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Independent Communications Authority of South Africa/ Onafhanklike Kommunikasie-owerheid van Suid-Afrika van Kommunikasie-owerheid Onafhanklike Africa/ of South Authority Independent Communications
•
NOTICE 642 OF 2017 642 OF 2017 NOTICE oI-I otices 00 25 AUGUST 2017 25 AUGUST GAZETTE, VERNMENT N GO This gazette is also available free online at www.gpwonline.co.za eneral
G INDEPENDENT COMMUNICATIONS AUTHORITY OF SOUTH AFRICA OF SOUTH AUTHORITY INDEPENDENT COMMUNICATIONS
ommunications Authority of South Africa (13/2000): Invitation for written representations written for Invitation Africa (13/2000): Authority of South ommunications Independent C No. 41
4 070
642
STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 5
INVITATION INVITATION WRITTEN WRITTEN REPRESENTATIONS REPRESENTATIONS FOR FOR
Authority Authority of terms terms of of of the the Independent Communications In In Section Section South South 4B 4B
(Act (Act Africa Africa submit submit of of 2000), 2000), interested invited invited Act Act hereby hereby No No 13 to to persons persons are
their their written written the the the the representations representations Document Document regarding Discussion Discussion Inquiry Inquiry on on
Subscription Subscription Television herewith into into Broadcasting Broadcasting published the the Services Services by by
Authority. Authority. of the the Document Document will available available made made Discussion Discussion A A be be the the copy copy on on
Authority's Authority's the Authority's website website and and at at at Library Library in in
Street, Street, Katherine Katherine (Ground (Ground 164 164 Pinmill Pinmill Floor Floor Block Farm, Farm, D), No. No. at at Sandton Sandton
16h00, 16h00, between between 09h00 Monday Monday Friday. and and to to
Written Written representations with the the regard regard Document Document must to to Discussion Discussion be be
Authority Authority submitted submitted later the the than than by by 16h00 16h00 October October 2017 31 31 to to post, post, by by on on no no
delivery delivery electronically marked marked specifically Microsoft Microsoft Word) (in (in hand hand and and for for or or
Refilwe Refilwe Pinmill Ramatlo. Ramatlo. Block Block attention: attention: A, A, Delivery Delivery address: Farm, Farm, 164 164
Katherine Katherine Street, Sandton. Sandton. written written should should Where Where possible, also also representations representations
Enquiries Enquiries to: to: mailed mailed be be should should be be
e- e- . .
to to directed directed between between 10h00 10h00 Monday Monday and and to to 011 011 566 -3251/3125; -3251/3125; 16h00, 16h00,
Friday. Friday.
Authority Authority Written Written representation(s) this the the received received by by pursuant pursuant to to notice, notice, will be be
for for Authority's Authority's the the available available inspection interested made made by by at at library. persons persons
of of At At the submits submits who who written written to to this request request representations representations pursuant any any person person
that that Authority Authority determine determine the the notice, notice, portion portion representations representations such such may may or or any any
thereof thereof be be of of terms terms of treated treated the the confidential confidential to to section section Act. Act. 4D 4D ICASA ICASA in in is is as as
confidentiality confidentiality the the Where Where for for request request the the the request refused, refused, who who made is is person person
will will allowed allowed such such be be withdraw withdraw portion(s) portion(s) thereof. to to representations representations or or
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6 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
abbreviations abbreviations List List of of
British British Telecommunications BT BT
Customer Customer Equipment Equipment Premises Premises CPE CPE
Entertainment Entertainment Digital Digital Demand Demand DEOD DEOD on on
Satellite Satellite Digital Digital DSAT DSAT
DTH DTH Direct Direct Home Home To To
Terrestrial Terrestrial Digital Digital DTT DTT Transmission Transmission
Digital Digital DVB DVB Broadcasting- Broadcasting- Handheld Handheld Video Video -H -H
European European Commission EC EC
Electronic Electronic Communications ECA ECA Act Act
Electronic Electronic EPG EPG Programme Programme Guide Guide
European European EU EU Union Union
Index Index Herfindhal- Herfindhal- Hirschman Hirschman HHI HHI
