYSTEM

South African Broadcasting system

Section 3

The Authority endorses the introduction of the Government’s role in developing broadcasting policy. However, we are concerned about the lack of reference to the regulator’s role in fulfilling certain obligations relating to the use, protection and access to broadcasting resources.

The Authority is also concerned about the disclaimers contained in the reference to "within the financial resources" in subsection 4 and "as circumstances permit" contained in subsection 6. Such clauses allow broadcasters to avoid fulfilling important obligations such as education.

CHAPTER III

CLASSIFICATION OF BROADCASTING SYSTEM

Licences

Section 4

It is unclear why there is reference to "authorisation" in this section. The Authority is of the view that a broadcasting or a distribution service can only be provided upon the issue of a licence, as provided for in the IBA Act.

With regards to subsection 2 we refer to our comments on the definition of broadcasting service relating to section 1 of the Bill.

Recommendations

• We recommend that reference to "authorisation" in this section be deleted.

• We recommend that subsection 2 be deleted.

Classes of licences

Section 5

The Authority notes that the category of licences mentioned in this section differs from the ones mentioned in the IBA Act.

Recommendation

We recommend that the IBA Act be amended to include the proposed additions.

CHAPTER IV

PUBLIC BROADCASTING SERVICE AND CHARTER OF CORPORATION

The Authority welcomes the intention of the Bill to repeal the 1976 Broadcasting Act and to address the contradictions contained between the new dispensation and the 1976 Act. We further agree with the need to streamline the Corporation’s operations through corporitisation.

We further welcome the introduction of a Charter drawn up by Parliament for the Corporation’s public services.

We would however like to raise several concerns:

1. We find it difficult to comment on the detail of the incorporation of the

Corporation without reference to the Memorandum and Articles of Association.

2. We would like to note that in this regard the legislator should take note of the need to ensure editorial independence of the Corporation.

3. We further note, as stipulated in our response to the White Paper, that we find it difficult to comment on the restructuring of the Corporation into a public and commercial wing in the absence of a detailed study on the impact of this division. For instance, there is no indication of what the extent of the cross subsidisation will be, the impact of restricting advertising on the Public Broadcasting Services and how potential duplication of corporate services will be avoided. We do not wish to see the further marginalisation of public broadcasting and urge that the division of the Corporation does not create an environment for this marginalisation to take place.

4. We also note that this division of services could pave the way for including equity partners in the commercial services. We do not believe the Bill adequately addresses this potential.

5. The Authority’s role in licensing and regulating for the commercial services is clear, but our relationship with the public wing of the Corporation is not fully clarified. We believe it should be stated that the public sector must also abide by the IBA Act and Regulations.

South African Broadcasting Corporation

Section 6

We believe there is a lack of clarity regarding who enforces compliance with the Charter. It is clear that the Authority should monitor the Charter, but we seek clarity in the Bill regarding what this involves and who imposes sanctions against the Corporation.

We further note the IBA Act enables all broadcasters to adhere to self-regulatory structures. At the moment the self-regulatory body, the BCCSA, adjudicates complaints regarding the Corporation. This further confuses the issue of monitoring complaints regarding the Charter.

Recommendation

We propose that the Authority deal with monitoring and enforcement of the Charter.

Objectives of Corporation

Section 8

It is the Authority’s view that the heading of this section is a misnomer as some of the provisions contained therein relate to the powers of the Board and not to the objectives of the Corporation as such.

The Authority is of the view that subsection © and (g) are too broad. While we understand that the intention of subsection (g) is to enable the Corporation to undertake other activities, we are concerned about the vagueness thereof.

This could allow the Corporation to engage in "anti-competitive" activities, which would not be in furtherance of the objects of the broadcasting system.

Organisation

Section 9

Further to our comments in the introductory section on this chapter (supra), regarding our difficulty in commenting on this section without reference to the Memorandum and Articles of Association, we seek clarity on the separate administration of the two wings of the Corporation. For instance it is important to state that this will be done in such a way as to ensure complete separation of accounts in order to counter any perception that licence fees, for example, could be used by the commercial wing.

Public broadcasting service

Section 10

The Authority welcomes the introduction of a Charter for the Corporation’s public broadcasting service. We believe that this will go a long way to ensuring that this service remains true to its public service mandate and to ensuring a common understanding of what is meant by public broadcasting.

However, the provisions of this section appear to be less stringent for the public broadcaster than the provisions applicable to the commercial broadcasting sector.

Recommendation

We recommend that the provisions of this section be phrased in the imperative. We further believe a clause must be inserted binding the public broadcasting service to abide by the IBA Act and Regulations

Board of Directors

Section 13

We recommend that this section should address the issue of the conflict of interest of Board members, for instance as in the provisions of section 11 of the IBA Act.

Rights and obligations

Section 18

The use of the word "entitled" in subsection 2 gives the impression that the Authority has no discretion in granting any licence(s) to the Corporation.

Recommendation

We recommend that this subsection be amended as follows:

"Upon application for a licence in accordance with subsection 1, the Corporation shall pay an application fee, as prescribed by the Authority from time to time".

CHAPTER V

COMMERCIAL BROADCASTING SERVICES

As stated regarding other chapters, the Authority believes this section should rather be included in Schedule One dealing with amendments to the IBA Act than in the body of the Bill. We also seek clarity on the relationship between this Chapter and corresponding sections of the IBA Act dealing with private broadcasters. We are for example unsure if this amends these sections of the Act, or whether it should be read together with these sections.

We would further again like to remind the legislators of our earlier comments regarding the term "commercial". In the IBA Act the term used is "private". There must be consistency between the two pieces of legislation.

Objectives

Section 27

We would again like to note the discrepancy in language between this Section and Section 10 dealing with public broadcasting services. In the previous section the public services are urged to "strive to" achieve certain objectives, whereas the private services are compelled to achieve certain ends. For example the public broadcasting service is urged to "strive to make services available to South Africans in all the official languages as circumstances permit" while private broadcasters "must provide, as a whole, programming in all South African official languages".

While the Authority endorses the position that commercial broadcasters should be obliged to fulfill certain public service ends, we believe this is primarily the role of the public broadcaster.

While other tiers of broadcasting may assist, the public broadcaster receives public monies precisely to achieve these goals.

The emphasis we believe should not be on each broadcaster, but rather on the Authority. The Authority should be compelled in its licensing practise to aim at ensuring that commercial broadcasters when viewed collectively, are diverse and address a wide section of the South African public.

We further note that commercial services are compelled, within a period of time, to be extended to all South Africans. There is no corresponding obligation on the public service. While the Authority supports the view that it is important to increase the diversity of services available to all South Africans, particularly in neglected areas and among neglected audiences, we do not believe this is primarily the obligation of commercial services. Commercial ventures targeting audiences less attractive to advertisers may struggle to succeed. Broadcasters should therefore be encouraged to move in this direction, but they should not be obligated to fulfil the mandate of the public broadcaster.

Recommendations

We recommend the following changes:

27 1 (a) be amended to read "should, when viewed collectively, provide a diverse range of programming addressing a wide cross section of the South African public"

27 1 (b) should read "should provide, as a whole, programming in all South African official languages;"

27 1 (d) should be removed or rephrased to encourage roll out of services to outlying areas. We believe though that this aim is partly covered in point (a).

Section 28

Subscription television service

We recommend that this section be removed from the Act, as we believe it is a policy directive rather than a statutory requirement.

We further again urge (as stated elsewhere in this document and in our submission on the White paper) that government enters into a dialogue with the regulator concerning its budget and time frames for the projects proposed to the IBA.

The Authority is of the view that the provisions of this section are not appropriate in legislation as they contain a policy directive and should therefore form part of a policy document.

CHAPTER VI

COMMUNITY BROADCASTING

Community broadcasting services

Section 29

As stated previously we seek clarity on the relationship between this section of the Bill and corresponding sections of the IBA Act. We also believe this chapter should be included as an amendment to the current Act rather than in the body of the Broadcasting Bill.

We welcome the intention of this Bill to address problems with the current definition of community broadcasting, which were identified by the Authority during the consultation process preceding this Bill.

We believe overall that the amplification of the current definition to include the need for distinct programming on community services does address our concern.

We do not believe that community of interest services should be abolished. An alternative solution could be to continue to allow such stations but emphasise that the Authority should consider stations that serve the broadest cross section of listeners ahead of those stations who cater for different interest groups or only for sections of a community.

We further believe that there may be a need to further categorise stations and that there should be for example a Section 28 Inquiry into religious broadcasting. This Inquiry would, amongst other things, investigate whether there should be a separate category for religious broadcasters.

Recommendations

• 29 (2) should be removed. We are unsure what the intention of this clause is, as all licences must be held by licensees.

• 29 (3) should be amended to read "The licensee must be managed by a Board which must be democratically elected from all members of the community or communities to be served by the licensee"

We believe this accommodates our concerns about confining the definition to cover only geographic services.

• 29 (4) should be amended to read: "A community broadcasting service is controlled and managed by people representative of all sectors of the community or communities it is licensed to serve "

• We believe there should also be an additional clause stipulating that there should be mechanisms to enable the community to participate in both the selection and provision of programmes on the station.

• 29 (7) is vague. We believe that there should be no restrictions on either national or local advertising on community services, other than the limitations placed on all broadcasters by the Authority with regards, for example, to the number of minutes per hour of advertising allowed.

• 29 (9) should be removed, as it is a directive to the Authority. It should be replaced with a clause emphasising that the IBA should prioritise services, which appeal to a broad cross section of the population, but that it should have the discretion to license other services depending on the needs of the particular community.

• 29 (10) & (11) are also directives and should be removed.

CHAPTER VII

SIGNAL DISTRIBUTION AND MULTI-CHANNEL DISTRIBUTION

Part 1 : Signal distribution and objectives

We believe Section 30 should be removed, as it is a policy directive to the Authority rather than a statutory requirement.

We are further unclear whether Section 31 amends similar Sections in the IBA Act. We are concerned if it does so as it removes for example the different categories of signal distribution catered for by the Act.

We are further concerned by the objectives outlined in the Bill as they place certain obligations on signal distributors, which are the responsibility of the broadcaster. For example we do not understand how distributors can distribute services in all the official languages or provide a diversity of type of broadcast services and content.

The intentions expressed from subsection 2 onwards are good, but are not practical for broadcasting purposes. They are more suited for telecommunications purposes.

We also note that the Bill is silent on the need to develop a differential tariff structure for the different sectors of broadcasting as outlined in the White Paper. We support the principle that community broadcasters should be dealt with differently than other broadcasters with regards to tariffs for signal distribution services.

Part 2: Multi-channel distributors

The Authority supports the move to bring distribution services into the regulatory framework but seeks clarity on the licensing of separate channels offered by distributors (Clause 32 (2)). This would mean that each channel, even if sourced internationally, will require a licence from the Authority.

The Authority is of the view that the provisions of section 33 are not appropriate in legislation as they contain a policy directive and should therefore form part of a policy document.

CHAPTER VIII

FREQUENCY SPECTRUM DIRECTORATE

The Authority seeks clarity on why this Section is included in the Broadcasting Bill. This Section does not relate to either the IBA Act or the 1976 Broadcasting Act, but rather clarifies roles outlined in the Telecommunications Act.

CHAPTER XI

ADVISORY BODY TO MINISTER

We welcome the introduction of this body, but we are unclear of the need to include this Chapter in the Bill. This body is not a statutory agency but rather an advisory body. We believe the Minister has the power to appoint such bodies without them being referred to in statute. If necessary there should rather be an amendment to the IBA Act giving the Minister the power to appoint advisory structures.

We also note that other structures/bodies which the White Paper indicated would be established such as the Community Development Trust and the Digital Broadcasting Advisory Council are not contained in the Bill.

CHAPTER X

SKILLS DEVELOPMENT

The introduction to this chapter states that this chapter relates to the use of broadcasting as a resource in support of both formal and informal education. There are however no correlating sections in this chapter, but rather only sections dealing with human resource development.

The Authority supports the need for broadcasters to make a contribution to human resource development within the industry, but does not believe this is fully addressed in section 36. For example, the bill is silent on how licensees should contribute towards this goal.

Recommendations

We recommend that the IBA Act should be amended to take into account the above. Further that a section dealing specifically with human resource development within the Corporation be inserted in this Bill.

CHAPTER XI

REGULATIONS

The Authority is unsure of the intention of clause 37 (1). We are concerned that as this section is vaguely drafted it could contradict the roles of the Minister and the IBA as outlined in this Bill.

Similarly with 37 (2) we recognise that although Government has the right to determine broadcasting policy, it should consider recommendations made by the Authority – even if it subsequently rejects these.

AMENDMENTS TO THE IBA ACT CONTAINED IN SCHEDULE 1 OF THE PROPOSED BROADCASTING BILL.

The Authority welcomes the inclusion of the amendments suggested by itself in this Schedule. We here confine ourselves primarily to commenting on additional amendments.

