Broadcasting Digital Migration policy; SABC Senior Executive appointment: Minister of Communications briefing
Broadcasting Digital Migration policy; SABC Senior Executive appointment: Minister of Communications briefing
23 January 2018
Chairperson: Mr H Maxegwana (ANC)
The Minister updated the Committee on the status of Broadcasting Digital Migration (BDM), as well as the appointment of the Chief Executive for the SABC. She dealt briefly with the appointment of the chairperson of the Independent Communication Authority of South Africa (ICASA), informing Members that he had indeed been convicted for fraud and corruption. The Department had attempted to get hold of the court judgment, but it was not yet ready. She indicated that the Act was very clear on the procedures to be followed regarding the matter and her Department intended to do exactly that after perusing the court judgment.
She said the Department was set to meet its deadline target for the BDM project only if the required funding was acquired. However, all mechanisms had been put in place to avoid any delays and obtain more funding in order to meet the deadline. The encryption and non-encryption matter was yet to be dealt with thoroughly in light of the Constitutional Court judgment, which was being thoroughly studied by the Department. However, there was an investigation on the project regarding possible collusion between officials and the manufacturers. A report was expected quite soon, and the Department had been requested not to undertake any procurement for the project until the investigation was completed. Lastly, the Minister indicated that there was a possibility that there might be delays due to the increasing number of households acquiring TV sets.
The Department provided a progress update, indicating that the digital transmission network had been fully deployed and was active across the country. 87.3% of South Africans were in a position to receive digital terrestrial television (DTT) broadcasts, and the remaining 12.7% could receive coverage via direct-to-home (DTH) satellite. The government was currently distributing subsidised decoders for both DTT and DTH platforms.
Regarding digital broadcast content, all three SABC channels and news channel were currently live on air on the DTT and satellite network, as well as an additional six channels from e.tv. In addition, all 18 SABC radio stations were available throughout the country on the digital TV network. There was room in the network for further channel expansion. As for the receiver standards framework, South African Bureau of Standards (SABS) national standards for set-top boxes (STBs) and integrated digital TV were in force, and manufacturers were already producing receivers according to published standards. This had been an area of uncertainty for some time in the industry.
ICASA also presented the sector’s compliance with the regulations, indicating that there were 330 licensed Class and Individual Broadcasting Service (BS) licensees. However, only 247 of these BS licensees were currently operational. The Broadcasting Compliance Unit endeavoured to assist all licensees to be compliant with their annual reporting, but due to the large numbers, it was impossible to report annually, and compliance reporting was done retrospectively.
Members asked about other avenues that could be followed by the Department to pursue partnerships; the ICASA chairperson’s current employment status; the current Minister’s stance on BDM policy compared to that of her predecessors; the implementation of the dual roll-out and the role of Sentech; the commencement date for phase one of the project; whether households that already owned STBs were going to be subsidised; who was going to assist the Department with the registration process; what assistance was being given to people who were disabled, particularly those who were hearing-impaired; the specific role of the local municipalities in the installation processes; who was paying for the storage costs of the equipment; whether the appointment process at the SABC was still on-going, and whether the Minister was interfering with the appointment process.
The Chairperson said that the investigation regarding the activities of former Communications Minister, Faith Mutambi, had been completed at end of last year, and promised that the investigation report dealing with the matter would be handled by the Committee in the first term of this year. He also committed to deal with Media Development and Diversity Agency (MDDA), because there was a strong view from the Members that its activities must be investigated as they did not indicate good governance. This matter would be reflected in the draft programme of the Committee for the first term as well.
Minister’s opening remarks
Ms Mmamoloko Kubayi-Ngubane, Minister of Communications, commenced her opening remarks by clarifying the appointment of Mr Rubben Mohlaloga, chairperson of the Independent Communications Authority of South Africa, following his conviction the previous Friday for fraud and corruption by a magistrate’s court. The Department had attempted to get hold of the judgment yesterday, but it would be ready tomorrow. As soon as it was available it would be communicated to Parliament through the Committee. The Act was very clear on the procedures that were to be followed regarding a member who had been convicted, and the Department would act according to the processes and procedures outlined in the Act.
Broadcasting Digital Migration (BDM) project
The Minister said that the last presentation on this project had been made when she was the Chairperson of the Portfolio Committee on Telecommunication, but she would attempt to provide all the critical information regarding the current status of the project.
The Department would be able to deliver on the project within the set target date only if the adequate resources had been allocated for it. The deadline of June 2019 for the completion of the project was not a self-imposed deadline, however, and all mechanisms had been put in place to avoid any delays and obtain more funding in order to meet the deadline.