Authority Authority Independent Independent Broadcasting Broadcasting IBA IBA
Authority Authority of Independent Independent Communication Communication South South Africa ICASA ICASA
Information Information Communication Communication Technology ICT ICT and and
Internet Internet Television Television Protocol Protocol IPTV IPTV
Apply Apply ITA ITA Invitation Invitation to to
of of National National NAB NAB Association Association Broadcasters
National National Consumer Commission NCC NCC
Digital Digital Media Media ODM ODM On
for for Organization Organization Cooperation Cooperation OECD OECD Development Development Economic Economic and and
of of Communications Communications Office Office OFcom OFcom
OTT OTT Over Over The The Top
OVHD OVHD View View Open Open HD HD
PSL PSL Premier Premier Soccer League League
Corporation Corporation Limited Limited South South African Broadcasting SABC SABC SOC SOC
South South African Communications SACF SACF Forum Forum
Significant Significant Small Small SSNIP SSNIP test test but but Transitory Transitory Increase Increase Prices Prices Non Non in in
Television Television TNT TNT Terrestre Terrestre Numerique Numerique
of of Associations Associations Football Football Union Union UEFA UEFA European European
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 7
a a
EXECUTIVE EXECUTIVE SUMMARY 1. 1. 5 5
Introduction Introduction 1.1 1.1 5 5
subscription subscription African African broadcasting 1.2 1.2 The South sector sector 6 6
of of the the television television Competition Competition subscription subscription 1.3 1.3 in in context context 9 9
of of the the Submission Submission 1.4 1.4 in in comments comments Document to to Discussion Discussion response response 11 11
INTRODUCTION INTRODUCTION 2. 2. 12 12
framework framework within 2.1 2.1 which Legal Legal inquiry inquiry this this conducted conducted is is 12 12
2.2 2.2 Process Process 16 16
Confidentiality Confidentiality 2.3 2.3 23 23
jurisdiction jurisdiction 2.4 2.4 Concurrent 24 24
3. 3. THE THE SCOPE SCOPE INQUIRY INQUIRY AND AND THE THE PURPOSE PURPOSE OF 27 27
3.1 3.1 Overview Overview 27 27
3.2 3.2 and and of of the inquiry Scope Scope 28 28 purpose purpose
4. 4. OVERVIEW OVERVIEW THE THE AFRICAN SOUTH SOUTH OF OF TELEVISION TELEVISION BROADCASTING BROADCASTING
SERVICES SERVICES SECTOR SECTOR 32 32
4.1 4.1 Overview 32 32
regulatory regulatory framework 4.2 4.2 legislative and and Policy, Policy, overview overview 32 32
4.3 4.3 Market Market overview overview 38 38
television television Public Public 4.4 4.4 broadcasting broadcasting 41 41
4.5 4.5 Community television broadcasting broadcasting 42 42
4.6 4.6 television television broadcasting broadcasting Commercial Commercial 42 42
-air -air 4.7 4.7 television broadcasting broadcasting Free Free -to -to 42 42
4.8 4.8 Subscription television broadcasting broadcasting 43 43
4.9 4.9 Developments Developments Future Future 44 44
4.10 4.10 Digital Digital migration migration 45 45
DEFINITION DEFINITION MARKET MARKET 5. 5. 46 46
5.1 5.1 Overview Overview 46 46
5.2 5.2 Approach market market definition to to 47 47
Relevant Relevant Substitution Substitution Market: Market: Product Product -side -side Demand Demand 5.3 5.3 48 48
Relevant Relevant Substitution Substitution 5.4 5.4 Market: Supply Supply -side Product Product 49 49
Relevant Relevant Market Market 5.5 5.5 Geographic 49 49
Definition Definition Subscription 5.6 5.6 Market Broadcasting in in 49 49
markets markets 5.7 5.7 Downstream retail 52 52
markets: markets: 5.8 5.8 Upstream wholesale Channel Channel provision provision 59 59
markets: markets: Content 5.9 5.9 Upstream wholesale provision provision 61 61
5.10 5.10 Technical Technical Services Services 66 66
CONSIDERATION CONSIDERATION 6. 6. THE THE EFFECTIVENESS OF OF COMPETITION COMPETITION IN RELEVANT RELEVANT OF OF
MARKETS MARKETS 67 67
Overview Overview 6.1 6.1 67 67
6.2 6.2 Approach Approach Proposed Proposed 68 68
for for Market Market 6.3 6.3 Upstream wholesale for for of of content: content: the the Acquisition Markets Markets
Cricket, Cricket, Premium Premium Soccer, Soccer, Rugby, Live Live Subscription Subscription First First Movies Movies and TV TV -run -run
for for other other Distribution Distribution Content Content Premium Premium Retail Retail South South Africa in in 69 69
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8 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
for for 6.4 6.4 Upstream Market: Market the for for of of Acquisition Acquisition -Premium Content Non Non