A. New Definitions added appearing in the Bill:

1. National Revenue Fund:

This definition is introduced into the present IBA Act because of the proposed amendments of section 15 of the IBA Act, which deals with the funding of the Authority. In this regard, see the IBA’s comments on proposed amendment of section 15 below.

2. Public commercial broadcasting:

The Authority welcomes this definition as it differentiates between commercial broadcasting services that are owned by private persons or entities and those that are owned by the state. This will enable the Authority to apply its regulations with reference to this distinction, particularly where issues of cross-subsidisation do arise and the Authority may be called upon to determine whether that situation does contribute to a situation of fair competition between broadcasters.

3. The definition of "community broadcasting services"

The Authority understands the need to change to the definition of Community broadcasting because of the limitations entailed in the current definition of community of interest. However, the Authority is concerned that the definition proposed in the Bill may pose further difficulties. We propose that instead of restricting the present categories of community broadcasting, there may be a need to expand the existing categories, eg. creating a separate category of religious broadcasting. The Authority believes that the present definition of community of interest should not be abolished until there is public inquiry on the matter to canvass public opinion.

4. Amendment of Section 10 of the IBA Act.

The Authority is of the view that the quorum of the Council should be the majority of Councillors in office at the time, and recommends the following amendment:

(4) "the quorum for any meeting of the Council shall be the majority of the total number of Councillors holding office at the time. For example in the case of seven Councillors holding office, four shall constitute a quorum.

5. The Amendment of section 13 of the IBA Act.

Although the Authority understands the aim of this amendment to section 13, it is not clear whether this section is intended at substituting section 2 of the IBA Act and other sections that deal with the Authority’s powers to grant licences (section 33, 41,42, 44, 45, & 46 etc) and those powers that relate to the holding of Inquiry hearings under section 28 of the present Act. This confusion has arisen because the proposed amendments make provision for powers that overlap with those in the aforementioned sections.

We welcome the clarification of the IBA’s role vis a vis the role of government.

6. Insertion of section 13A – General roles and powers of the Minister.

The Authority welcomes the powers that are granted to the Minister to issue policy directives under these sections. However, there is confusion as to whether the policy directives that the Minister can issue are to be consistent with the objects of section 2 of this Bill or to those objects obtained in section 2 of the IBA Act. Until the status of the current section 2 of the IBA Act is clarified as stated in our comments in 4 above, there continues to be an overlap and there may be duplication and contradictions between the powers granted to the Minister and the functions of the Authority.

The Authority is of the view that any government directives over and above it’s mandate must be accompanied by a separate budget.

7. Amendment of section 14 by substitution of subsection (3)

This amendment is aimed at removing the current discretion the Authority has in determining the remuneration of its employees. The Authority is of the view that this discretion should be retained by the Authority in order to attract and retain skilled professionals within its human resources that will enable the IBA to efficiently execute its public mandate. This discretion means that the Authority will measure itself against both public and private sectors. For the reasons stated above, the Authority is of the view that this amendment is unnecessary.

8. Amendment of section 15 by the substitution of subsection (1) and repeal of the whole of section 16 of the IBA Act.

As stated in our response to the White Paper, the proposed amendment of the IBA Act by the substitution of section16 that the Authority may not retain any income above its government grant does not take into account the purpose of licence fees as articulated in the IBA Act and does not give the Authority any flexibility in carrying out its functions. The Authority is of the view that it should be allowed to continue to retain application fees as provided for in the IBA Act. This will enable the IBA to cover its administrative expenses relating to applications for licences and amendments thereto. Alternatively, the Authority proposes that it should be allowed to retain all fees and the government will only fund the shortfall in the Authority’s approved budget.

The proposed repeal of section 16 of the IBA is also not favoured by the Authority for the reasons mentioned above. Our basis for the opposition to this repeal is that the IBA may not be able to take advantage of any form of funding that may come from charitable institutions for specific projects like research and study visits. The Authority is not opposed to the principle of accountability to parliament; hence it respectfully submitted that whatever funds the Authority may raise should be openly and clearly accounted for in its annual financial reporting to parliament.

9. Amendment of section 17(2) of the IBA Act.

The Authority has no material objection to this amendment, as its intention is to empower the Chairperson to authorise staff members to draw and sign cheques on behalf of the Authority. The most preferable view however, is to retain the current construction of the sections as it vests collective accountability of Councillors in financial matters without divesting the chairperson of his/her powers.

10. Amendment of section 18

This amendment is premised upon the proposed amendment of section 14 &15 that the Authority not be allowed to retain any funds obtained from fees charged by it. It directs that the Authority invest those funds into the National Revenue Fund. In this regard see the Authority’s comments under items 1, 6 & 7.

11. Amendment of section 31

The Authority accepts this amendment as it brings the Authority’s powers in line with the national policies that would be developed relating to the allocation of frequencies.

B. PROPOSED NEW AMENDMENTS FOR INCLUSION IN THE BILL:

The Authority proposes the following amendments to Section 48 as detailed in the explanatory memoranda annexed hereto.

1. Amendment to section 48 - Foreign Control

The Authority proposes that section 48(1)(b) should be amended as follows:

(a) Amending section 1 of the IBA Act by adding the definition of the word "financial interest" as follows:

Section 1(d) " financial interest" means " interest that may not have voting rights attaching to it but which gives the person or entity a financial interest directly via shares or indirectly via an agreement of some form giving it the power to have control of the licensee or effective say over the affairs of the licensee"

(b) By amending section 48(1)(b) as follows:

" have financial interest or interest either in voting shares or paid-up capital in a private broadcasting licensee exceeding twenty percent"

(c) By adding to Schedule 2 instances that the Authority will take into account in determining financial interest. These instances which the Authority may regard as constituting financial interest will include the following:

4. (a) participation by the foreign shareholder in share incentive schemes for staff designed for staff;

(b) the extent of shareholder loans contribution by the foreign person;

(c) the extent to which the foreign person is reimbursed for services rendered to the licensee in which the foreign person(s) holds shares;

(d) the extent to which the foreign person is entitled to determine the composition of the board of directors of the broadcasting licensee;

(e) the extent to which the financial rewards due to the foreign person in return for supply to services is linked to the turnover of the company ;

(f) Instances mentioned in schedule 2 of the Act.

2. MEMORANDUM EXPLAINING THE REASONS FOR PROPOSED AMENDMENT TO SECTION 48.

Section 48(1)(b) of the IBA Act has generated a lot of confusion and debate and has been subjected to many interpretations in so far as to what the term ‘financial interest’ mean and how it should be interpreted. A restatement of the section would be necessary here:

It reads as follows:

" One or more foreign persons shall not directly or indirectly:- have financial or voting interests in a private broadcasting licensee exceeding twenty percent in total"

Most applicants that came before the Authority during the private television hearing interpreted this section differently to suit their individual financial and controlling structural arrangements with their foreign shareholders or partners. This has necessitated the use of expensive legal opinions from senior legal counsel, which in many cases presented possibilities and questions than answers. It is against that background that we think Parliament, in drafting the new broadcasting policy law, define or simplify the meaning of the concept ‘financial interest’ and as to what the words ‘in total’ actually entail. This should be a parallel process to that of an increase in foreign shareholding percentage proposed in the White Paper and a task that is also entrusted to the Authority to investigate.

The other question that arises is whether what is prohibited is the interest in the business of the licensee or the licensee itself. Most opinions that were received by the Authority during the Private Television hearing were unanimous in defining the kind of interest prohibited by the Act. They stated that the interest that fall within the prohibition is the interest in the licensee itself, i.e. in the form of acquisition of shares in the licensee, profit sharing arrangement schemes, etc and not in the business of the licensee. The prohibition, they argued was aimed at preventing the control of broadcasting licensee by foreigners to the detriment of South Africans and not business dealings or investments in the broadcasting media industry.

Other submissions made the point that consultancy and management agreements that they entered into with their foreign partners do not constitute financial interest in the form of what is envisaged in section 48(1)(b). These agreements are, according to most submissions, purely commercial contracts that do not go into the control of the licensees.

Finally, The White Paper further, requires the Authority to investigate the appropriate levels of foreign ownership that should be allowed in the broadcasting licensees and the criteria that will be used to determine effective control and to ensure that this ‘effective control’ is held by South Africans.

CONCLUSION

The Authority is thankful for this opportunity to make input on the Broadcasting Bill.

Although in this submission we have concentrated on our concerns regarding certain sections of the Bill, this in no way undermines our overall belief that the drafting of this Bill and the clarification of broadcasting policy for South Africa is a very important step to further the rights of South Africans as contained in the Constitution.

We hope that our comments will assist in formulating the law in order to ensure that we have a vibrant broadcasting policy in South Africa now and in the new millennium.

Appendix 3: National Association of Broadcasters

National Association of Broadcasters

1. INTRODUCTION

The National Association of Broadcasters (NAB) is a non-profit organisation formed to represent the interests of more than 70 broadcasters, and broadcasting associations, in South Africa. The members include commercial and community television, commercial and community radio, signal distributors and associate members.

The main object of the NAB is to promote the development of aural and visual broadcasting in all its forms as well as to serve as a forum for sharing information and discussing matters affecting the broadcasting industry.

In particular, the NAB endeavours to:

Promote a system of broadcasting that respects freedom of choice for viewers, listeners and broadcasters, whether commercial, community or public;

Create a favourable climate for developing broadcasting;

Support and foster the principles of democracy, freedom of expression and the diversity of voices and images in broadcasting;

Protect members in every lawful and proper manner from unlawful and unfair interference and injustice;

Consider and address matters affecting the broadcasting industry and formulate policies consistent with the principles set out in these objects; and,

Generally, to do all things incidental, necessary and proper to attain the above objects and to encourage and promote practices which will strengthen and maintain the broadcasting industry so that it may best serve the public, render a proper return for stakeholders and investors and establish recognition of broadcasting both as a business and as a public service.

The NAB fully supports the process of developing our broadcasting environment and undertakes, where practicable, to contribute to the unfolding of the broadcasting policy process and to play a part in ensuring a prosperous future for the broadcasting industry in our country.

The NAB, in making decisions, operates on consensus. As the members represent a range of interests, the NAB cannot comment on every matter in the White Paper and in the proposed legislation in a detailed manner. The NAB best represents its members by focussing on those issues and concerns which members identify for comment and recommendation. Members also have an opportunity to comment in their own right. Therefore, for the purposes of furnishing input to the White Paper and the proposed legislation the NAB addresses those macro issues that affect the broadcasting industry.

2. THE BACKGROUND

As a matter of convenience, it is necessary to identify the broad principles which form the backdrop for the development of our broadcasting environment. To this end, the NAB acknowledges the different roles of government which creates policy for the industry, the regulator which licences and monitors licensees and the broadcasters and stakeholders who are involved in the business of broadcasting.

Within this tripartite structure each component relies on the other for its own success. Government policy aims to satisfy the dual and often competing interests of the public interest and market imperatives; the regulator licenses, among others, to ensure the satisfaction of audience needs as well as the public imperatives of development, diversity of programming, diversity of ownership, the development of local content and the promotion of independent producers’ talents; however, the business of broadcasting must, as a result of government policies and the regulatory regime, grow and prosper.

The public interest is served through balancing the market imperatives with the goals of social interest. South Africa’s history and current conditions demand that both the market imperatives and the public interest objectives are given equal prominence. In furthering these principles, the NAB supports the independence of the broadcasting regulator as the licensing and monitoring authority which must be independent of commercial or political influences. This principle is universally acknowledged among mature democracies and is particularly applicable to our historical circumstances to ensure that broadcasters are all subject to the same rules.

The regulation of broadcasting in the public interest creates opportunities for the achievement of national goals, balanced by economic factors and financial concerns. The development of a broadcasting market in which a robust diversity of voices and diversity of ownership thrive in a regulated competitive environment depends largely upon the existence of a regulator which promotes the public interest.

It will always be in the public interest that diversity is entrenched because this diversity is the source of a young democracy. Historically, when governments take part in granting concessions for broadcasting the democracy is threatened; unpopular views are marginalised and the extent of support for government becomes the main criterion for entry into the broadcasting market. An independent regulator created for the common weal serves to strengthen the framework in which the marketplace of ideas flourishes.

The exclusion of government from regulatory policy is also unhelpful. In determining the national objectives of the day, the government formulates broad policy in all spheres of activity, including broadcasting. Government plays a fundamental role in initiating and formulating the broadcasting policy landscape for the regulator. This government policy sets and establishes the limits of funding for the regulator. The new licensing initiatives of the regulator would flow from the national broadcasting policy objectives which government would take into account in the budget of the regulator.

Therefore, the success of the regulator lies in the legislative balance of creative government participation, on the one hand, and the independence of the regulator in making decisions about regulation and licensing in the public interest. The IBA Act, as currently formulated, ignores this balance.

It is against this background that the NAB makes its analysis of specified issues in the White Paper and the proposed legislation and recommends proposals which will contribute to the unfolding of a broadcasting environment which takes account of the tripartite of interests among government, the regulator and the industry.