A policy had been passed regarding the issue of encryption and non-encryption, but there had been a call to review that policy and there was a Constitutional Court judgment regarding this matter, which was yet to be dealt with thoroughly in light of the judgment after it had been perused by the Department. Secondly, there was an investigation into possible collusion around the project itself involving the conduct of the officials and the manufacturers. A report was expected quite soon, and the Department had been requested not to take any procurement around the project until the investigation conducted was completed. However, it would wait for the report before making a decision on any major aspects of the project. A start and an end date would be announced, a project officer would be appointed, and the project plan would be finalised.
Lessons had been learned during the roll-out of BDM. The policy indicated that the Department was migrating for TV-owning households, but it had been discovered that households that did not have a TV set ended up buying sets, which consequently increased the number of households the project had to cover. Initially, it was meant to cater for households that were earning below R3 000 per month and below, and if one took into account those that did not have television sets, the figure increased to seven million, so legal opinion had been sought which advised that the Department was obligated to cover them as well. Therefore, the figure had changed, which meant that the amount of funding allocated needed to be adjusted accordingly to take the increase into account.
Progress by DoC on implementation of BDM programme
Mr Thabiso Thiti, Acting Director-General: DoC, informed the Committee about the transmission network, and said the digital transmission network had been fully deployed and was active across the country. 87.3% of South Africans were in a position to receive digital terrestrial television (DTT) broadcasts, while the remaining 12.7% outside DTT coverage could receive broadcasts via direct-to-home (DTH) satellite. The government was currently distributing subsidised decoders for both DTT and DTH platforms.
With regard to digital broadcast content, all three South African Broadcasting Corporation (SABC) channels and the news channel were currently live on air on the DTT and satellite network, as well as additional six channels from e.tv. In addition, all 18 SABC radio stations were available throughout the country on the digital TV network. There was room in the network for further channel expansion. As for the Receiver Standards Framework, the SA Bureau of Standards (SABS) national standards for set-top boxes (STBs) and integrated digital TV were in force, and manufacturers were already producing receivers according to published standards. This had been an area of uncertainty for some time in the industry.
In terms of STB procurement and distribution, he reported that:
The R2.45-billion budget was sufficient for only 1.5 million kits (STBs, aerials and installation costs).
The Universal Service and Access Agency of South Africa (USAASA) had ordered 1.5 million STB kits from various manufacturers between 2014 and 2015.
To date, over 851 720 STB kits had been delivered to the SA Post Office (SAPO) warehouses.
So far, over 563 667 registrations had been recorded, with 283 478 installations allocated to installers and completed nationwide.
A total of 23 161 installations had been completed in the Northern Cape square kilometre array (SKA) region in order to comply with the international radio telescope project requirements.
Analogue broadcasts (18 transmitters) had been switched off in the SKA area as a result.
The three implementation roll out phases wer:
Short-Term – Phase 1
STB clearance: Clearing of existing DTT kits (rollout plan completed and in force).
The planned sequence starts with predominantly flat provinces along borders (Free State and North West).
The registration process for indigents to be activated nationally with a target timeline for June 2018 (including data analysis).
Medium-Term (April to July 2018) – Phase 2
Acquisition of DTH decoders to connect already registered DTH households.
Long-term (July 2018 toJune 2019) – Phase 3
New procurement of devices for the remainder of the provinces.
Rollout in the remainder of the border and inland provinces with targeted completion date of 30 June 2019.
Mr Thiti also highlighted some implementation challenges. These included the lack of resources, absence of the DTH devices, and a lack of real time technology. In order to mitigate the challenges, some interventions were:
Development of a broader coordination mechanism and partnership;
Discussions were under way to solicit advice on a procurement model;
Development of a fast tracking mechanism, with an intensified awareness programme through various platforms;
Use of existing qualified local installers, in collaboration with municipalities;
Complementing installer capacity with the Department of Public Works’ Expanded Public Works Programme (EPWP) installer training program.
Lastly, he indicated that the required funding for the project was R6 billion.
The Chairperson said that in order to inform the citizens of the country, there was a desire to partner with a number of people and organisations. He asked whether there were no other avenues that could be engaged. He also suggested that the Department should look into what it could do to exploit or tap into Parliament’s resources as well.
Ms P van Damme (DA) asked about Mr Mohlaloga’s current status, as Parliament had approved his ICASA appointment in November.
She said the Constitutional Court had dealt with the DTT process around policy making and had indicated that it was former Minister Mutambi’s prerogative to change it. Therefore, it was important that clarity was given about the current Minister’s position on this policy, because right now the Committee was not clear what was going to happen under her tenure. She asked the Minister to clarify her position on this policy.