Distribution Distribution South South Africa Africa in in 77 77
for for the the 6.5 6.5 Downstream Market Retail Retail of of Distribution Distribution Tier Premium Premium and and Basic
Subscription Subscription Television Broadcasting Broadcasting Channels Channels 77 77
7. 7. WITH WITH CONSIDERATION CONSIDERATION LICENSEES LICENSEES OF OF SIGNIFICANT SIGNIFICANT 81 81 MARKET MARKET POWER
COMPETITIVE COMPETITIVE POSSIBLE POSSIBLE PRO- PRO- 8. 8. CONDITIONS CONDITIONS 83 LICENCE LICENCE
Overview Overview 8.1 8.1 83 83
8.2 8.2 Shorten exclusive contracts contracts 84 84
Introduce Introduce unbundling unbundling 8.3 8.3 85 85
splitting splitting Impose Impose rights 8.4 8.4 85 85
Impose Impose wholesale- 8.5 8.5 -offer -offer must must 86 86
firm's firm's dominant dominant network network 8.6 8.6 Open Open 87 87 up up
Introduce Introduce -operability -operability 8.7 8.7 box box inter inter -top -top set set 87 87
9. 9. CONCLUSION 88 88
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 9
EXECUTIVE EXECUTIVE SUMMARY 1. 1.
Introduction Introduction 1.1 1.1
This This of of of of Document Document 1.1.1 1.1.1 published published Discussion Discussion being being in in is is terms terms section section 4B 4B
the the for for of 67(4) 67(4) of with with the the the section section ICASA ICASA Act, read ECA, ECA, purposes purposes
inquiry inquiry into subscription television television broadcasting South South services services in in an an
Africa. Africa.
that that the the Authority 1.1.2 1.1.2 conduct 2016, 2016, would would announced announced 24 24 June On On it it an an
inquiry inquiry into into the subscription television broadcasting The The sector. sector.
ultimately ultimately objective objective of inquiry determine determine whether there the the is is to to are are
competition competition require the the the which which action issues issues by by in in taken taken sector, sector, to be be
of of Authority Authority through through the conditions conditions imposition imposition -competitive -competitive pro pro on on
of of for relevant relevant primary primary object the the the licensees. licensees. The ECA ECA to to provide provide is is
regulation regulation of electronic South South Africa Africa communications communications the public public in in in in
for for that other other interest interest and and to, to, things, things, promote amongst amongst purpose purpose
competition competition the the the Further, Further, in in of of object object the the sector. sector. Broadcasting Broadcasting ICT ICT
to to broadcasting broadcasting policy Act Act establish Africa Africa and and develop is is South South in in in a a
that that for for the the other public public and and to, to, things, interest interest amongst amongst purpose purpose ensure
fair fair competition competition the broadcasting broadcasting in in matters matters sector. sector. Competition are are
of of the the specifically specifically regulated under Chapter ECA. ECA. In In terms of section section 10 10
67(4) 67(4) of the Authority Authority the the conduct conduct ECA, ECA, must must inquiry prior to an an
that that market market markets markets regulations regulations prescribing prescribing define define and and segments, segments,
if if determine determine there ineffective ineffective is is competition competition markets, such such and in in
identify identify with with significant licensees licensees market market appropriate appropriate whom whom power power upon upon
sufficient sufficient and and licence -competitive -competitive conditions conditions imposed imposed be be to to may may pro pro
with with identified identified market deaf deaf failure. failure. any any
of of fulfilling fulfilling In In mandate mandate 1.1.3 1.1.3 promoting promoting competition within the its its ICT ICT sector, sector,
Authority Authority the the collecting collecting been been form form of the the evidence, evidence, in in has has a a
questionnaire questionnaire which which stakeholders invited invited to complete, conducting conducting were were
with with certain certain stakeholders, benchmarking meetings meetings -on -on -one one one
desktop desktop carrying carrying analysis exercises exercises research, and and and and has been out out to
of of the the preliminary preliminary operation operation subscription understanding understanding gain gain of of a a
television television for for broadcasting broadcasting the South South Africa services services and and in in outcome outcome consumers. consumers.