In providing this comprehensive response, the NAB records its views on the wide range of issues covered in the White Paper. The NAB believes that it is necessary to respond to the issues in the White Paper as this Paper will provide the Minister with the principles upon which future policy directives will be issued to the IBA. By furnishing its response at this stage, the NAB avoids the problem of commenting on specific sections of the White Paper after the Minister has issued a policy directive. The NAB hopes that the Minister will re-consider aspects of the White Paper which have been identified in this response. In this co-operative spirit, the NAB looks forward to taking part in such further consultations as the ministry or the regulator may require from time to time.

EXECUTIVE SUMMARY OF RECOMMENDATIONS TO THE WHITE PAPER

1. GENERAL ISSUES

1.1 Cross-media control

The NAB recommends that the Parliamentary amendments to the Triple Inquiry Report be retained.

1.2 Single authority for broadcasting and telecommunications

The NAB looks forward to taking part in making input into this important legislative process.

1.3 IBA needs resources and capacity for range of new demands

In addition to its current commitments and with limited staff and budget, the IBA will not be able to conduct the inquiries demanded in the White Paper and the Broadcasting Bill. The NAB recommends that Parliament makes available the necessary resources to the IBA.

2. COMMUNITY RADIO

The definition of "community"

Community of interest broadcasting must be retained in the definition of community broadcasting to allow for the expression and communication of those interests which are not served by other broadcasting services.

Limitation on national advertising

In order to remain viable, community radio stations need to attract advertising revenue from small businesses as well as national advertisers.

Sharing of frequencies

It is recommended that frequency-sharing be avoided unless the arrangement constitutes a self-initiated and voluntary agreement between two services.

Reserving frequencies for the community sector

The NAB supports the setting aside of frequencies for specific broadcasting categories within an orderly frequency management system which takes account of the diverse nature of the community broadcasting industry. The current community radio frequency plan should be urgently reviewed and the industry consulted prior to the publication of the plan.

Lower signal distribution rates for community broadcasters in needy areas

Due regard should be taken to ensure that signal distributors can compete effectively.

The Community Development Trust

The NAB welcomes this proposal and looks forward to making input on the formation of this trust which, it is recommended, should take account of the following:

the terms of reference for the trust;

the appointment of trustees;

a structured relationship among the trustees, the government and the regulator; and,

the test to be used for providing funds.

Handling of surplus funds

The government should clarify whether its statement merely endorses the status quo or is proposing other conditions with respect to the use of surplus funds. Specifically, it should be made clear whether this proposal implies that surplus funds may not be invested in developing the community broadcasting service.

The government assistance training programme

The NAB welcomes this proposal and looks forward to further discussion on the following issues:

the needs of community broadcasters with regard to training;

the relationship between community broadcasters and the proposed training institutions; and,

the structure, mandate, constitution, funding and operations of such training institutions.

The current licensing process

Notwithstanding the policy in the White Paper and the draft legislation, the current four-year licence application process must proceed as a matter of urgency.

3. COMMERCIAL RADIO

Government initiatives to grow the industry

The NAB recommends that government provides details about intended measures to grow the industry so that stakeholders can assist in ensuring the success of the intended measures.

Population coverage goals

If government intends to alter the current broadcasting environment in respect of requiring that private broadcasters expand their coverage areas, broadcasters must be consulted as their costs will be increased. In any event, such a proposal can only affect future broadcasters as current broadcasters’ licence conditions do not require expanded coverage.

Coverage of neglected geographic areas

Any expansion of the private radio network (by granting additional licences) must be based on economic feasibility.

Extension of services

Private sound broadcasters should themselves determine whether they want to expand their coverage. If expansion of coverage becomes a regulatory imperative, the additional costs of expansion will affect the profits of individual broadcasters. Therefore, government is requested to require extensive population coverage only in the case of national sound broadcasting and television licences.

Introduction of new services

Either government or the regulator should ensure consultation with the public prior to the invitation to apply for new licences. Therefore, the invitation should be based on the extent of competition that will be tolerated in a market as well as the gaps that are intended to be filled by the new service.

Social contributions by private broadcasters

The NAB is of the opinion that the commercial imperatives of private radio stations dictate programming and format.

News broadcasts

Private radio stations should be permitted to provide news coverage which suits their particular format and audiences.

Employment, training and development

If the government intends to alter the current rules relating to training and development of the historically disadvantaged and minorities, prospective licensees will have to meet more onerous obligations than current licensees. Government should clearly explain its intention, stating whether and why it is not satisfied with the existing employment policy and what alternatives it proposes. Generally, the NAB favours government consultation with the public and stakeholders prior to changing the current licensing criteria relating to the employment of the historically disadvantaged and minorities.

IBA investigation on foreign ownership

The industry welcomes the possibility of increasing the level of foreign ownership in broadcasting services. The industry is keen to take part in the inquiry and urges government to make all information available to the public so that informed input may be provided to all aspects of the investigation. Therefore, any inquiry by the IBA should be disclosed to the public for comment prior to the publication for comment of proposals on ownership and control.

Increasing local content

As a matter of principle the public and stakeholders should be encouraged to take part in the proposed reviews. The local content regulations already state that the IBA will review the regulations within three years after coming into effect with the intention of raising the quota for some or all categories of broadcasting licences.

Coverage of neglected areas

The NAB welcomes the proposal to introduce new services outside the metropolitan areas and urges that government considers significantly reducing public service obligations to assist broadcasters in these areas. Very light regulation is recommended.

Favouring South African programming

This matter is a regulatory imperative in the licence conditions. At this stage no changes should be made unless after consultation with the public and stakeholders.

Separation of broadcasting and signal distribution

Vertical integration should not in principle be denied. It should be assessed on a case-by-case basis.

4. TELEVISION

The issuing of new licences

Subject to the overall recommendations of transparency and consultation, all decisions affecting the industry and which impact on the market should be the subject of consultation with the industry. Therefore, the industry should be consulted and be continuously involved with the regulator’s study of the market. In addition, the regulator should publish for public comment its full report and recommendations to the minister. The industry and the public should have access to all submissions/representations made by other interested parties.

Time-table for local content

The NAB accepts the 10-year period as a guideline to focus on the development of local content but recommends that audience demand and quality programming remain the essential ingredients for successful broadcasting enterprises.

Developmental Sport

As the White Paper does not define the concept "developmental sport", the definition should be formulated in consultation with the industry, the regulator, the ministry and the relevant representative sporting codes. Moreover, "developmental sport" should be included as a programming genre for the purposes of setting minimum local content levels.

Priority access to the advertising cake

The NAB recommends that the public and industry be consulted prior to reducing or prohibiting broadcasters’ revenue streams.

Review on hourly limits

For the sake of completion and to avoid uncertainty, the NAB recommends that the purpose of any review, particularly a review on hourly advertising limits, should be to open the market and give broadcasters more opportunities to generate stronger revenues. The policy consideration underlying regulatory reviews should always be to assist broadcasters so that they can continue to provide popular and public-interest quality programming.

Advertising limits on subscription services

While the NAB supports the review by the regulator, the organisation recommends that the principle of public and industry participation be paramount in the formulation of policy on the possibility of advertising limits for pay television.

Local content

The NAB recommends that no changes be made to the current local content regulations unless the public and the industry are consulted.

Local content funding

No further recommendations are required, pending the regulator’s proposed time-table.

Local content in a multi-channel environment

The NAB urges the government to reconsider its view on local content in a multi-channel environment. While the NAB supports the principle of increasing local content levels, this objective should not be permitted to prejudice the fragile revenue streams of broadcasters. Therefore, the NAB requests that the government initiates an inquiry into local content levels in a multi-channel environment.

South African programming perspective

The NAB supports the principle that programming favours a South African perspective, subject to market considerations and an incentive-based approach.

South African Broadcast Production Agency

Government should accept that the agency would be ineffective unless it is accorded proper recognition. This may be achieved if government facilitates the recognition of the agency with the regulator.

5. TECHNICAL MATTERS

Spectrum agency

The NAB recommends that the spectrum agency be established as an independent body as stated in the White Paper.

5.2 Digital Broadcasting Advisory Council

The NAB recommends that the South African Digital Audio Broadcasting Association (SADABA) is transformed into the proposed Advisory Council.

Satellite broadcasting

The NAB recommends a light-touch and enabling regulatory environment to assist South African satellite operators to compete internationally.

RESPONSES TO GENERAL ISSUES IN THE WHITE PAPER AND BROADCASTING BILL

1. Cross-media control by newspapers of broadcasters

"No person who is in a position to control a newspaper may be in a position to control a radio or a television licence in an area where the newspaper has an average issue readership of more than 15% of the total newspaper readership in that area (own emphasis), if the licence area of the radio licence overlaps substantially with the said circulation area of the newspaper. Substantial overlap shall be interpreted to mean an overlap by 50% or more. The effect of this is that the newspaper will still be able to acquire or retain a financial interest in a radio or television licence but may not be in a position of control over such licence, if its readership exceeds the prescribed figure. There should be full and extensive disclosure of the shareholding and financial structures of private broadcasting licences." (White Paper, page 40)

Commentary

The NAB draws attention to the fact that the principles which the White Paper has identified in this section merely repeat those principles which were recommended by the Independent Broadcasting Authority (IBA) to Parliament in 1995. Parliament substantially amended the IBA’s recommendations. Neither the White Paper nor the proposed legislation has taken account of Parliament’s amendments to the Triple Inquiry Report which read as follows:

"no person who is in a position to control a newspaper may be in a position to control a radio or television licence in an area where the newspaper has an average ABC circulation of 20% of the total newspaper readership in that area . . . (own emphasis) (Triple Inquiry Report, page 12)

Parliament’s amended recommendations were incorporated into the IBA’s Position Paper on Private Sound Broadcasting and all subsequent licensing of sound broadcasting was based entirely on the amended recommendations.

Parliament decided in 1996 that the words "ABC circulation" be substituted for "average issue readership" and that the recommendation of "15% of total newspaper readership" be amended to "20% of the total newspaper readership in that area".

Recommendation

The NAB recommends that the Parliamentary amendments to the Triple Inquiry Report be retained.

Control over a company by a person who is in a position to control a

newspaper

"A person shall be regarded as being in control of, or being in a position to exercise control over a company if he holds shares exceeding 15% or has other financial interests therein equal to at least 15% of its net assets." (White Paper, page 40)

2.1 Commentary

It is not clear whether this principle applies to cross-media control or to an amendment to paragraph 3 of Schedule 2 of the Independent Broadcasting Authority Act (Act 153 of 1993) ("the Act").

If it applies to cross-media control then it appears that this principle was taken from the IBA’s original recommendation in the Triple Inquiry Report 1995 to Parliament. After consideration, Parliament amended the 15% limit and made the following amendment:

"where the word ‘control’ is used, it should be interpreted as provided for in Schedule 2 to the Act, providing in particular that a 15 – 20% shareholding in radio or television licence shall be deemed to constitute control." (Triple Inquiry Report, page 12)

If the principle in the White Paper is an amendment to paragraph 3 of Schedule 2 of the Act, then it should be noted that the deeming provision has been reduced by 10% and current shareholders in licensees are faced with the prospect of reducing their holdings.

The deeming provision in paragraph 3 of Schedule 2 of the Act relates to a shareholding exceeding 25% of equity shareholding in a company or financial interests therein equal to at least 25% of its net assets.

Why the percentage has been reduced to 15% is not clear. In any event, if the reduction to 15% is accepted, some reason should be advanced for this alteration.

Recommendation

The NAB recommends that the Parliamentary amendment to the Triple Inquiry Report be retained.

3. A single regulator for broadcasting and telecommunications

The White Paper states that appropriate legislation enabling the merger of the two bodies will be tabled in the course of the 1998 parliamentary session and the new regulatory body will commence operations in the 1999/2000 financial year.

3.1 Commentary

The NAB supports the principle of merging the authorities for practical and policy considerations and looks forward to consultations in the drafting of such legislation.

Recommendation

The NAB looks forward to taking part in making input into this important legislative process.

4. Limited resources of the Independent Broadcasting Authority

The White Paper and the Broadcasting Bill impose a range of new inquiries and investigations on the IBA. These inquiries and investigations are critical to the continued development of the broadcasting industry. At the same time, the IBA is preparing for a merger with the South African Telecommunications Authority (Satra). The merger will result in the loss to the IBA of resources and skills. At the same time, according to IBA statements, the organisation’s budget is insufficient to deal with the current workload.

Some of the additional functions of the IBA include the following for which no budget has been allocated or discussed:

A plan for local content carriage by broadcasters to reach a predominant local content in all genres within a period of 10 years;

The viability and impact of community television to consider, among others, issues such as the definition of community television, access to frequencies, sustainability, ownership and control and the legal framework;

An investigation into the limit on foreign ownership of broadcasting licences;

A review on the broadcast of sports by private television broadcasters with a view to maximising the broadcast of developmental sports;

A review of whether the current levels of South African music are appropriate;

An inquiry into advertising to determine whether the hourly limits are set at an appropriate level and whether a lower hourly limit should be imposed on subscription services, as well as the impact of the share of advertising of subscription services;

The introduction of regional television services;

An inquiry into community radio.