Mr R Tseli (ANC) referred to DTT, and particularly the proposal about households to be afforded a choice to be subsidised, and asked about those who already had STBs -- what was going to be the situation regarding the proposed choice?
The issue of funding always arose, but given the seriousness of the project, the Committee would need some time with National Treasury to discuss this issue and have the Minister outline what else was required to ensure that this challenge was dealt with, as the targeted time frame could not be missed. He asked for clarity regarding the implementation of the dual roll-out and Sentech. Lastly, the target for completion of phase one of the project was set for June 2018, but there was no commencement date –what was the commencement date?
Ms W Newhoudt-Druchen (ANC) said she would like the public information regarding the project to be disseminated as widely as possible, because people who were deaf did not have access to this information, or were not informed about the project. She proposed that there should be interpreters and subtitles in the broadcasting or advertising of the project. She raised the issue of people living with disabilities who were earning less than the R3 000 threshold, and asked for clarity on what the Department planned to do to ensure that they would not be excluded from participating in the project. Lastly, she wanted to know who would assist with the registration process.
The Minister first responded on the issue of Mr Mohlaloga. She said that after the process of his appointment in Parliament, his appointment became official and he had taken over office. Therefore, the processes and procedures as outlined in Act had to be followed and that was what the Department would do in dealing with his conviction.
As for her stance regarding the DTT policy, she said the policy was not based on the individual, but on the government. Therefore, she could not speak about her personal stance on the policy, or that of the previous Ministers. While the court had stated that the process of changing or initiating policy lay with the executive, it had pronounced that government should not make use of public funds for the benefit of the personal stances of ministers on policies. The important thing was for the Department to migrate, because migration needed to start moving, so the engagement on policy interpretation and the court judgment with the Committee would be very helpful.
The Department was currently spending on both analogue and digital. Sentech had met its targets, but due to inadequate preparation for the migration, it could not switch off from analogue. The Sentech analogue system was degenerating, so if the Department was not moving swiftly enough, it would incur maintenance costs which it could not afford right now. Also, the current budget did not include the SABC’s readiness, as well as getting ready for non-subsidised markets. Currently the Department was looking for various partnerships to close certain gaps, and it would need about R6 billion to get all of the work done. In addition, it had connected to local radio stations to spread the word about the project, and the Post Office remained as the point of registration for this. The Department was trying to find partnerships, but in some other areas it needed to buy space. It was incurring warehouse costs – with STBs just sitting in the warehouse.
Mr Thiti responded that phase one of the project had started last week in North West, and now the teams were moving to the second area in the Free State. In the past week, the Department had concluded the registration and training of installers in order to meet the deadline. The current budget was R29 million for the 2018/19 year, which was in fact very limited. There was therefore a need for further engagement to get more funding in order to meet the deadline in 2019.
The Project Manager said that the Department had established steering committees at the district and local municipality level in order to achieve the objective of reliable data through the use of community development workers, and to fast track the installation process. The steering committees were currently generating a database of installers from the local and district municipalities’ communities, and this was being tested in North West this week. In addition, this would reduce and assist in the processing of defects and where there were challenges – for instance, having installation companies and/or individuals (installers) that were within the communities so that if there were issues that might come up in the near future, they were close by to fix them immediately. He emphasised that the Department was partnering with local and district municipalities to ensure that this was achieved.
Ms M Matshoba (ANC) said she was confused by this process, and wanted to know about the role of the constituencies in monitoring these installations. In addition, who was going to manage all the processes involved in the work which was the specific role of the local municipalities? It was not clear whether it was the local government that would be monitoring this work. She also wanted to know about the role of the local businesses and how they fitted in. Lastly, she requested some clarity on the EPWP programme outlined in the presentation.
Ms Van Damme said there had been comments from people within the sector claiming that the technology that had been used was obsolete, and there was a need to review the migration policy.
The Minister responded that the electronics were a bit of a challenge, because after five years they sort of became obsolete. The implementation model could be changed, but not necessarily the policy itself, and this was what the Department was focusing on.
The Project Manager said there was a report that the Department had entered into a memorandum of understanding (MOU) with the DPW which included training about ten individuals or young people to install the STBs. Upon completion of the training they would be put into the installation companies that were within those communities. The Committee should note that currently there were insufficient installation companies in some areas to do the work, but the Department was generating a database to make use of the local installers. This would be achieved by a public participation through the steering committees - they put out adverts and market the project, and invite people to come forth to register in their local municipalities.