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10 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Authority Authority order order Document Document 1.1.4 1.1.4 publishing publishing this solicit The The Discussion is is to to in in
it it of of for for initial initial what what the the implies implies views views analysis its its and and operation operation on on on
subscription subscription the the television broadcasting broadcasting South Africa. the To To sector sector in in
further further Authority Authority extent extent the the information obtain obtain also also seeks, to to necessary, necessary,
will will that that it it relevant relevant market markets markets assist assist defining the and and in in segments, segments,
determining determining the of of competition the the markets effectiveness effectiveness defined defined in in or or
market market market market identifying with with significant segments, segments, licensees licensees power, power,
if if that that -competitive -competitive conditions conditions and, and, proposing needs needs be, be be may may pro pro
/s. /s. imposed imposed licensee such such on on
Authority Authority
yet yet the of of 1.1.5 1.1.5 existence existence conclusion conclusion The The reached has has not not any any on on a a
problems problems of of competition competition the the the subscription television in in context context
Authority Authority the the sector sector will will broadcasting broadcasting South South Africa. The The in in responses responses use use
if if further further to to this Document Document to determine what Discussion Discussion steps, steps, any, any,
taken. taken. should should be be
African African subscription broadcasting The The South 1.2 1.2 sector sector
1.2.1 1.2.1 The broadcasting general general changes changes in in sector sector undergone undergone various has has and
of of the tremendous tremendous growth number of of terms terms operators, operators, licensed licensed in in
of of the the viewers, viewers, White White and and the the publication since since Paper Paper revenues revenues on on
of of the the 1998) 1998) the the Broadcasting Broadcasting Broadcasting Broadcasting and and (in (in commencement commencement Act Act
the the 2005). (in (in 1999) (in (in and and ECA ECA
there there 1.2.2 1.2.2 three three subscription television In In Africa, Africa, broadcasting broadcasting South South are are
providers: providers: service service
1.2.2.1.1 1.2.2.1.1 satellite satellite provides: provides: MultiChoice, MultiChoice, which (1) (1) subscription subscription DTH DTH a a
broadcasting broadcasting (2) (2) terrestrial service; service; service, service, DStv DStv which which its its and and is is a a
broadcasting broadcasting -Net -Net subscription subscription service, which which service. its its is is M M
which which -to -to 1.2.2.1.2 1.2.2.1.2 satellite satellite direct -home -home subscription StarSat, StarSat, provides provides a a
broadcasting broadcasting service; and and
1.2.2.1.3 1.2.2.1.3 direct -to satellite satellite -home -home subscription Deukom, Deukom, which provides a a
broadcasting broadcasting service.
