Broadcasting Digital Migration Strategy: input from Department, Digital Dzonga, SABC, E.tv, M-Net, Communication Workers Union, Sentech

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Communications and Digital Technologies

17 June 2008
Chairperson: Mr I Vadi (ANC) and Ms M Themba (ANC, Mpumalanga)
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Meeting Summary

The Department of Communications explained the benefits of the Broadcasting Digital Migration Policy which would be implemented over three years, providing an opportunity to close the digital divide between South Africa and the rest of the world. They admitted that there had been delays in finalising the policy, however it now only needed to be taken to Cabinet for approval. Delays had occurred because they wanted to link certain matters in the policy to Cabinet memoranda. The Department also spoke about the progress and development of the set-top boxes that would enable digital migration.

Digital Dzonga stated that they were the body that would overlook digital migration and would coordinate and monitor the digital migration implementation plan. The institution warned the Committee that the absence of a Digital Migration Policy would delay the process. However, Digital Dzonga had developed a ten-point plan that would guide their activity over the next three months.

The SABC said that they had implemented the necessary requirements to ensure readiness for digital migration. It would occur over three phases: there would be a rollout of transmitter networks, Digital Terrestrial Television would be made available and finally switching off of the analogue network would take place. The SABC was concerned that further delays in the finalisation of the policy, funding issues and the absence of a frequency plan would delay the migration. 

E.tv explained why the ongoing policy delay would delay the commercial launch of Digital Terrestrial Television. The broadcaster was also concerned about the knock-on effects of this delay on frequency planning and set-top box specifications and manufacturing. Looking at the timelines for all aspects of the project meant that December 2009 was a more likely commercial launch date. Also discussed was the market conditions necessary for successful digital migration and tariffs and subsidies.

M-Net stated that there would be a challenge in meeting the timeframes approved by Cabinet for the analogue switch-off in 2011. The broadcaster would perform a “Pay TV” trial to explore the requirements that M-Net would have as a “Pay TV” operator.

The Communication Workers Union stated that digital migration was necessary but with certain conditions: Information and Communication Technology infrastructure had to remain a public asset, Sentech should be strengthened financially, set-top boxes needed to be subsidised for the poor and working class and related services had to be affordable.

Sentech said that it was part of the industry implementation plan for digital migration. It had replaced 58 medium and high-powered analogue transmitters to provide capacity for Digital Terrestrial Television. Sentech and the Department were in communication with the National Treasury to acquire more funding for the digital migration process.

Committee members were concerned that the Broadcasting Digital Migration Policy was not yet finalised and that the country was not ready for commercial broadcasting. They wanted more information on the timeframes allocated to the process and a definite answer on when the policy would be finalised. The Committee felt that there should have been more consumer awareness programmes around the Digital Migration Policy and set-top boxes. Members were also concerned about jurisdiction issues. They wanted to know why the government had decided to have three public regional channels in stead of two, as this was supposed to be the decision of the Independent Communications Authority of South Africa.   

Meeting report

 

Briefing by Department of Communications on Broadcasting Digital Migration Policy
Ms Lyndall Shope-Mafole, Director-General for the Department of Communications (DoC), stated that the process of inception to implementation of the policy would occur over three years, even though South Africa was a developing country that faced certain challenges. The Broadcasting Digital Migration (BDM) Policy would provide the opportunity to close the digital divide, would build social cohesion and a national identity and would allow the electronics manufacturing sector to grow. The BDM policy also created job opportunities as well as providing for poverty reduction and would increase access to information and services. The strategic plan for the BDM policy consisted of building competitiveness of the SA economy, broadening participation in the economy, improving the capacity of the State to deliver and building a better world.

In terms of building the competitiveness of the economy, local manufacturing of set-top boxes (STBs) created an opportunity to build the electronics manufacturing industry in the country and formed part of the Industrial Policy Action Plan. This strategy also sought to encourage Information and Communication Technology (ICT) sector growth; it facilitated research and development, created job opportunities and provided a model for African Digitisation.

Broadening participation in the economy meant that the public broadcaster would cater for three public regional television channels as well as channels prioritising education, health, youth, sports and government information. STBs were to be enabled to receive services from different platforms and operators to avoid multiplicity of STBs. This would also enable the integration of the second and first economies. STBs would be sourced primarily from South African manufacturers.

Improving the availability of e-government and information would improve the State’s capacity to deliver. It was “building a better world” because it allowed for the development of local content for South African, African and  international audiences and it would also contribute to building the electronics sector in Africa.