These inquiries and investigations will require national public hearings in all nine provinces. As a matter of background, the inquiries which led to the formulation of the IBA’s sound and television broadcasting position papers spanned a period of between six and 10 months with a staff complement almost double that of the current staff level at the IBA.

It is questionable whether the IBA has the capacity and resources to complete this range of work before 2 000.

Therefore, it is recommended that attention be directed at determining whether the IBA is capable of conducting these inquiries within a reasonable time frame as well as the cost to the taxpayer of these inquiries. Policy must prioritise the current work of the IBA and ensure that existing broadcasters and the public are properly serviced. While the IBA should also publicise a report setting out a time frame for the completion of the inquiries, Parliament should, if it accepts the White Paper and the Broadcasting Bill, commit the funds for the proper functioning of the IBA to meet the demands of the new policy framework without prejudicing existing broadcasters and licence applicants.

RESPONSES TO THE POLICY ON COMMUNITY BROADCASTING IN THE WHITE PAPER AND THE BROADCASTING BILL

1. Definition of "community"

The White Paper proposes a change in the formulation of the definition of community broadcasting. It states that community broadcasting must be inclusive and that any common interest must be catered for within the framework of a geographically-founded community radio service. The White Paper further proposes that a secular approach must be adopted towards community radio and maintains that the "structure and mandate of religious services will be redefined to operate within the terms and conditions of the geographically founded community category". (White Paper, page 26)

Commentary

The provision of a broadcasting service to cater for a particular interest is crucial to democracy and the right to freedom of expression in a diverse cultural, linguistic and religious society such as South Africa. Section 31 of the Constitution states that: "Persons belonging to a cultural, religious or linguistic community may not be denied the right, with other members of that community, (a) to enjoy their culture, practise their religion and use their language; and (b) to form, join and maintain cultural, religious and linguistic associations and other organs of civil society…"

Community of interest broadcasters fulfill a need for expression and communication among minority groups who are not served by the public or commercial broadcasters.

South Africa’s population is diverse in culture, religion and language. Abolishing community of interest broadcasters assumes that South Africa has a homogenous society and ignores the diversity of our country. The SABC, as a public broadcaster, cannot reflect this complex diversity or serve the manifold needs of all minority groups. The SABC already faces an onerous mandate in providing information, education and cultural programming to all South Africans in the eleven official languages. It cannot possibly serve the needs of South Africa’s minorities. Community of interest broadcasting therefore strengthens democracy by providing a means of communication for minority groups whose needs the SABC cannot address.

Geographically-defined community broadcasting cannot always represent the interests of a minority, particularly minorities who have different social, religious, linguistic or cultural values. Moreover, in some areas, geographically-defined community broadcasters may replicate services available to some communities while other communities have no choice of services. What is required is a mix of geographically-defined and community of interest broadcasters to contribute to the diversity of expression and dynamism of South Africa’s broadcasting industry.

South Africa is a deeply religious society. Religious broadcasters, particularly those which represent minority religions, provide an important means of communication for communities who are not served by mainstream broadcasters. Adopting a "secular approach" to community broadcasting would deny the right of freedom of expression to the diverse range of religious communities in South Africa.

Community-of-interest broadcasting is internationally recognised. In Australia, Canada, the United States, United Kingdom and France, broadcasters which cater for specific interests are licensed. The Australian regulatory system makes specific provision for community-of-interest as well as geographically-founded community broadcasters. The White Paper prides itself on the "best practice" rule with regard to broadcasting regulation. In this context the proposals relating to the definition of community are questionable when community of interest broadcasting is entrenched in so many countries with regulatory systems similar to South Africa.

Community of interest broadcasters have made significant contributions to community service over the past three years. 69% of temporary community broadcasting licensees were community-of-interest radio stations providing for interests such as rural women, students, Ndebele culture, Chinese culture, minority religions (such as Islam and Hindu), senior citizens, Afrikaner culture, Indian culture, etc.

The White Paper’s assertion that the definition of community of interest broadcasting is unlimited and vague does not take into account the requirements which a broadcasting service must fulfill before it can be licensed. The definition of geographically-defined community broadcasting is also unlimited and vague. The requirements that govern both geographically-founded and community of interest broadcasters are contained in the IBA Act – applicants are required to prove need, support and demand for their services. When the IBA makes a decision on a licence application, these factors apply to both community of interest and geographically-defined applicants in the same manner.

The dearth of geographically-founded community broadcasters results from the low number of applications submitted by geographically-founded communities in the IBA licensing process. Therefore, eliminating community of interest broadcasters or adopting a "secular approach" to community broadcasting will not increase the number of geographically-founded community broadcasters. In fact, this approach will serve to stifle the authentic community of interest voices which have no alternative means of expression.

In any event, it may be that applicants who would have applied in the community of interest category merely disguise their applications to take a "broader" approach. What is needed is the provision of resources to ensure that a greater number of geographically-defined community applicants compete with community of interest applicants for licences in all areas of the country. By taking into account the factors of need and demand, the IBA can licence in a manner which prefers applicants – whether community of interest or geographically defined - who demonstrate the necessity and support for their service in their target community.

The government’s approach should be one of expanding the community broadcasting sector by providing communities with the resources to establish radio stations, rather than restricting the definition of community broadcasting to exclude certain types of community radio who are providing a valuable service. Limiting the number of existing services will not resolve the problem of a lack of services which are geographically-founded or the lack of services in rural areas. This sector can be developed through assisting community radio stations in disadvantaged areas by providing funding and assistance.

Moreover, abolishing community of interest broadcasting will not solve the difficulties presented by the hundreds of applications received for a limited number of licences in the current four-year licensing process. The frequency plan for community radio creates unnecessary limitations because it does not appear to take account of the demographic realities of South Africa. In any event, successful licences will be awarded on the basis of the support, need and demand criteria outlined above.

The IBA has already been through a public process of consultation on community broadcasting which led to a Policy Position Paper on Community Radio. This Position Paper recognises both community of interest and geographically-founded community broadcasting.

The IBA’s community radio process culminated in an invitation for applications for four-year licences. The final set of applications were submitted in March 1998 and over 60% of these applications were from community of interest broadcasters. Aside from the substantive problems (raised above), changing the definition has implications for the licensing procedure of the IBA. The applicants have spent time and resources on compiling and submitting applications to the IBA for consideration but now face uncertainty in the licensing procedure.

The White Paper needs to set out very clearly whether and why public submissions indicated that such drastic action should be taken in amending the definition for community broadcasting. This is necessary because:

Community of interest broadcasting has enhanced freedom of expression;

It has been recognised in the IBA Act and by the IBA in its Position Paper (which was developed after public consultation);

Invitations have been invited for four-year applications and the IBA is compelled by law to hold hearings to consider these applications; and,

The change in definition in community broadcasting will result in thousands of listeners losing a service.

1.2 Recommendation

Community of interest broadcasting must be retained in the definition of community broadcasting to allow for the expression and communication of those interests which are not served by other broadcasting services.

In order to enhance geographically founded community broadcasting services –

particularly those in rural and other disadvantaged areas – resources must be made available to communities to enable them to compile and submit applications for licences.

The NAB supports the view that greater access to resources, expertise and skills is required for the development of community radio, particularly in those areas which are presently unserved by community broadcasting services.

These recommendations above must be implemented in such a manner so as not to delay the current four-year community radio licensing process. Any further delay in this process will cause uncertainty and instability in an industry which is already struggling for survival. It is essential for democracy that, in the run-up to elections in 1999, the community radio industry remains viable. In any event, as applications have already been invited (and submitted) in terms of the IBA Act, the IBA must complete the current process before embarking on a renewed round of licensing.

2. Limitation on national advertising

The White Paper asserts that "the pursuit of advertising revenue can place strains on the delivery of a truly community service". (White Paper, page 26) Therefore, while community broadcasters will not be restricted in accessing local advertising, "national advertising time will be restricted through regulations of the IBA". (White Paper, page 27)

Commentary

The White Paper does not provide any evidence for its assertion that the pursuit of advertising revenue places a strain on the delivery of a community service. Indeed, in making this assertion, the government misunderstands the nature of a community service. A community service is viable only if it serves its niche community. In adopting an approach which attempts to maximise revenue while ignoring the needs of its community, a community radio station would pit itself directly against established commercial radio stations.

This would result either in the failure of the community service (in the context of much stronger competition) or a contravention of its licence conditions, or both. Therefore, serving the needs and interests of the community is central to a community radio station’s survival – within both the competitive and the regulatory environment. At the same time, community radio stations, like the public broadcaster, need to balance their community mandate with their financial viability as they operate in a context where survival depends on attracting advertising revenue.

The White Paper provides no reasoning behind the decision to restrict "national", as opposed to other types of advertising. Moreover, it fails to define what "national advertising" means. For example, is an advertisement for second-hand cars placed by a local Toyota dealer in Pietersburg a local or a national advertisement? Is a special discount introduced by a Pick ‘n Pay branch in Cape Town a local or a national advertisement? In both examples, local franchises of national businesses are offering a deal which is specific to the local community.

Even if the government has a workable definition in mind, it is difficult to understand how such a limitation could be enforced. The IBA’s Monitoring and Complaints Department is already responsible for monitoring compliance with licence conditions by over 100 broadcasters. Both the desirability and the feasibility of such a limitation are therefore questionable.

The White Paper acknowledges that some community radio stations have "buckled under the financial strain of maintaining the service with limited resources" and that community services "who do not have access to funds are living from hand to mouth". (White Paper, page 26) In this context, limitations on national advertising will place an additional financial burden on community services. The reduction in revenue caused by such limitations will reduce the capacity of community radio stations to offer a truly community service, for example, live coverage of community events, training of volunteers, establishment of a community news service, and all other activities which have high cost implications.

National advertising is placed by businesses which have the financial resources to sponsor programming or assist community broadcasters by other means. Local franchises of national companies bring economic benefits to community radio services in two ways: 1) they are in a strong financial position to provide sponsorship and advertising necessary to the funding of the service; 2) because they are based within the community, they form part of the local community and are in a position to build partnerships with the community radio station. To exclude national advertisers from community radio would deny communities a significant and often vital source of income from businesses operating within the community.

As an example, a network of campus radio stations is currently relying on a package of national advertising which provides over 50% of the participating stations’ income. The package deals offered to national advertisers benefit campus stations in rural and poor areas, who otherwise would be unable to attract the advertising income necessary to sustain their services.

A limited local adspend capacity exists in some communities where community radio stations have to compete with other community media for the advertising expenditure of local businesses. This results in insufficient advertising income from local sources.

Advertising of any kind is, in itself, a community service as it provides marketing opportunities for local businesses and therefore information for local consumers.

The restriction on national advertisements results from a misunderstanding of the nature of community radio. In assessing whether to regulate advertising, the only reason for imposing limits should be to ensure fair competition. This is clearly not the objective of the restrictions proposed in the White Paper. As the White Paper has not sufficiently analysed the nature of community broadcasting, its conclusions are questionable.

NAB represents all but one commercial radio broadcasters who are concerned about the proposed restriction on national advertising for community broadcasters. The commercial radio sector is engaged in forming a radio advertising bureau which will attract advertisers to radio as a medium. The imposition of restrictions on community radio will create uncertainty as advertiser will not know whether their advertisement is "local" or "national". This will impact negatively on the attitude of advertisers towards radio as a whole. It should be emphasised that neither policy nor regulations can determine the volume of advertising for a sector of the broadcasting industry. If the White Paper’s objective is to reserve advertising expenditure for private and public radio, its intention is misconceived.

2.2 Recommendations

In order to remain viable, community radio stations need to attract advertising revenue from small businesses as well as national advertisers.

Restrictions on the type of advertising a radio station may attract are not an effective way to ensure that a community radio station maintains its community service mandate. On the contrary, a reduction in the sources of revenue available to a community radio station could have the effect of limiting it from fulfilling its mandate and entrenching itself in the community. A viable service is also poised to make financial contributions to community projects and to locate itself as the hub of the community. The licence conditions of community radio services clearly set out their obligations and compliance with these licence conditions must be monitored by the regulator to ensure that the community service mandate is fulfilled.

The nature of modern economics militates against any reliable distinction between local and national advertising. In any event, the resources used to monitor compliance with such a slippery concept could be put to better use in assessing the extent to which community radio stations deliver on their mandate.

3. Sharing of frequencies

The White Paper acknowledges that sharing of frequencies is frustrating for both community services and their audiences and hampers the development of audience loyalty.

Commentary

Frequency-sharing was implemented during the temporary community broadcasting licence period in areas where frequencies were scarce. While the sharing services were compatible in some cases, many of the sharing arrangements were fraught with conflict and limited the development of a loyal listener basis.