The Chairperson wanted to know from the Minister who was paying for the storage costs.
The Minister responded that the storage costs were unforeseen due to delays, and the Department was actually paying for those costs because SAPO could not provide storage for free. With regard to the incorporation of local players, the Department did not have ready-trained installers -- it called for those who were already trained so that they could be incorporated in the local space. There was a gap, but part of closing the gap was to partner with the local municipalities. A limited number of installers were available, but the Department also did not want to over-train, which involved taking more trainers and would become a long-term problem.
Appointment of SABC executives
The Minister said she had sought legal advice regarding the court order as far as her role and involvement was concerned with the appointment of the executives at the SABC. The legal advice was to provide the Minister with some guidance as a representative shareholder of the government. The legal advice had been sought with a view to appealing the court judgment, because of its implications for other state-owned enterprises. As a result, a senior counsel had been appointed to assist with the court interdict that was issued on 6 December 2017. In this, as the Minister, she had stated that did not want to hire or fire executives, because that was the responsibility of the board of SABC. However, it was important for the shareholder representative (the Minister of Communications) to be consulted.
The Minister said she had emphasised to the board that she would not be interacting with the board directly, but with the chairperson of the board, in order to avoid the consequences of a trust deficit. She explained her role in the process, saying that in January she had come across an article that an individual had been appointed by the SABC board as the Chief Operating Officer. In obtaining confirmation from the board, it was made it clear that no official statements had been issued regarding any appointments. However, she had then got a call from the Presidency that this individual had been appointed. She had subsequently communicated with the chairman of the board to ascertain what was happening, and then issued a statement clarifying that no formal appointment that had been made yet. The board was supposed to formally and officially engage the Minister on this before it could officially issue a statement so that she could take this to Cabinet and provide the necessary information. She further clarified that her responsibility was to provide oversight, and she had issued her statement in the context that the process had not been concluded as per the court judgment.
Ms Van Damme said that the orders were very clear on the fact that the Minister must be consulted, although she had limited powers. If the intention was to include the Cabinet, the order would have clearly outlined that. She advised the Committee to be very vigilant on this matter. She believed that the consultation had been very unclear in respect of its form, how it was conducted and carried out. She asked if the process was still on-going, and how the COO who was said to have been appointed had received congratulations if he had not yet been formally and officially appointed.
Dr M Ndlozi (EFF) believed that the Minister’s statement was an admission of interference, and said that there was bad faith. The statement implicitly said that the Minister interfered in the appointment processes. He warned the board to not mislead Parliament or the public. He requested answers from both the Minister and the board as to whether there was still interference in the appointment processes at the SABC.
Mr Tseli asked the SABC board to explain the process that had led to the appointment of the COO, whether this person was qualified for the position, and what the status of the appointment processes at the moment was.
Mr Bongumusa Makhathini, Chairperson of the Board of Directors: SABC, responded on the consultation process, saying that it was done in three forms. There were meetings between him and the Minister -- in some instances, with some of the board members. In addition, there was also constant communication between the board and the Minister. He confirmed that the board had not sanctioned the media report. In order to subject the person to a vetting process, a conditional appointment had to be done in order for the person to be comfortable for the vetting to go through, and had also been communicated to the Minister.
The SABC’s head of human resources said that the process was a continuation from the previous board of directors -- the human resources department had handed the process over to the permanent new board. The board had met with the candidate in question, and satisfied itself regarding the qualifications, experience, reference checking and all other checks, and all that information had been presented to the board. Once this was done, the chairperson had communicated to the Minister and there was interaction, but the Minister had not responded to the communication. There had been both meetings and correspondence with the Minister. With regard to the draft order, the board had once again communicated with the Minister to go ahead to make the offer, subject to the vetting process.
With regard to the article that had appeared in the press about the appointment, the SABC had received enquiries from the media and the board had chosen to not respond to those enquiries. However, it was announced that the process of the appointment was still on-going. The board had chosen to respond to what the court order had said, and it had followed the process as outlined in the court order. Therefore the board was satisfied it had complied with the outlined process as per the court order.
The Minister said that people needed to understand her role. She did not represent herself, and there were guidelines on how things could be done in government. The reason the court order clearly referred to the Minister of Communication was because of the context in which the order was issued. She emphasised that she had satisfied herself that she had done her job.
Ms Van Damme made the point that the decision was very simple, and had a requirement that the Minister had to be consulted. She had been consulted, and the board had fulfilled what was set out in the court order.
Mr W Madisha (COPE) said that there was a very serious problem. What the Minister had said was contradictory to what she had said before and in her statement. He suggested that this whole matter be reviewed. As for the vetting, was the board able to provide the results to the Committee? Lastly, he wanted to know whether the fact that this individual was from outside the country was not going to be an issue.