Digital Dzonga (DD) briefing on Digital Migration
Ms Lara Kantor, Chairperson: Digital Dzonga, stated that the institution had been formed to oversee Digital Migration in South Africa. They had to develop an implementation plan for migration to digital broadcasting systems by South Africa’s terrestrial television services. They were also to coordinate and monitor the implementation plan, provide a forum for discussion and decisions-making by digital migration stakeholders on all migration matters and they were to communicate with the public on the process.

Ms Kantor listed the names of the thirteen non-executive members of the Digital Dzonga Advisory Council which represented a wide range of interests and a wealth of expertise. Representatives from the DoC and the Independent Communications Authority of South Africa (ICASA) were still to be appointed. Digital Terrestrial Television (DTT) significantly impacted the broadcasting value chain and required the cooperation of multiple stakeholders, hence the need for Digital Dzonga. It was also consistent with international best practice.

There were many complexities that had led to a number of delays in getting digital migration underway. The DD Advisory Council was unable to move forward on substantive issues in the absence of a BDM policy. The Council then developed a ten-point plan that would guide activity over the next three months so that the DD could meet the agreed timeframes. The DD would:

- Finalise the terms of reference
- Agree to staff requirements and the organisational structure
- Begin recruitment of key staff
- Sign-off budget
- Oversee implementation of communications plan with the DoC
- Clarify BDM policy including the subsidy scheme and regulatory framework
- Establish progress on STB specifications
- Hold consultation sessions with all key stakeholders
- Identify key success factors for digital migration
- Constitute working groups.

The ten-point plan would culminate in the development of an implementation plan by August 2008. The plan would show different phases for digital migration and act as a detailed road map. 

SABC on Digital Terrestrial Television status
Mr Mvuzo Mbebe, Group Executive for Content Enterprises: SABC, said that the DTT process had been initiated in 2005 with the establishment of the Digital Migration Working Groups and that the SABC has been an active participant in the process.

The SABC had put in the necessary requirements to ensure that it was ready for Digital Migration. DTT was a key component of the SABC’s strategy and a primary vehicle for the continued enhancement of its public service delivery mandate.

Digital Migration would occur in three phases. Phase One would be the start of the rollout of the transmitter network, which would allow for feedback, refinement and evaluation and would prepare and test services. Phase Two was where DTT services would be made available to the market, which would expand the transmitter network to full coverage. Phase Three would begin the switch-off of the analogue network. The SABC had initiated Phase One and had committed resources accordingly. They hoped to launch Phase One on 1 November 2008.

Phase One objectives consisted of showing that the DTT was on track and would meet government objectives for DTT activity in November 2008, initiating STB manufacturing processes and ensuring STB availability for Phase Two, testing user experience and consumer reaction and identifying and dealing with installation issues. Phase One would run from November 2008 to March 2009. There would be up to 3000 STBs and they would be distributed among key stakeholders.

A dedicated project office was put in place to drive all aspects of Digital Migration and commitment from all relevant players had been secured, including support from the DoC. The SABC would work closely with Digital Dzonga on the delivery of Phase One. Even though Phase One was on track, the SABC warned that further policy delays would impact on the timing of the delivery of Phase Two. Also, funding issues and the approved frequency plan still needed clarification.

E.tv briefing on Digital Migration
Mr Marcel Golding, CEO, informed Members that e.tv was concerned that the ongoing delays in the finalisation of the digital migration policy would delay the commercial launch of DTT. E.tv therefore supported the SABC initiative of establishing a DTT trial, which would be inclusive of all stakeholders and would address some of the issues that could arise from the commercial launch. E.tv would then partner the SABC in the trial phase in November 2008. The broadcaster was concerned with frequency planning, STB specifications and the manufacturing process, regulatory processes, timelines, market conditions necessary for a successful migration, and tariffs and subsidies.

Mr Golding pointed out that the BDM policy would have to be assessed through certain prescribed procedures set out in the Electronic Communications Act before its implementation. The Minister would have to consult ICASA on the policy and had to publish it in the Government Gazette to obtain views of interested persons. Thereafter, a final version of the policy was to be published in the Gazette. A series of lengthy procedural steps would follow concerning the frequency plan, STBs and various regulatory and licensing procedures. A commercial launch in 2008 would be impossible, as no commercial launch was possible for at least sixteen months after the policy paper was issued. Also, the lack of certainty over the past year had had a detrimental effect on planning and budgeting by incumbent broadcasters for the DTT rollout.