Recommendation

It is recommended that frequency-sharing be avoided unless the arrangement constitutes a self-initiated and voluntary agreement between two services.

4. Reserving frequencies for the community sector

The White Paper recommends "the setting aside of frequencies specifically for the maintenance and expansion of community broadcasting". (White Paper, page 27)

Commentary

As the IBA has already set aside specific frequencies for community broadcasting, it is not clear whether the White Paper is endorsing the current situation or proposing additional frequencies for community radio.

The frequency allocation undertaken by the IBA appears not to take into account the diverse nature of community radio services and the fact that services may cover more than one of the demarcated coverage areas. The manner in which frequencies have been allocated severely limits the number of licences.

Recommendation

The NAB supports the setting aside of frequencies for specific broadcasting categories within an orderly frequency management system which takes account of the diverse nature of the community broadcasting industry.

The current community radio frequency plan should be urgently reviewed and the industry consulted prior to the publication of the plan.

5. Lower signal distribution rates for the community broadcasters in needy areas

The White Paper proposes that community broadcasting stations in needy areas will pay less than the normal rates for signal distribution services. The IBA will be required to report to government on the tariff structure.

Commentary and Recommendation

The principle of reduced signal distribution fees for community radio stations is accepted. Care should be taken to avoid creating circumstances which benefit one sector and deprives other signal distributors of remaining viable.

6. The Community Development Trust

The White Paper proposes a Community Development Trust which will administer funds provided by the government for the purposes of assisting poor communities to establish community broadcasting services. The trustees will be appointed by government. Government will further be involved in assisting the community sector "to interact more effectively with other development agencies and facilitate the beneficial work they are doing in the different communities". (White Paper, page 27)

Commentary

The establishment of a Community Development Trust is important in empowering poorer communities to establish community broadcasting services. Until now, the IBA Act has enabled communities to apply for broadcasting licences but the resources required to do so have been lacking. This Trust will provide the necessary resources to develop the community radio sector in underserved areas.

The White Paper proposes that the Government will appoint the trustees of the Trust. Considering the importance of broadcasting in developing and maintaining freedom of expression, the direct involvement of government in appointing Trustees is a matter for concern. This is not the domain of government. While the government may facilitate the formation of the Trust it should not appoint trustees.

Moreover, the relationship between the Trust and the regulator is not spelt out in the White Paper. It is therefore unclear what would happen if the Trust decided to fund an applicant who is subsequently denied a licence by the regulator. The constitution, appointment, terms of reference, operation and procedures of the Trust need to be set out clearly to avoid any perception of government influence or involvement in the licensing and/or control of community radio services.

Recommendation

The NAB welcomes this proposal and looks forward to discussing the formation of this trust which, it is recommended, take account of the following:

the appointment of trustees should be independent of government influence;

the terms of reference of the trust;

a structured relationship among the trustees, the government and the regulator; and,

the test to be used for providing funds.

7. Handling of surplus funds

The White Paper proposes that "all surplus funds emanating from the running of the broadcasting station will be ploughed back to the benefit of the particular community and monitored by the regulator". (White Paper, page 27)

Commentary

The IBA Act, the IBA Position Paper on Community Radio and the licence conditions require that surplus funds be used to the benefit of the community or expended on improving the community broadcasting service.

Recommendation

The government should be requested to clarify whether its statement merely endorses the status quo or whether it is proposing other conditions with respect to the use of surplus funds. Specifically, it should be made clear whether this proposal implies that surplus funds may not be invested in developing the community broadcasting service.

8. Government assistance training programme

The White Paper states that "community broadcasters will access the government assistance training programme to develop their broadcasting trainers". (White Paper, page 27)

Commentary

The Chapter on Community Broadcasting does not specify what is meant by the government assistance training programme. It may be that this is a reference to the broadcasting school proposed elsewhere in the White Paper. In any event, it is not clear what is meant by this proposal.

Recommendation

The NAB welcomes any training proposal aimed at developing the community broadcasting sector and looks forward to further discussion to clarify the following issues:

the needs of community broadcasters with regard to training;

the relationship between community broadcasters and the proposed training institutions; and,

the structure, mandate, constitution, funding and operations of such training institutions.

RESPONSES TO THE POLICY ON COMMERCIAL RADIO IN THE WHITE PAPER AND THE BROADCASTING BILL

Expanding the broadcasting industry

"Government is taking direct initiatives to expand the commercial broadcasting sector so as to stimulate investment, growth and provide employment opportunities." (White Paper, page 21)

Commentary

As no information is provided about the measures which government is contemplating, no response can be provided. However, measures which stimulate the growth of the industry are welcome. The industry would be well-served if stakeholders are consulted prior to the adoption of measures which require implementation by private broadcasters.

Recommendations

The NAB recommends that government provides details about intended measures to grow the industry so that stakeholders can assist in ensuring the success of the intended measures.

Meeting defined population coverage goals

"Private broadcasters would be required to meet defined and realistic population coverage goals." (White Paper, page 21)

Commentary

Generally, the meeting of population coverage goals does not apply to private sound broadcasting services. This requirement applies to private and public television and to coverage goals for the public broadcaster’s radio services. As all private radio licences are regional, applicants for the licence are immediately aware of the coverage area and no further expansion is sought or attached to the licence. The public broadcaster has national sound broadcasting licences and therefore is obliged to ensure sufficiently significant population coverage.

2.2 Recommendation

If government intends to alter the current broadcasting environment in respect of requiring that private broadcasters expand their coverage areas, broadcasters must be consulted as their costs will be increased. In any event, such a proposal can only affect future broadcasters as current broadcasters’ licence conditions do not require expanded coverage.

3. Covering neglected areas

"The private broadcasting network should be expanded to cover neglected geographic areas and programming needs." (White Paper, page 23)

3.1 Commentary

The White Paper does not acknowledge that any such expansion of the sector must be based on viability. The areas of programming needs referred to may well be those which do not draw the audience markets necessary to attract advertisers. Moreover, public service radio and community radio – both community of interest and geographically founded – provide programming for underserved audiences.

The viability of a service is dependant on drawing audiences through compelling and distinctive programming. In addition, advertisers must want to market their goods to the particular audiences which the service attracts.

The "expressions of interest" outside of the metropolitan areas appear to give latitude to potential broadcasters to identify underserved areas and to apply for licences after the regulator publishes invitations for licences in these areas.

3.2 Recommendation

Any expansion of the private radio network (by granting additional licences) must be based on economic feasibility. The NAB welcomes the proposal to expand services outside the metropolitan areas and urges that government considers significantly reducing public service obligations to assist broadcasters in these areas. Very light regulation is recommended.

4. Prioritising free-to-air services

"Public policy must prioritise the provision of free-to-air services, and in the first place, radio services, for the extension of services." (White Paper, page 21)

4.1 Commentary

The government acknowledges that the introduction of new television services is dependant on the viability of the public and private broadcasters. This principle is as important to the radio industry. As South Africa’s radio market is small, radio services are compelled to target their programming to audiences which are attractive to advertisers. The fact that surveys show a need for a particular format is not necessarily a recipe for financial success.

4.2 Recommendation

Prior to the introduction of new radio services, the following factors should be evaluated:

existing services in the market;

the growth of advertising in this sector;

advertising market share of the radio services; and,

successful formats.

5. Ensuring viability of broadcasters

"Government wishes to ensure the viability of both the public and private broadcasters before new services are introduced." (White Paper, page 21)

5.1 Commentary

How will this be done? What criteria or factors will guide the government in making this decision? Why is this a decision of the government and not the regulator? Under the guise of policy, government will limit or open the market. The factors or criteria for limiting or opening the market should be known by the industry. For example, the invitation to apply for a defined licence in a particular area should be preceded by industry and public input into whether such a licence will be viable. Consultations with the industry and potential entrants should determine whether and to want extent the proposed licences will be viable and how current broadcasters will be affected.

5.2 Recommendation

Either government or the regulator should ensure consultation with the public prior to the invitation to apply for new licences. Therefore, the invitation should be based on the extent of competition that will be tolerated in a market as well as the gaps that are intended to be filled by the new service.

6. Adding new services

"New services should be added to increase diversity in the programming mix available to the public in a manner such that the ability of existing services to meet their public service obligations will not be unduly jeopardised." (White Paper, page 22)

6.1 Commentary and Recommendation

The same considerations and reasoning outlined in the paragraph above apply to this proposition.

7. Addressing disadvantaged and minority groups

"The private radio sector must provide diverse services addressing a wide cross-section of the South African public, particularly disadvantaged and minority groups; provision of programming should be directed specifically to all of South Africa’s official language groups; private broadcasting should reflect the culture, character, needs and aspirations of all the peoples of South Africa’s provinces and meet the special requirements of the regions, at the time that regional services become available, by developing a sense of regional identity; private broadcasting is expected to contribute to the development of pro-social values by providing programmes of specific interest to all ethnic groups, men, women and persons with disabilities as well as portraying them in programmes of general interest; private broadcasting should also provide children’s programming." (White Paper, pages 21 and 22)

7.1 Commentary

Private radio operates on the basis of tight formatting for niched audiences and does not provide, in general, full-spectrum programming. Provision of programming for disadvantaged and minority groups is specifically catered for through the mandate of public service radio, as well as community radio. Private radio stations select the language of broadcast on the basis of the preferred language of their target audience and this is based on commercial considerations.

7.2 Recommendation

The NAB is of the opinion that the commercial imperatives of private radio stations dictate programming and format.

8. Obligations on private broadcasters

"In broadcasting news and information programmes it is expected that private broadcasters will provide in-depth reporting and discussion on matters of national significance such as general elections and national commissions and inquiries." (White Paper, page 22)

8.1 Commentary

Not all formats are suited to this type of news and information coverage. All private radio stations comply with a minimum news requirement set out in their licence conditions and which carries cost implications.

8.2 Recommendation

Private radio stations should be permitted to provide news coverage which suits their particular format and audiences.

9. Employment of the historically disadvantaged and minorities

"Private broadcasters must provide an appropriate level of employment to the historically disadvantaged and to minorities." (White Paper, page 22)

9.1 Commentary

Broadcasters must know in advance the "appropriate level" of this employment and the industry should be consulted prior to pegging any level. In terms of broadcasters’ current licence conditions, promises of performance include proposals for training and development. These promises are integral to licence conditions. As they carry significant costs, this is an indication of the broadcasters’ social commitments. Training and development of historically disadvantaged and minority communities are firmly on the licensing agenda.

9.2 Recommendation

If the government intends to alter the current rules relating to training and development of the historically disadvantaged and minorities, the competitive application procedure will also be affected. Government should clearly explain its intention, stating whether and why it is not satisfied with the existing employment policy and what alternatives it proposes. Generally, the NAB favours government consultation with the public and stakeholders prior to changing the current licensing criteria relating to the employment of the historically disadvantaged and minority communities.

10. Levels of foreign ownership

"The government will request the IBA to investigate and to report on the appropriate level of foreign ownership." (White Paper, page 22)

10.1 Commentary

It is not sufficient that the government drafts a proposal on the issue of the appropriate level of foreign ownership which it will publish in the Government Gazette and then request public comment. The investigation of the IBA should be made public so that the industry can understand and reflect on the reasons which lead the IBA to make certain recommendations.

The industry should not be expected to respond to recommendations without being given the details of the investigation. As this investigation is not confidential, the industry should be made aware of the basis on which the recommendations are made. The industry should also take part in making recommendations on the criteria to be used to determine effective control and to ensure that effective control is held by South Africans.

10.2 Recommendation

The industry welcomes the possibility of increasing the level of foreign ownership in broadcasting services. The industry is keen to take part in the inquiry and urges government to make all information available to the public so that informed input may be provided to all aspects of the investigation. Therefore, any investigation by the IBA should be disclosed to the public for comment prior to the publication for comment of proposals on ownership and control.

11. Review of the recording industry

"The government will ask the Portfolio Committee on Communications and on Arts and Culture to undertake a review of the Sound Recording Industry in South Africa… Following the review, the Government may ask the Regulator to review whether the current levels of SA music are appropriate and whether there is need for any other contribution by the radio industry." (White Paper, page 23)

11.1 Commentary and Recommendation

As a matter of principle the public and stakeholders should be encouraged to take part in these reviews. The local content regulations already state that the IBA will review the regulations within three years after coming into effect with the intention of raising the quota for some or all categories of broadcasting licence.

12. Favouring South African programming

"Policy should ensure that choice of programming should favour South African programmes." (White Paper, page 25)

12.1 Commentary

Choice of programming is audience-driven and needs advertising support which is demand-driven. Sound broadcasters are already obliged in terms of their licence conditions to ensure that they broadcast a minimum quota of local music.

12.2 Recommendation

This matter is a regulatory imperative in the licence conditions. At this stage no changes should be made unless after consultation with the public and stakeholders.