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 11
1.2.3 1.2.3 Broadcasting impacted general general services services being being the the advent of by by in in are are
the the Internet technological technological advancement. and and
there there At At this providers providers subscription 1.2.4 1.2.4 of of television television stage, stage, DTT DTT are are no no
that that digital digital Africa Africa services services South given in in the the migration not not is is process process
underway. underway. In subsequent due due and and -off, -off, yet yet to to analogue analogue switch course course
the the digital digital subscription subscription with channel, channel, together together incentive incentive -Net -Net M M any any
authorised authorised provide, -Net -Net channels channels is is be be M M to to will provided provided DTT. DTT. on on
Authority Authority the the 1.2.5 1.2.5 In In its Position Position Paper IPTV IPTV and regards regards services services VOD VOD on on
individual individual broadcasting broadcasting services services services IPTV IPTV that that require require class class as as or or an an
broadcasting broadcasting service Whilst licence. licence. for for regulations regulations prescribed prescribed were were no no
Authority Authority of of the the subscription IPTV IPTV not not services services IPTV IPTV is is aware aware any any
television television broadcasting that that currently currently provided, provided, services services being being are are
distributed distributed television television where where channels channels Internet Internet broadband broadband are are over over or or an an
network. network.
Authority Authority 1.2.6 1.2.6 mobile mobile With With the the respect respect services, 2010 2010 to to issued issued in in spectrum spectrum
Multichoice Multichoice licences licences and and for for of the the to to e.tv provision provision mobile mobile TV TV and and
the the technology. services services -H -H DVB DVB trial trial Consortium Consortium given given Mobile Mobile TV TV on on was was
provide provide mobile licences licences to to the the technology. services services TV TV DBM DBM on on
deterrent deterrent 1.2.7 1.2.7 broadband broadband data crucial crucial high high and and Access Access to to to costs costs remain a a
of of growth growth television. mobile mobile
other other through through 1.2.8 1.2.8 accessible accessible and and OTT OTT content content premium premium mobile mobile services services is is
they they applications applications although with with generally generally accessed accessed by consumers consumers are are
premium premium subscriptions.
In In subscription subscription television 1.2.9 1.2.9 South South primarily primarily Africa Africa services services accessed accessed are are
satellite. satellite. basis basis via DTH DTH on on a a
providers providers The The -air -air -to -to 1.2.10 1.2.10 the the broadcaster free free the public which SABC, SABC, are are
broadcasts broadcasts currently currently three three the the only which which channels, channels, and and is is e.tv e.tv
commercial commercial -air -air -to -to television television free free broadcasting broadcasting analogue analogue licensee. licensee. These
the the digital migrated migrated -Net, -Net, services, services, will like like be be DTT M M pursuant pursuant to to to
Authority Authority currently currently migration migration conducting conducting The The to to is is process process process. process. a a
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12 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
additional additional free license license -air -air -to -to television television broadcasters broadcasters provide to to DTT DTT
services. services.
of of providers providers 1.2.11 1.2.11 Several video video demand demand services have have launched services services on on
South South Africa recent recent (provided include: include: Showmax Showmax These These by by in in in in years. years.
MultiChoice, MultiChoice, which also also the the subscription subscription service), Netflix, provides provides DStv DStv
Digital Digital Entertainment Entertainment others. others. Demand Demand Unlike Unlike (DEOD) (DEOD) and and on on
subscription subscription television broadcasting broadcasting
of of providers providers video video licensees, licensees, on on
demand demand of of not not the services services licensed licensed and and in in terms terms not not ECA ECA are are are are
directly directly regulated regulated the the Authority. by by
Authority Authority growth growth the the television although the 1.2.12 1.2.12 Despite Despite and and has has in in sector, sector,
granted granted additional to to provide provide subscription television licences licences
limited limited broadcasting broadcasting services, these additional licensees licensees have had had
Authority Authority yet. yet. received received The The also also has has to to requests requests success success as as numerous numerous
examine examine the subscription relation relation broadcasting broadcasting sector sector impact to to its its in in
-to -to -air broadcasters. broadcasters. free free channels channels Free Free -air -air -to -to accordingly accordingly are are on on
for for of of total smaller smaller than than competing competing other other proportion proportion in in a a revenue revenue
that that benchmark benchmark countries. This This -air -air -to -to television television free free suggest suggest less less is is may may
offer offer alternative alternative likely likely to viable viable subscription to to to to services act and and a a as as
significant significant constraint subscription subscription television this this market. services services in in on on a a
likely likely the television 1.2.13 1.2.13 Forthcoming developments which which to to impact are are on on
broadcasting broadcasting sector sector include: include:
1.2.13.1 1.2.13.1 the digital migration the which which expected expected to to increase is is process process range range
that that of of content content delivered delivered services services and and
-to- -to- to to both both free free are are users on on a a
air air subscription subscription basis; basis; and and and and
availability availability 1.2.13.2 1.2.13.2 platforms platforms of of increasing increasing of of for for the delivery delivery television television new new
content. content.