The migration of analogue to digital involved the development of a new frequency plan, which would take into account existing services and have a phased rollout of new digital services. The frequency plan could not be finalised before the policy was issued. This process was likely to take longer than twelve months.

In terms of STB specifications, e.tv had argued that the policy should ensure that entry-level STBs should be affordable, accessible, user-friendly and mindful that a STB is a bridging mechanism until digital television sets were affordable and widely available. In March 2008, the DoC had stated that the STB specifications would be forwarded to the South African Bureau of Standards (SABS) the following week. The specifications had still not been submitted to the SABS. The final STB specifications could also not be finalised before the policy was issued.

Once the policy paper was published, ICASA would have to evaluate the market and the extent to which it could sustain new channels. In addition to the regulatory policy processes that ICASA would follow, they would also need to follow a licensing procedure that could take a few months. It would take broadcasters six months to develop and launch new channels.

Taking all this into consideration, it would take over sixteen months from the date that the policy paper was published to commercially launch the service. E.tv calculated that the earliest possible commercial launch date for DTT would be 1 December 2009.

Mass availability of cheap reliable STBs, sufficient number of channels to incentivise viewers to buy the STBs and consistent and reliable mass communication to viewers that would encourage the take-up of STBs was critical to the success of digital migration. E.tv was concerned that the Minister of Communications stated that STBs would only be required in 2011. This would result in eight million households scrambling to buy STBs in the last few months before the switch-off of the analogue signal. The purpose of a dual illumination period was to positively incentivise the early take-up of STBs.

E.tv was aware that the cost of digital migration to incumbent broadcasters was considerable. Broadcasters could not be expected to pay the costs of the dual illumination of their analogue signals. All broadcasters would have to be subsidised for these costs and tariff regulations would have to be introduced. The introduction of new channels would fragment audiences and drive down advertising rates. It was likely that the advertising spend available to broadcasters would have to be shared across more channels. This would be even more prejudicial to e.tv, as the channel was entirely dependent on advertising revenue as its sole revenue source. Also, if the SABC were granted subsidies for its existing services, then this would worsen the existing uncompetitive environment in the broadcasting market.

M-Net Briefing on DTT Status and the Pay TV Trial
Ms Karen Willenberg, M-Net Director of Regulatory Affairs, stated that there would be a challenge in meeting the time frames that were approved by Cabinet for the analogue switch-off in 2011. The approved digital switch-on dates were only four months away and the absence of a policy had proven to be a major challenge to M-Net.

The SABC and e.tv were conducting a “free to air” trial. M-Net was restricted to subscription broadcasting. It was for this reason that M-Net was not able to participate on a “free to air” basis. A decision was taken to conduct a parallel trial, which would allow M-Net to explore the distinct requirements that M-Net would have as a “pay TV” operator. A working group had been established to commence the planning for the trial. There were also various committees that would deal with the information that flowed from the trial.

M-Net wanted to understand what was going to motivate subscribers to purchase STBs. They would look closely at the content motivation and messaging to subscribers. M-Net would work closely with others to make the project a success. The trial process would allow M-Net to achieve three critical goals. M-Net would be able to test inter-operability of services, share technical results and lessons and it would also allow M-Net to lay the groundwork for a full commercial launch. Extensive research would have to be undertaken to ensure a successful launch.

Mr Calvo Mawela, General Manager: Regulatory Affairs, stated that M-Net was trying to ensure that M-Net subscribers would receive “free to air” services without any hindrance.   

Communication Workers Union (CWU) submission on Draft Digital Migration Strategy
Mr Richard Poulton, CWU Treasurer and a member of Digital Dzonga, said that BDM was necessary in the information age. However, it had to be kept in mind that the working class and the poor constituted the majority of the population.

The CWU supported BDM but with certain conditions. The first condition was that ICT infrastructure was a public asset and had to remain as such. Sentech, as the distributor of signalling, needed to be strengthened financially and in terms of human resources, to ensure sustainable migration. The CWU proposed that discussions should be held with labour to ensure that no jobs were lost during planning.

The second condition was that services and equipment would have to be affordable to the majority. This was directly related to STBs and other services linked to BDM. The CWU supported the idea of a subsidy for the purchase of STBs.

Digital Migration created an opportunity to develop and promote local content and ensure that the interests of all constituencies were catered for in content production, including the working class. The poor coverage of labour issues should then be remedied.