13. Licence categories

"There will be a separate class of licence for each broadcasting activity. If a broadcaster wishes to operate in another category, the broadcaster must seek a licence and be bound by the conditions of that class category." (White Paper, page 22)

13.1 Commentary

At present, all broadcasters require a broadcasting licence for the purposes of provision of a broadcasting service, and a signal distribution licence in those cases where the broadcaster distributes its own signal. It is therefore not clear what this proposal in the White Paper refers to.

13.2 Recommendation

The NAB requests further information from the government to formulate an adequate response.

14. Competition among signal distributors

"As a way of promoting fair competition there will be a separation between broadcasting licensees and signal distribution licensees. Vertical integration between broadcasting and signal distribution licensees will be discouraged to draw investments into the signal distribution sector and also to introduce new players and services." (White Paper, page 22)

14.1 Commentary

On the one hand, this increases the opportunity for competition in the signal distribution sector. On the other hand, if this is limited to broadcasting licensees, the objective could be undermined through the entry into signal distribution by telecommunications operators who have greater financial muscle than individual signal distribution services.

14.2 Recommendation

Vertical integration should not in principle be denied. It should be assessed on a case-by-case basis.

RESPONSES TO THE POLICY ON COMMERCIAL TELEVISION IN THE WHITE PAPER AND THE BROADCASTING BILL

1. The issuing of new licences

"The Government favours the expansion in the number of free-to-air television stations via the awarding of additional private licences. At the same time it recognises that the system will take some time to adjust to the arrival of the new player and the changes to the structure of the SABC’s television services. It will therefore direct the Regulator to monitor the development of the industry and make recommendations to the Minister as to the appropriate time for the issuing of further licences. The Minister will then decide if it is appropriate to issue a call for licences." (White Paper, page 23)

1.1 Commentary

The NAB supports the principle that developments in the industry must be monitored and analysed prior to the decision to grant further television licences. The regulator’s involvement in this process should not exclude industry and public participation which will ensure that all the relevant information is made available to the regulator. The role of industry and representative organisations should be more than mere conduits to furnish the regulator with information, and should involve extensive consultations.

It remains necessary for industry representatives to furnish all relevant information about market developments mainly so that the regulator can avoid repeating the market error it caused in 1995 during the publication of the Triple Inquiry Report ("the Report"). As a matter of background, the Report demonstrated that the broadcasting market was unable to support a viable private national television station.

On this basis Parliament was urged to adopt a plan to sell off an SABC channel so that a private national free-to-air entrant could provide a commercial service. That market study was later discredited and on the basis of new information which proposed entrants furnished to the IBA, as well as other information, it was concluded in November 1996 that the broadcasting market was poised to grow. The new information also indicated that a private national channel was likely to be viable and profitable, given certain conditions. The final market study was published for use by applicants for the private national free-to-air licence. Significantly, every applicant endorsed the IBA’s market prediction for the new service.

As a result of the inclusive approach, the IBA formulated public service obligations which were within the tolerance of the new television service and which took into account the viability of the SABC.

The NAB is concerned about the proposal regarding the regulator’s recommendations to the minister for the following reasons:

The industry appears to have been excluded from being consulted prior to the regulator making its recommendations to the minister;

The White Paper does not include the possibility of the regulator making its study and recommendations available to the public for discussion;

Public participation in policy formulation is excluded;

The White Paper contains no clear policy or criteria which will guide the minister in making a decision to adopt or delay the recommendations of the regulator;

The regulator’s recommendations may be subject to the whim of the minister.

1.2 Recommendations

Subject to the overall recommendations of transparency and consultation, all decisions affecting the industry and which impact on the market should be the subject of consultation with the industry. Therefore, the industry should be continuously involved with the regulator’s study of the market. In addition, the regulator should publish for public comment its full report and recommendations to the minister. The industry and the public should have access to all submissions/representations made by other interested parties.

Prior to the minister taking any decision on the regulator’s report and recommendations, public / industry comment should be sought.

The minister’s decision to adopt, delay or reject the regulator’s recommendations should be subject to policy guidelines which include:

The recommendations should be generally based on empirical information which is objectively verifiable and which information is available to the public; and,

The new licences are subject to competition legislation; and,

The minister makes available all the information which motivates his/her decision relating to new licences; and,

The public / industry have been given a reasonable opportunity to provide the ministry with all the relevant information prior to the minister’s decision; and,

The public/industry have access to submissions made to the minister by all interested parties.

2. Time table for local content

"The Government will direct the regulator to formulate a strategy to achieve a broadcasting system which is predominantly South African in content. The Regulator should include a timetable to meet this requirement. In no case should this period be more than 10 years." (White Paper, page 23)

2.1 Commentary

The NAB unequivocally supports the initiative to develop the local content industry. Local content serves to promote and develop the cultural identity of a nation. Cultural products are designed to reflect the life and images of the nation and to set in motion the necessary impulses that promote the conditions for nation-building and nationhood. This sense of national identity and pride which cultural products serve to affirm are considerably enhanced as the flow of programming is gradually reversed so that quality local programming more and more displaces foreign images and local programming exports outnumber foreign imports. The conditions which create the aforementioned circumstances may include:

the capacity of the local industry to provide a regular and continuous flow of programming; and,

the demand for local programming by audiences of all income groups; and,

the availability of financial resources for producers.

These conditions ultimately will determine whether the 10-year period is sufficient for the reversal of the programming emphasis from foreign to local. Moreover, the interest in foreign programming is an audience demand that broadcasters ignore at their peril.

In formulating any strategy to increase the level of local content, broadcasters’ viability is paramount. The fundamental principles of cost and affordability must guide any strategy to increase the level of local content. In addition, unless audiences demand particular genres of local programming, broadcasters will lose audiences and advertising.

The proposition that high-income audiences in large numbers drive broadcasting revenues is the basis of business success. Unless this commercial imperative is acknowledged by government, it is unlikely that broadcasters or investors can prosper. The initiative to increase the levels of local content beyond the market tolerance will push high-income audiences in large numbers to satisfy their entertainment needs in the multi-channel satellite environment. By foisting unrealistic local content levels on a developing market, free-to-air broadcasters will lose premium audiences and become the ghettos of the broadcasting environment.

Until local content reaches affordable levels compared with foreign programming and until local programming meets audience satisfaction, policy or regulations compelling quotas would be ruinous to broadcasting enterprises.

It would be ludicrous if government policy insisted that broadcasters (as sellers) must flight (stock) certain programming (products), notwithstanding the demand from audiences (customers). Interventionist regulation or policy may be either a sledgehammer to beat broadcasters into submission and ruin, or a scalpel that skillfully cuts out the barriers to the production of quality local programming at affordable levels.

2.2 Recommendations

The NAB accepts the 10-year period as a guideline to focus on the development of local content but recommends that audience demand and quality programming remain the essential ingredients for successful broadcasting enterprises.

The drafting of any local content time-table by the regulator must include public and transparent consultation with the industry generally and broadcasters and producers specifically.

The time-table can succeed in those areas in which audiences already demand local content programming and for which the local capacity already exists, for example, children’s programming, game and talk shows, etc.

However, foreign-generated movies, sit-coms and dramas are popular drivers which attract audiences and advertisers. Therefore, the time-table for these genres may be much longer than those mentioned above. Policy should distinguish what can be achieved within the time-table (measurable targets or quotas) and what is likely to fall outside the time-table but should be encouraged to happen through various government initiatives and other means (broad objectives or goals).

3. Developmental Sport

"The Government will also instruct the IBA to review the broadcast of sports by private television broadcasters, both free-to-air and subscription, with a view to maximising the broadcast of developmental sports." (White Paper, page 23)

3.1 Commentary

The NAB supports the policy of increasing the broadcasting of developmental sports.

3.2 Recommendation

As the White Paper does not define the concept "developmental sport", the definition should be formulated in consultation with the industry, the regulator, the ministry and the relevant representative sporting codes. Moreover, "developmental sport" should be included as a programming genre for the purposes of setting minimum local content levels.

4. Priority access to the advertising cake

"Since free-to-air services provide the greatest social contribution to the largest number of South Africans, they should have priority access to the advertising cake." (White Paper, page 23)

4.1 Commentary

NAB members may wish to make further individual submissions on this matter. However, regulating the maximum number of advertising minutes that may be broadcast on one broadcaster does not provide other broadcasters with a greater share of advertising. The proposition that the limiting of advertising minutes in certain categories of broadcaster gives other broadcasters a greater share of the advertising market is not necessarily true.

Most broadcasters’ sell-out times (except for peak time) are usually much less than the average maximum minutes permitted under the current regulatory system. Neither government policy nor regulation of the maximum advertising minutes per hour can determine broadcasters’ share of advertising – it is advertisers who choose where and how they want to spend their budgets.

Internationally, the purpose of this regulatory technique is usually to ensure that broadcasters do not over-commercialise their services and that the advertising minutes fall within the audience tolerance threshold.

4.2 Recommendations

The NAB recommends that the public and industry be consulted prior to reducing or prohibiting broadcasters’ revenue streams.

5. Review on hourly limits

The White Paper states: "The regulator will review the hourly limits on advertising for free-to-air stations to determine whether they are set at an appropriate level every two years." (White Paper, page 23)

5.1 Commentary

In principle, the NAB supports regular reviews of all restrictive measures. The purpose of the reviews should be to determine whether the measures under review are required. Reviews also entitle broadcasters and the public to take part in making input into the effectiveness of restrictive measures and to give the regulator an opportunity to reduce or withdraw such measures. In rare instances, the regulator may, depending on the circumstances, maintain or impose harsher regulation as necessary interventionist measures to assist development in the industry.

Generally, limits on advertising limits may be set provided that the revenue stream of broadcasters is not prejudiced.

5.2 Recommendation

For the sake of completion and to avoid uncertainty, the NAB recommends that the purpose of any review, particularly a review on hourly advertising limits, should be to open the market and give broadcasters more opportunities to generate stronger revenues. The policy consideration underlying regulatory reviews should always be to assist broadcasters so that they can continue to provide popular and public-interest quality programming.

6. Advertising limits on subscription services

"The regulator will further review whether the share of advertising revenue by subscription services is appropriate and not detrimental to the survival and viability of the free-to-air services. It will consider whether a lower hourly limit should be imposed upon subscription services." (White Paper, page 23)

6.1 Commentary

The issue of whether pay television should enjoy advertising or a limit on advertising is a matter for public debate and discussion. In this regard, the NAB supports the review of this matter by the regulator on condition that the public and industry are given a reasonable opportunity to take part in formulating policy proposals and options. Without public participation, both the process and the content will lack the rich range of views and information so necessary for any regulator.

6.2 Recommendation

While the NAB supports the review by the regulator, the organisation recommends that the principle of public and industry participation be paramount in the formulation of policy on the possibility of advertising limits for pay television.

7. Local content obligations

"As part of their licensing conditions, broadcasters are required to commit some air-time to local content programmes or contribute a percentage of their revenue towards the production of local content." (White Paper, page 24)

7.1 Commentary

This proposition is already contained in the IBA Act and regulations, and all broadcasters’ licence conditions demonstrate commitment to local content. The NAB assumes that the government is confirming the current environment.

It should, however, be noted that the commitment of "some" air-time to local content (as well as a percentage of revenue) remains problematic in the light of government’s instruction to the regulator to provide a timetable for the achievement by all broadcasters of predominantly South African programme content within a 10-year period.

The industry cannot grow in an atmosphere of uncertainty, rapidly changing rules and vague statements. "Some" local content is vague. It would appear that the local content levels in the South African Television Content Regulations (for television) and the South African Music Content Regulations (for sound broadcasting) provide clear limits within which broadcasters must comply.

The White Paper, while acknowledging the current statutory provision relating to local content, is silent on the South African Television Content Regulations and the South African Music Regulations. Therefore, the NAB assumes that the government does not intend to change the regulations.

The NAB believes that the objective of broadcasting predominantly South African programming will promote nation-building and contribute to forging a common national identity. The broadcasting of quality local content serves the purpose of attempting to reverse the flow of programming and has significant economic benefits. On this basis, the NAB endorses the following observation in the White Paper:

"It will be a policy position that the South African broadcasting system should display a predominantly South African content." (White Paper, page 25)

7.2 Recommendation

The NAB recommends that no changes be made to the current local content regulations unless the public and the industry are consulted.

8. Local Content Funding

"Policy should support the funding of local content production." (White Policy, page 24)

8.1 Commentary

The White Paper is not clear on whether this funding proposal refers to funding provided by government or funding provided by the industry via a levy. If funding is expected from the industry, the NAB supports the principle of local content funding provided that cost and affordability on the part of the industry, as well as broadcasters’ current licence obligations, are taken into account. If funding is to be made available by the government, the NAB acknowledges and supports the proposed government initiatives to develop local content.

Recommendation

No further recommendations are required, pending a public inquiry on the regulator’s proposed time-table.