market market 1.2.14 1.2.14 subscription The The tv tv highly highly concentrated. Contestability remains remains
market market the the in in limited limited barriers barriers to to brand high high by by be be entry, entry, to to appears appears
loyalty loyalty high high and and customer customer switching switching others. costs, costs, among among
there there 1.2.15 1.2.15 Where Where exhibit exhibit of of likely likely competition competition the market lack lack is is is is to to
quality quality limited limited outcomes outcomes products. high high prices low low choice, choice, and and such such as as
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 13
of of the the subscription subscription Competition Competition in in 1.3 1.3 context context television television
first first subscription subscription television broadcasting broadcasting 1.3.1 1.3.1 The The service service South South Africa in in was was
Multichoice Multichoice launched launched by by the the subscription subscription only only Mnet Mnet 1986. remained in in
of of provider provider until the the television television service service launch launch Digital Digital TopTV TopTV by On- Media Media
2010 2010 Duekom Deukom Deukom (ODM) (ODM) and and TV TV by in in (Deukom) (Deukom) (Pty) (Pty) 2012. 2012. Ltd Ltd in in
markets markets 1.3.2 1.3.2 Subscription generally driven by by tv tv to to content content premium premium are are access access
exclusive exclusive Whilst exclusive basis. basis. contracts contracts certain certain be be in in may may on on an an necessary necessary
other other they they nevertheless nevertheless instances, instances, challenges challenges the the market create create such such in in may may as as
the the driving driving creating creating barriers and and of of entry entry content content to to premium premium price price well well up up as as as
first first the the reinforcing reinforcing advantage. advantage. This This struck struck delicate delicate requires requires balance balance be be mover mover to to a a
Authority Authority market market the the these these when when addressing by by outcomes. outcomes.
Authority's Authority's preliminary identification identification 1.3.3 1.3.3 The of of definition definition relevant the the and and
that that markets markets with the value value correspond correspond of of subscription subscription television chain chain
broadcasting broadcasting follows. follows. services services is is as as
for for Authority Authority the the the the 1.3.4 1.3.4 At wholesale wholesale level level content content provision, provision, to to define proposes proposes
the the following markets:
for for market market the the (a) (a) of of first- acquisition acquisition window window subscription television a a
broadcasting broadcasting for for distribution distribution retail retail Africa; premium premium movies South South in in
for for (b)a (b)a market market the the of of for acquisition acquisition premium matches matches live live soccer soccer
distribution distribution retail retail television Africa; Africa; South South in in
for for market market the the (c) (c) for for of of rugby rugby acquisition acquisition premium matches matches live live a a
distribution distribution retail retail television Africa; Africa; South South in in
for for (d)a (d)a market market for for of of cricket cricket the the acquisition premium matches matches live live
retail retail television distribution distribution Africa; Africa; South South in in
for for market market (e) (e) of of for other other premium premium the the acquisition retail retail content content a a
television television distribution distribution Africa; Africa; South South and and in in
(f) (f) market market
for for for for of -premium -premium the the acquisition retail retail content content non non a a
distribution distribution television television South South Africa. in in
This gazette is also available free online at www.gpwonline.co.za 14 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017 y I nl al 3 cu ' (xD re -t re 3- (D Ó (D d (D lh c -O Q Ñ ñ rt m -s vi c O' n n ö 3 C v -o -o -7 n OJ 3 fD N O rt Q rÇr O 3 3 N O c S f1 nl
, i ß ni 3 al m re Ó -I re Dr Ó (D Ó (D (D tn c Oy - fD 3 C 3 rr. (D -1 Ill c Ñ n -1. rt Ö 7 tit C .-. v .-. -v -ci -Z -o v
Authority Authority the the retail the following markets: level, level, At At to to the the 1.3.6 1.3.6 define proposes proposes
for for distribution (a) (a) the retail market market of premium premium subscription -television a a
Africa; Africa; South South channels channels and and in in
for for distribution distribution the the retail -tier -tier of of market market (b) (b) subscription -television basic basic a a
South South Africa. channels channels in in
Authority Authority the the the the technical level, the the following 1.3.7 1.3.7 At services define define to to proposes proposes
market: market:
for for the wholesale wholesale for for of of market market (a) (a) technical technical services required supply supply a a
subscription- subscription- television operating operating broadcasting service South South in in a a
Africa. Africa.