In terms of universal service and access, there had to be a clear understanding that the primary objective was affordability and access. A clear communication plan throughout the process had to be prioritised to ensure that the public was involved from step one and that public awareness was created about all aspects of digital migration.

Skills were a scarce commodity in South Africa, particularly in the ICT sector. All the relevant Sector Education Training Authorities (SETAs) would have to develop the required skills to ensure a successful digital broadcasting skills legacy. The CWU proposed that the effect of digital migration on workers in the sector needed to be prioritised and that the incoming advisory council include the issue of capacity building in its terms of reference.

In terms of STBs, the CWU believed that the State was to be the leading investor in broadcasting, and the State was to promote manufacturing of all major components as part of the creation of decent and sustainable jobs. The CWU proposed that the design, manufacturing, marketing, sales and after sales of the STBs should be a Proudly South African project. They also believed that the poor and the working class needed to be subsidised in the STB process. The STBs were to be free of charge for recipients of social grants and at the lowest price for the rest of the population.             

Sentech briefing on Digital Migration
Mr Dingane Dube, Sentech’s Executive of Regulatory Affairs, stated that Sentech was part of the industry implementation plan for digital migration. Sentech guaranteed that there would be a digital signal in place by 1 November 2008.

Phase One and Two of the implementation plan has been completed. Phase One was the preparation for digital migration. Fifty-eight medium and high-powered analogue transmitters were replaced to relieve infrastructure capacity for DTT. Phase Two signalled the start of satellite distribution systems in Gauteng and DTT installations started as well.

The DoC was in constant communication with the National Treasury for additional funding for DTT projects. DTT rollout was on track, however, Sentech was in need of additional funding. If more funding became available, the dual illumination process would run smoothly.

Discussion
Adv P Swart (DA) stated that DTT had been a concern of the Committee’s for quite some time. It was clear that there were issues between Sentech and Treasury, and that there were problems with the DoC itself. Ms Shope-Mafole kept repeating that there were achievements in the speed at which the process was moving, but the process was not really moving along quickly. The BDM policy was not even in place and the country was not ready for commercial broadcasting. He wanted more information and comments on the timeframes for the STBs, as the Committee needed to know what was happening.

Ms Shope-Mafole explained that in February 2007 the Cabinet had approved Digital Migration and the switch-on targeted for 1 November 2008. The Cabinet approval was not about a commercial launch; it was about the switch-on. The DoC did not make decisions for the commercial launch; that was a commercial issue. They admitted that there were delays in finalising the policy, however the policy would be taken to Cabinet and then would be published. Delays occurred because the DoC wanted to link certain things in the policy to Cabinet memoranda.

She said that the STBs were more than just bridging instruments; they would be used for e-government and other purposes to help bridge the digital divide and that was why STB production was taking so long. There would be analogue broadcasting until 2011; therefore STBs were not required this year.  

Ms Shope-Mafole stated that a lot of work had been done regarding skills and capacity. Academies were launched specifically for training. They were also working with different sectors to enhance skill development.   

Mr R Pieterse (ANC) asked if the process had progressed past the borders of South Africa and included the rest of Africa. The State of the Nation Address said that 50% of the population would be ready for digital broadcasting, yet the SABC submission showed that only 18% of the population would be ready. Broadcasters were not telling the Committee why only 18% of the population would be ready. He stated that Ms Kantor’s presentation was excellent, however, the report lacked dates attached to the processes. This made it difficult for Members to practice oversight over the institution and to hold Digital Dzonga accountable for their actions. Also, it seemed that community broadcasters had not been invited to the meeting. He hoped that people would keep in mind that community broadcasters represented a large constituency. Mr Pieterse thought that consumers should have been informed of the BDM policy long ago.

Ms Shope-Mafole explained that the 50% coverage spoken about in the State of the Nation Address was based on the areas that the transmitters would be able to cover. She said that the 50% target might not be reached because of funding issues that needed to be addressed.

Mr Golding wanted to clarify that the trial starting in November 2008 was not a digital “switch-on”. The “switch-on” was when there was a frequency plan in place that would be allocated to the rest of the country. The SABC and e.tv were working together on the trial to put two transmitters in place that would cover 18% of the population. The purpose of the trial was to be able to gather information around the issues concerning digital migration. The information would help broadcasters to understand how the STBs would interact, provide clarity on frequency and many other matters.