9. Local content in a multi-channel environment

"A properly regulated multi-channel environment, promoting South African content, will increase the demand for local content and offer more economic opportunities to the producers." (White Paper, page 24)

9.1 Commentary

While a multi-channel environment increases the possibility of significantly more air-time for a broad range of programming which appeals to particular audience segments, the demand for local content programming does not necessarily increase. More channels offer the opportunity for broadcasting more local content but it is doubtful whether the country has the capacity to produce high levels of local content at affordable and competitive prices and that audiences will buy channels which offer high local content levels.

Compelling broadcasters to allocate air-time to high local content levels or levels which are out of proportion to audience demand, skills, costs and capacity of the sector to supply a continuous stream of programming, will impoverish the broadcasting environment. An affordable supply of programming must at least match the audience demand; foisting programming on unwilling audiences would make the service unprofitable.

The White Paper acknowledges the problems identified by the NAB. On Page 25, the government says:

"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."

9.2 Recommendation

The NAB urges the government to reconsider its view on local content in a multi-channel environment. While the NAB supports the principle of increasing local content levels, this objective should not be permitted to prejudice the fragile revenue streams of broadcasters. Therefore, the NAB requests that the government initiates a public inquiry into local content levels in a multi-channel environment.

10. South African programming perspective

"Policy should ensure that choice of programming should favour South African programmes. Policy should encourage the presentation of entertainment, educational and informational programming from the South African perspective." (White Paper, page 25)

10.1 Commentary

The broad analysis relating to the underlying consideration on which local content programming is based is set out in the preceding paragraphs.

In designing a broadcasting landscape that will accommodate the converging technological initiatives, policy should not conflict with market imperatives. Policy should, as the White Paper states, encourage rather than compel. Where market intervention is necessary, policy considerations should create the conditions for change through incentive-based rather than coercive measures. Moreover, policy cannot ensure that South African audiences will choose South African programmes over foreign-generated programming.

10.2 Recommendation

The NAB supports the principle that programming favours a South African perspective, subject to an incentive-based approach and market considerations.

11. South African Broadcast Production Agency

"A South African Broadcast Production Agency will be established to support and promote local content production in radio and television." (White Paper, page 25)

11.1 Commentary

The NAB welcomes the proposal for the formation of the agency. It is only by increasing the quantity and quality of local content available in the market that broadcasters will be able to flight more South African programmes which draw audiences and therefore maximise revenues. The formation of the agency should precede any change to the local content environment. If this agency is to play a significant role in contributing to broadcasting, it is necessary that the agency be accorded recognition by the regulator and the ministry.

As the government has ruled out statutory recognition for the agency, policy should dictate the existence of a bi-lateral relationship with the regulator.

11.2 Recommendation

Government should accept that the agency would be ineffective unless it is accorded proper recognition. This may be achieved if government facilitates the recognition of the agency with the regulator.

RESPONSES TO THE POLICY ON TECHNICAL MATTERS IN THE WHITE PAPER AND THE BROADCASTING BILL

1. Spectrum Agency

It is evident from provisions of the Broadcasting Bill 1998 ("the Bill"), that the Bill is at odds with the White Paper. According to the Bill, a Frequency Spectrum Directorate is established within the Department of Communications and this agency is expected to function impartially.

The White Paper stated that the government proposes that a Spectrum Management Agency be established, by Parliament, within the portfolio of the Minister for Communications. The NAB fully supports the White Paper and requests that the provisions of the Bill be redrafted to accommodate the intention of the White Paper.

The NAB is aware that the proliferation of portfolio organisations may become cumbersome. However, the NAB is convinced that the importance of this agency should be reconsidered.

One of the vital functions of this agency is to allocate spectrum and in so doing to strike a sensitive balance between, on the one hand, the market imperatives of scarcity of frequencies and their maximum efficient use, and on the other hand, the democratic imperative of entrenching a range of diverse images and voices in the public interest. This delicate balance is best served by an agency which remains independent of both government and the industry and stakeholders.

The NAB also draws attention to the following changes:

The proposed statutory provisions provide for the establishment of a directorate within the Department of Communications; the impression created in the White Paper is that the agency will be established by Parliament.

It was not intended that this agency would be a directorate within the Department of Communications. The NAB’s impression from a reading of the White Paper is that the agency would, like the IBA and SATRA, report to the minister as one of the portfolio organisations and not that the agency would be a directorate within the Department.

In the circumstances, the NAB requests that the government reconsider locating this agency within the Department.

Digital Broadcasting Advisory Council

The White Paper announces that the government will direct the Department of Communications to establish a Digital Broadcasting Advisory Council. The technological issues which the Council will consider will include the suitability of competing transmission standards to South Africa’s spectrum plans, and other radio frequency engineering issues. The White Paper’s time frame for the presentation of its first report is December 1999.

The NAB is particularly keen to take part in the management and activities of this council as it needs to share its members’ special expertise and contribute to digital broadcasting in South Africa. The NAB also wishes to play an active role in developing digital law in the country.

Through the South African Digital Audio Broadcasting Association, a wide range of digital sound broadcasting issues are being examined intensively. The inclusion of digital television broadcasting will create precisely the Council which the White Paper proposes.

The NAB recommends that the Ministry directs that this association be transformed into the South African Digital Broadcasting Advisory Council and that the Department of Communications nominate such other persons to join the board of this association.

The NAB looks forward to further discussions on this matter.

Satellite broadcasting

The NAB welcomes the White Paper’s attempts to clarify the confusion surrounding satellite broadcasting, especially as South African entrepreneurs begin to poise themselves to take part in the rapid international technological developments.

Within the context of the globally competitive environment, the NAB is strongly in support of South Africans entering the satellite broadcasting market and competing with international satellite broadcasters for audiences in Southern Africa.

As South Africans are entering this market later than their international competitors who have significantly more resources, the NAB requests Government to extend its support for broadcasters into the satellite market.

As spectrum for satellite broadcasting is plentiful, unlike scarce terrestrial frequencies, a light-touch enabling regulatory environment will best serve South Africans who wish to enter this highly competitive market which is dominated more and more by foreign broadcasters.

Enabling regulation will contribute to reducing the barriers to entry for new broadcasters and will allow South African producers more exposure and opportunities. The NAB notes that subscription licensees would not be permitted to have larger advertising than subscription revenue streams. The intense competition for the small and limited subscriber base in Southern Africa will increase as international competitors enter the market. A light touch enabling regulatory environment can be a local incentive for South Africans to challenge foreigners who want to dominate our markets.

One of the difficulties of regulating South African satellite broadcasters is that foreign broadcasters can easily escape the regulatory net and would therefore enjoy unfair advantages.

In these circumstances, the NAB requests that local content and other licensing conditions be reduced to a bare minimum until such time as South African satellite broadcasters can maintain viability against foreign competition.

The NAB also draws attention to Section 4 (3) of the Bill which refers to the signal of a broadcaster "which is incidentally received in South Africa" and would, as a result, not be required to hold a licence. Assuming that these words refer to spillage, it should be noted that "spillage" constitutes a significant part of the footprint of satellite transmission. The entire Southern Africa can constitute a signal "incidentally received in South Africa".

This would mean, in effect, that broadcasters can uplink outside South Africa, if only to escape the net of regulation and that they need not be licensed because their signals are incidentally received in South Africa. At the same time, licensed South African satellite broadcasters would be subject to the regulatory regime and be forced to compete with signals "incidentally received in South Africa" and which signals are unlicensed for that reason alone.

Use of media technology for education

The NAB strongly supports the view that broadcasting services play a role in contributing to the development of education. NAB members are keen to participate in this process and would welcome the opportunity to be involved in the educational task team’s attempts to formulate viable plans.

Multi-channel delivery system

The NAB supports the objectives of section 33 of the Bill and believes that sub-section one would enhance the promotion of local content. The ready availability of South African programming is essential to the success of the provision. The NAB is convinced that the market for South African programming will grow and that demand from audiences and advertisers will increase in time. Therefore, obligations relating to South African programming should be phased in to ensure success of the service.

The provisions of this section should distinguish clearly between the signal distribution functions of the multi-channel delivery system and the obligations or conditions in respect of the provision of content.

The provisions of section 33 appear to be vague and further attention should be directed at clarifying this section.

RESPONSES TO SPECIFIC PROVISIONS OF THE BROADCASTING BILL, 1998

1. Policy formulation by the Minister

Section 3(4) states: " . . . the Minister is ultimately responsible to develop policy that is required from time to time".

1.1 Commentary

The NAB accepts the principle of policy formulation by the government subject to the provision that such formulation is transparent and in accord with the procedural mechanism in the Bill.

The amendment to the IBA Act, set out in Schedule 1 section 13A(2) (k), in respect of "policy directions" creates a procedure which is also contained in the Telecommunications Act 1996 and which is based on the Canadian legislation. For the sake of consistency and to avoid confusion, where the minister intends to develop policy directions relating to broadcasting, the procedure in 13A(2)(k) is preferable.

The broad phrasing of section 3(4) is out of kilter with the general tenor of the provisions in both the IBA and the Telecommunications Acts.

The general power to make policy is sufficiently covered in 13A(2)(k) of the Schedule.

Recommendation

Section 3(4) may be deleted without depriving the Minister of his power to formulate policy. Alternatively, Section 3(4) should be subject to the provisions of 13A(2)(k) of the Schedule.

2. Provision of broadcasting services

Section 4(1) states: "Any person who intends to provide broadcasting services, including distribution services, whether satellite, cable or terrestrial, which offer programming to the public, is required to obtain a licence or authorisation in accordance with the conditions which the Authority may determine from time to time."

2.1 Commentary

Neither the IBA Act nor the proposed provisions assist in defining "programmes". The proposed statutory provisions introduce a new definition of a "deemed broadcasting service". Why is the definition of a "deemed broadcasting service" different to the definition of a "broadcasting service" in the IBA Act?

This provision also introduces an "authorisation" which is not defined in the Bill or the IBA Act.

2.2 Recommendation

The NAB recommends that the ministry considers the inclusion of the definition of "programme" which is neither in the IBA Act nor in the proposed legislation. For this purpose, the following definition is provided for consideration:

"Programme" means:

sound or visual images, or a combination of sounds and visual images, that are intended to inform, enlighten or entertain, but does not include visual images, whether or not combined with sounds, that consist predominantly of alphanumeric text; and,

advertising or sponsorship matter, whether or not of a commercial kind.

If "authorisation" is intended to have a meaning distinct from "licence", the meaning should be made clear.

3. The programmes of commercial broadcasting services

Section 27 (2) (a) states: The programming provided by free-to-air broadcasting services must:

reflect the culture, character, needs and aspirations of all the people in the regions that they are licensed to serve;

provide an appropriately significant amount of South African programming according to the regulations of the Authority.

3.1 Commentary

While the NAB supports these provisions, it appears that they relate more to television than to sound broadcasting. However, the generously broad descriptions provide little guidance to the regulating authority and no certainty to the industry.

The difficulty with Section 27(2)(a) is that while programming can easily achieve the objectives set out, competition for audiences really determines the nature of programming. The laudable objectives in these paragraphs are subject to audience demand.

Free-to-air broadcasters must compete for audiences among themselves and they also compete with pay television which, according to this draft legislation, will include another entrant.

Legislation should enable the creation of a dynamic, vibrant and competitive market for audiences and advertisers through allowing broadcasters to choose programming that meets audience demand.

3.2 Recommendation

The following draft is recommended with regard to Section 27(2)(a):

The programming provided by free-to-air broadcasting services shall, if the IBA considers it necessary, include but not be limited to:

reflecting the culture, character, needs and aspirations of all the people in the regions that they are licensed to serve . . ."

Section 7(1) should be amended as follows:

"The Authority shall, as soon as possible after the commencement of this Act, conduct an inquiry in terms of section 28 [A] of the IBA Act, into the [economic] feasibility of the provision of more than one additional subscription television service and make its finding public by notice in the Gazette, and, if it finds that the provision of more than one such service is feasible, immediately conduct a licensing process in accordance with such licence conditions as the regulator must set in terms of the finding based on the inquiry."

4. Local Content

Section 27(4)(b) states: "The programming provided by free-to-air television broadcasting services must:

…

include significant amounts of programmes acquired from the independent production sector."

4.1 Commentary

This provision is unnecessary as it is already contained in the current South African Television Content Regulations.

Changes to these regulations should only be made after public hearings. However, prior to any changes, the regulator should make available a monitoring report on the levels of independent productions which broadcasters are achieving. This report will provide some guidance to the government and the industry as to whether the levels of independent productions should be increased.

Recommendation

Pending the relevant monitoring report from the regulator, no changes should be made to the levels of independent productions.

Section 27(4)(b) should be amended to read:

"The programming provided by free-to-air television broadcasting services shall:

…

include such [significant] levels [amounts] of programmes acquired from the independent production sector as set by the regulator and which levels shall be reviewed and determined by the regulator from time to time."

5. Definition of Community Broadcasting Service

Schedule 1 of the Broadcasting Act defines community broadcasting service as:

"a broadcasting service which is fully controlled by a non-profit entity and carried on for non-profitable purposes, and serves a particular geographical area."