Mr Ndlozi emphasized that the board was not bound by the opinions of the Cabinet and the Minister -- this was the independence of the SABC. He then cautioned the SABC officials, saying that they should not wait for speculation and so forth. If the Minister was interfering and the board allowed that to happen, it would be failing in its responsibilities. This meant that consultation was only to inform the Minister, and the board could move on without her opinion because it was not binding, and neither was Cabinet’s. He urged the board to come report to Parliament if and when the Minister started interfering in its work.
Mr Tseli said that the Committee had no intention of appointing the executives of the SABC because it was not its responsibility. However, it had a political responsibility to ensure that the Committee did not to go back to the issues that had put the SABC where it was now. There should therefore be a special session to talk about these issues, because Parliament had fought tooth and nail to ensure that those issues which had led to the failure of the SABC were completely eliminated and not repeated.
Ms Matshoba supported the motion of convening a special meeting as a Committee, because there were many outstanding issues that need to be dealt with and to be clarified.
Mr Ndlozi disagreed with the motion of clarifying the matter and having a special meeting, because the board was sanctioned and functioning, so it needed to be given an opportunity to do its job.
The Minister responded that she was uncertain about whether it was permissible to circulate the vetting report, and it had not yet been finalised. The Minister of State Security had said that he had received the forms last week Wednesday, and the process was yet to commence. She clarified that there was no intention to interfere with the process, but Members should bear in mind that the court order was being taken on appeal, so there was a possibility that there might be a different outcome of the decision.
ICASA on broadcasting sector compliance with regulations
An Independent Communications Authority of South Africa (ICASA) official said that there were 330 licensed class and individual Broadcasting Service (BS) licensees:
271 community sound licensees (Class)
5 community TV licensees (Class)
9 subscription TV licensees (Individual)
4 free to air TV licensees (e.tv, SABC1, SABC2 and SABC3) (Individual)
27 commercial sound licensees (Individual)
15 public sound licensees (Individual)
However, only 247 of these BS licensees were currently operational.
With regard to broadcasting landscape, there was:
Ongoing compliance monitoring of broadcasting licensees;
Inspection visits at community broadcasting licensees;
Processing of notifications for change of licensee information;
Preparations of annual compliance reports for selected licensees;
Collections of annual licence fees and Universal Service and Access Fund (USAF) contributions;
Referrals of non-compliant licensees to the Compliance and Complaints Committee (CCC) for adjudication (CCC findings were considered and decided on by Council).
For annual reporting, the Broadcasting Compliance Unit endeavoured to assist all licensees to be compliant. However, due to the large numbers, it was impossible to report annually on the compliance of all licensees. Compliance reporting was done retrospectively. With regard to individual licensees’ compliance, licensees largely complied with all legislative, regulatory and licence requirements. However, there had been isolated instances of non-compliance with South African Music Content and licensees’ promises of performance. In addition, e-TV was not fully compliant with the Digital Terrestrial Television Regulations regarding the submission of the agreement with the signal distributor and the tariff structure.
The Chairperson asked about the moratorium.
Mr Wellington Ngwepe, Chief Executive Officer: ICASA, responded that this would be granted in the first term of the next financial year
Ms Newhoudt-Druchen asked about accessible television for deaf people. People had been talking in her constituency about when ICASA would provide this service to deaf people. She had been asking for many years that there must be access for people with disabilities in respect of licensing and compliance. Communities always had a voice, but deaf people did not have a voice because they did not always have access to information on their TV screens, and it was even worse because they did not have access to radio.
Ms Matshoba asked whether access was provided to communities who required licences. Secondly, were there licences available for the communities?
Mr Madisha asked ICASA what it wanted, because when the Chairperson reported this information, he would have to report on what ICASA required in order to fulfil its mandate.
An ICASA official responded that it was mindful of the importance of access to broadcasting to South Africans. Processes had been put in place, as well as regulations, to cater for people with disabilities. ICASA intended to make the process public in order to get more information and public input.
Mr Ngwepe said that no one could apply for a community broadcasting licence due to the moratorium. This had been imposed because of spectrum scarcity. It was in the metros that ICASA had the biggest constraints, but in the rural areas that was not the case.
The meeting was adjourned.
Broadcasting Digital Migration policy; SABC Senior Executive appointment: Minister of Communications briefing
ICASA briefing on Broadcasting Sector Compliance with Regulations
Progress update on the implementation of the Broadcasting Digital Migration (BDM) programme