Ms Kantor stated that there were vigorous debates around timelines with Digital Dzonga processes. However, members of the Dzonga had committed themselves to having a fully detailed implementation plan by August. After the policy was published and the regulator had put forward its plan, the Digital Dzonga would have enough time to form a definitive plan for digital migration. This plan would consist of three phases. Phase One would be the initial trial and Phase Two would indicate when a commercial launch would be possible. This would happen in about thirteen to sixteen months. Phase Three would be the plan for the analogue switch-off. 

Ms D Smuts (DA) commented that Mr Pieterse seemed to have missed many of the points that were made at the meeting. She explained that the policy was held hostage by the fact that the policy was not in place and therefore he could not insist on timelines and answers from Ms Kantor. The representatives at the meeting were those that were appointed to the Digital Migration task team by the Minister of Communications. It was not up to them to include the rest of the country in the meeting.

She asked the DoC how it was that the government was deciding on how many channels there would be. ICASA had the jurisdiction to decide how many channels there would be. Secondly, it was determined by law that there would be two public regional channels and each channel would be clustered around a set of South African languages. She failed to see how a proposal could be made that there would be three public regional channels that would serve three provinces each. This was a jurisdictional issue. She wanted to know who the multiplex operator was going to be and where the funding was for the Digital Dzonga. The DoC’s document stated that they were to establish a digital migration awareness strategy. Ms Smuts was under the impression that this was the Digital Dzonga’s task. She asked for some clarity on the issue.

Ms Shope-Mafole stated that the issue with the public regional channels was submitted in a Cabinet memo along with other matters that looked at the policy for digital migration. The DoC believed that issues concerning types of channels were a public concern and therefore the Department looked at the issue in the context of a policy concern and not just as a regulatory matter. Also, now that there were more frequencies, it was felt that the public needed to benefit from it. Therefore, there were three public regional channels instead of two.

She said that the DoC was in charge of funding the Digital Dzonga. The Department was responsible for creating digital awareness. However, this responsibility was being passed on to the Digital Dzonga. The two institutions would be communicating and making the transition. 

Ms Kantor clarified that digital awareness was seen as Digital Dzonga’s role. The DoC’s work on digital awareness would be handed to the Digital Dzonga.

Mr Mbebe explained that, to his knowledge, there was no process of actually licensing a multiplex owner. There were two aspects when it came to multiplexes; there was a technical distribution aspect that Sentech would manage and there was a broadcasting aspect that the SABC would manage.    

Mr K Khumalo (ANC) commented that once you moved in to digitisation, a policy was needed to guide broadcasters. Having the responsibility of hosting the 2010 FIFA World Cup had put pressure on all broadcasters to move faster toward digitisation. South Africa now wanted to implement digital migration in three years instead of in eight to ten years like other countries. It was unfortunate that the BDM policy was not finalised and ready to be used as a guideline.

Mr M Kholwane (ANC) added that the Committee needed a definite answer for when the policy would be finalised.

Ms Shope-Mafole apologised to the Committee and broadcasters present at the meeting, as the policy had not yet been gazetted. However, the draft policy had been published and they had received comments from all the broadcasters. The policy that would be taken to Cabinet was in fact amended according to the submissions that were received. The policy would definitely be gazetted. She was not sure when the policy would be finalised. However, she assured the Committee that the digital switch-on would happen on time.

Mr Khumalo asked why, if the switch-on was purely on the basis of digitisation, the trial that related to STBs was so important.

Ms Shope-Mafole answered that the trial was really a sector issue. The DoC would continue to engage with the sector and various broadcasters on the issue. The DoC was trying to ensure that the BDM policy was in place and that signals would be distributed through public distributors.

Ms L Yengeni (ANC) asked where the specs were for the digital migration process.

Ms Shope-Mafole stated that the DoC was in possession of the specifications and that they were engaging with the South African Bureau of Standards on the issue.

Mr Pieterse asked if STBs would be made available on the 1 November 2008 for those that could afford it and wanted to purchase it. It made sense to have a period of time in which to introduce the STBs.

Ms Shope-Mafole explained that the STBs were being tested and put on trial. She was not sure, but thought that there would be STBs available for the 1 November 2008 that would be delivered to the public for trial runs.

Mr Mbebe clarified that STBs would not be distributed to consumers on 1 November as these boxes were for the purpose of the limited trial. There was a limited number of STBs for trial purposes. These would be distributed to establish clarity on certain matters concerning the boxes.

The meeting was adjourned. 

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