5.1 Commentary

The provision of a broadcasting service to cater for a particular interest is crucial to democracy and the right to freedom of expression in a diverse cultural, linguistic and religious society such as South Africa. Section 31 of the Constitution states that: "Persons belonging to a cultural, religious or linguistic community may not be denied the right, with other members of that community, (a) to enjoy their culture, practise their religion and use their language; and (b) to form, join and maintain cultural, religious and linguistic associations and other organs of civil society…"

Community of interest broadcasters fulfil a need for expression and communication among minority groups who are not served by the public or commercial broadcasters.

South Africa’s population is diverse in culture, religion and language. Abolishing community of interest broadcasters assumes that South Africa has a homogenous society and ignores the diversity of our country. The SABC, as a public broadcaster, cannot reflect this complex diversity or serve the manifold needs of all minority groups. The SABC already faces an onerous mandate in providing information, education and cultural programming to all South Africans in the eleven official languages. It cannot possibly serve the needs of South Africa’s minorities. Community of interest broadcasting therefore strengthens democracy by providing a means of communication for minority groups whose needs the SABC cannot address.

Geographically-defined community broadcasting cannot always represent the interests of a minority, particularly minorities who have different social, religious, linguistic or cultural values. Moreover, in some areas, geographically-defined community broadcasters may replicate services available to some communities while other communities have no choice of services. What is required is a mix of geographically-defined and community of interest broadcasters to contribute to the diversity of expression and dynamism of South Africa’s broadcasting industry.

South Africa is a deeply religious society. Religious broadcasters, particularly those which represent minority religions, provide an important means of communication for communities who are not served by mainstream broadcasters. Adopting a "secular approach" to community broadcasting would deny the right of freedom of expression to the diverse range of religious communities in South Africa.

5.2 Recommendation

It is recommended that the current definition which provides for both community of interest and for geographically-defined community licences be retained for the present. However, the proposed broadcasting legislation should instruct the IBA to hold a public inquiry to determine what, if any, changes should be made to the definition of community broadcasting. The IBA should also be instructed to make such recommendations as are appropriate to enabling the development of community broadcasting.

Limitation on national advertising for community radio

Section 29(7) states: "Community broadcasters will have no limits on the revenue to be drawn from local advertising but will be subject to limits on national advertising as determined by the Authority."

6.1 Commentary

The White Paper, on which the Bill is based, provides no reasoning behind the decision to restrict "national", as opposed to other types of advertising. Moreover, it fails to define what "national advertising" means.

The White Paper acknowledges that some community radio stations have "buckled under the financial strain of maintaining the service with limited resources" and that community services "who do not have access to funds are living from hand to mouth". (White Paper, page 26) In this context, limitations on national advertising will place an additional financial burden on community services. The reduction in revenue caused by such limitations will reduce the capacity of community radio stations to offer a truly community service, for example, live coverage of community events, training of volunteers, establishment of a community news service, and all other activities which have high cost implications.

6.2 Recommendation

The NAB recommends that the IBA make a finding on the revenue streams of community radio following on the recommended public inquiry (See above).

7. Hearing to phase out community of interest radio stations

Section 29(9) states: "The Authority will conduct a public inquiry to determine the terms, regulations and conditions to phase in the transition to a geographically founded community service and other priorities within the community sector."

7.1 Commentary

This section instructs the IBA to hold an inquiry to determine how community of interest broadcasting must be phased out.

In this document the NAB has provided a detail response to the notion that community should be defined only in geographic terms. The instruction to the IBA from the legislation should be in broad terms so that stakeholders and the public are given every opportunity to make input prior to any decision to terminate this very important broadcasting service.

The terms of reference of the section are quite specific in the Bill: the IBA’s inquiry will be strictly to determine how to end community of interest stations, not to find out what support and benefits they have among stakeholders and the public. The inquiry should be an investigation into the definition of "community" for the purpose of broadcasting.

7.2 Recommendation

The NAB recommends that if an inquiry is necessary, the section should be re-worded as follows:

"The Authority will conduct a public inquiry to determine the nature of community broadcasting services which will best serve and reflect the Republic’s diverse population."

8. Frequency Spectrum Directorate

Section 34 (1) states: "There is established within the Department a Frequency Spectrum Directorate."

8.1 Commentary

The proposed provision falls far short of the White Paper which sets the following broad policy for the agency:

"In order to achieve these ends, the government feels that a Spectrum Management Agency should be established, by Parliament, within the portfolio of the Minister for Communications.

"The Agency should be vested by Parliament with the function of overall policy development and supervision of South Africa’s radio frequency spectrum in order to maximise, by ensuring the efficient allocation and use of spectrum, the overall public benefit derived from using the radio frequency spectrum." (White Paper, page 31)

The proposed statutory provisions are a significant shift from the policy in the White Paper. In this regard, the NAB is concerned that the stated policy in the White Paper is being ignored for no apparent reason. The NAB requests the Ministry to provide the information which necessitated this significant shift in thinking so that the NAB may make an appropriate response.

In particular, the NAB draws attention to the following changes:

the proposed statutory provisions provide for the establishment of a directorate with the Department of Communications; the impression created in the White Paper is that the agency will be established by Parliament.

It was not intended that this agency would be a directorate within the Department of Communications. The NAB’s impression from a reading of the White Paper is that the agency would, like the IBA and SATRA, report to the Minister as one of the portfolio organisations and not that the agency would be a directorate within the Department.

The NAB requests the government to provide clarity on these matters.

8.2 Recommendation

It is recommended that Section 34 be deleted in its entirety and that separate legislation be prepared for the establishment of the Spectrum Management Agency which will commence operations in the year 2000, subject to its establishment and appointment by Parliament.

It is further recommended that the government consult stakeholders and the public in setting up the agency as the issues relating to the appointment, funding, reporting and terms of reference should resemble those of other portfolio organisations.

9. Low power sound broadcasting service

Schedule 1 inserts the following definition into the IBA Act:

"(b) low power sound broadcasting service means a community, private or public sound broadcasting service which radiates power not exceeding one Watt".

9.1 Commentary

The introduction of this service in the draft legislation is surprising as the White Paper contains no reference to the possibility of "low power sound broadcasting services".

In order for the NAB to comment on this provision the following information is required:

What is the objective of this service?

Why were stakeholders not involved in this decision?

What information or policy considerations have inspired this provision?

What effect, if any, will the introduction of these services have on current licensees?

The NAB requests, as a matter of urgency, that the above information be made available.

The provision is linked to Schedule 1 which amends provisions of the IBA Act. The relevant provisions of Schedule 1 contain the following references to low power sound broadcasting:

"41A(1) Notwithstanding the provisions of sections 41,42, 44 and 47 the Authority may on such terms and conditions as it may determine, issue a licence to provide a low power sound broadcasting service."

"(2) The Authority shall prescribe the requirements and the procedures applicable to applications for such licences."

The NAB is unable to provide any comment, at this stage, on the proposed provision. However, notwithstanding the lack of information relating to this service, the NAB supports the extension of broadcasting services to all sectors of the population subject to market considerations.

For this reason, the NAB’s recommendation attempts to maintain the concept in the proposed provision without sacrificing the overriding principle of public and industry participation in making input on the introduction of new and sustainable services which must benefit audiences and the public.

9.2 Recommendation

The NAB recommends that the proposals relating to low power sound broadcasting services be amended to allow stakeholders and the public to participate in formulating the framework for this broadcasting category. The NAB recommends:

"41A(1) Notwithstanding the provisions of sections 41,42, 44 and 47 the Authority may on such terms and conditions as it may determine, issue a licence to provide a low power sound broadcasting service."

"(2) The Authority shall prescribe the requirements and the procedures applicable to applications for such licences subject to such terms and conditions as the Authority will determine following an inquiry in terms of Section 28 of the Act."

10. Cross-media control

In the Schedule amending Section 50 of the IBA Act, the following amendment is introduced:

"50. (1) No person who is in a position to control a newspaper may be in a position to control a radio or a television licence in an area where the newspaper has an average readership of more than 15% of the total newspaper readership in that area, if the licence area of the radio licence overlaps substantially with the said circulation area of the newspaper.

10.1 Commentary

On the "Cross-Media Control" section in this document the NAB has made substantial comments on the fact that this section does not reflect the Parliamentary intention which, in March 1996, amended the IBA’s Triple Inquiry Report recommendation.

10.2 Recommendation

The NAB recommends that Section 50 (1) be amended to take account of the Parliamentary amendment which states:

"No person who is in a position to control a newspaper may be in a position to control a radio or a television licence in an area where the newspaper has an average ABC circulation of 20% of the total newspaper readership in that area, if the licence area of the radio licensee overlaps substantially with the said circulation area of the newspaper."

It should also be noted that the word "readership" should in fact be changed to "circulation" in terms of Parliament’s amendment in March 1996.

11. General

Section 3(9): change "complimentary" to "complementary"

Section 28(1): the reference to "Section 28 A of the IBA Act should be to "Section 28 of the IBA Act". In the same provision delete the word "additional".

Section 29(7): "All surplus funds derived from the running of a community broadcasting station will be invested for the benefit of the particular community, including the community radio service and monitored by the Authority, which shall [has the power to audit] investigate the financial records of the services and subject to such investigation shall take such action as is consistent with promoting the objects of this Act or enforcing compliance with the licence conditions.

Section 29(11): "As soon as possible after conducting the investigation in subsection (9), the Authority shall submit a report to the Minister and Parliament and shall, at the same time make such report available for inspection by the public.

The Bill makes no provision for a hearing into ownership of broadcasting services by foreign entities. The White Paper identified this issue which it promised will be conducted as a public inquiry.

The NAB understands that separate legislative provision will be made for the merger of the IBA and SATRA. In this regard the NAB welcomes the opportunity to join the public and stakeholders in making input into this process.

Finally, the NAB draws attention to the fact that the Broadcasting Bill repeats large sections of the Independent Broadcasting Authority Act. All the provisions of the Bill, except for Chapter IV (Public Broadcasting Service), should really amend, where necessary and to the extent contained in the Bill, the IBA Act. In this way, a great deal of duplication will be avoided. With the exception of the Chapter on the public broadcaster, every other provision of the Bill can be accommodated in the IBA Act so that broadcasting legislation is properly consolidated into one single enactment. Thus, for example, the new definitions should be added to those in the IBA Act and the objects, many of which are the same as the objects in the IBA Act, should be included in latter Act, as well as those sections relating to licensing and the new broadcasting policy principles. Accordingly, the NAB recommends that Parliament adopt one statutory instrument on broadcasting.

CONCLUSION

The National Association of Broadcasters (NAB) takes this opportunity to congratulate the Minister for directing the process to create a fair and transparent broadcasting environment which will benefit our country. We believe that the White Paper is a milestone in the formulation of government broadcasting policy.

In general, the NAB accepts the broad policy thrust of the White Paper and is particularly keen to continue to play a role in making input into the formulation of broadcasting policy. The opportunity to make such input at the Stakeholders' Committee contributes to consensus and ownership of the policy.

The NAB identifies with the new broadcasting vision for our country and acknowledges the complementary roles of government, the regulator and operators, as well as the principles relating to diversity, promotion of overall economic growth, reflecting national identity, culture and character, redressing discrimination in the past and universal access.

In an attempt to continue the creative and evolving relationship with the ministry and the regulator, it is also useful to reflect on those principles which have contributed to ensuring an inclusive process which takes account of all view points and which entrenches transparency and participation.

In this spirit, the NAB records its surprise at the publication for general release of the White Paper prior to a Stakeholders’ final discussion of the policy considerations and endorsement of the document. Such a process would have avoided the difficulty confronting the NAB. As the NAB and indeed all stakeholders were not consulted immediately prior to the publication of the White Paper, the NAB cannot accept a range of policy matters which the White Paper has formulated.

Where an inclusive process is adopted, then only as a last resort should a member of the Stakeholders’ Committee be compelled to make representations to the Parliamentary Portfolio Committee to comment on aspects of the White Paper. It is important for the public record that the NAB identifies the principles and issues in the White Paper which constitute points of differences.

The proper opportunity and forum for enunciating the points of departure would have been the Stakeholders’ Committee which should have discussed the final draft of the White Paper prior to its release to the public.

As a representative organisation, the NAB is bound to record members’ differences with certain principles and issues. These issues have been highlighted in this response and include specific recommendations for consideration in the formulation of broadcasting policy and regulation.

The NAB believes that the principles set out in this response are fundamental to a broadcasting environment which creates the conditions to build national identity and economic prosperity.

The White Paper is crucial to the formulation of micro and macro policies and will form the basis for ministerial policy directions and new legislation. For this reason, the NAB must record its views in the hope of informing the new broadcasting environment. As far as any new legislation is concerned, the NAB requests that it be fully consulted so that broad consensus may be achieved prior to the submission of legislation to Parliament.

The NAB is mindful of contributing to public processes which promote harmony and market confidence in the broadcasting environment.

4 SEPTEMBER 1998