order order of of determine determine the competition competition 1.3.8 1.3.8 In effectiveness these these to to proposed proposed in in
has has Authority Authority the the markets, markets, the (including (including the the provisions considered considered section in in ECA ECA
other other of of 67(4A) 67(4A) the the sectors sectors approaches approaches South Africa well well used used ECA) ECA) in in in in as as as as
other other jurisdictions. preliminary preliminary performed performed assessment assessment the Having Having and and in in on on a a
that that Authority's Authority's information information there initial initial ineffective the the available, available, view view possibly is is is is
that that markets markets competition competition the the defined. defined. have have been been in in
form form of markets markets barriers the 1.3.9 1.3.9 characterised characterised The The by high high in in entry entry to to are are
start start requirements requirements at during during operations the upstream capital capital both level. level. and and at at up up
At At loyalty. loyalty. switching switching with the the retail brand brand coupled coupled face face level level high costs costs consumers consumers
entrants entrants advertising advertising requires requires to devote lot of possibly possibly This This and and to to resources resources new new a a
market market order order subsidising subsidising gain gain share. in in to to consumers consumers 1-1 o
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 15
of of preliminary preliminary the the conducted conducted dominance, analysis analysis of of facilities facilities control control essential essential a a
integration. integration. vertical vertical and and
of of In In terms 67(4) 67(4) of the the 1.3.11 1.3.11 section section ECA, ECA, this this inquiry, the the following following and and
Authority Authority impose impose and and -competitive -competitive sufficient sufficient appropriate appropriate must must licence licence pro pro
that that conditions conditions have have found licensees licensees been been market market to to significant on on power power possess possess
market market markets markets defined defined and and in in there there ineffective ineffective competition. segments segments where is is
that that Authority Authority considered considered remedies have have The The been been has has other other applied applied in in
of of the the jurisdictions jurisdictions this this and, and, in in context context stakeholders' stakeholders' Document, Document, Discussion Discussion seeks seeks
of of the the application application these these views views possible possible the the context. remedies remedies South African in in on on
of of shortening shortening the duration remedies remedies include: long long Such Such term term contracts; imposing imposing
divestiture; divestiture; rights rights splitting rights rights and and -offer; -offer; must must imposing imposing wholesale- and and
interoperability. interoperability. requiring requiring set -top box box
interested interested invited invited 1.4.1 1.4.1 All All to to submit written representations representations parties parties are are on on
Authority's Authority's it it for for what what the the initial the the operation implies implies analysis analysis and and on on
television television broadcasting broadcasting of of subscription subscription Africa, Africa, South South services services and and in in to to
their their written written opportunity opportunity whether whether representations representations indicate indicate in in is is an an
Authority. Authority. representations representations the required required make make oral The to to to to responses responses
that that Authority Authority Authority the the the from from stakeholders will will enable receives receives
other other things, the relevant various various findings relating make make to, to, amongst to to
market market market market definitions, there effective and and segment segment whether is is
whether whether relevant relevant market competition competition markets markets those those in in and and segments, segments,
significant significant those those markets licensees licensees have market market and and in in any any power power
whether whether market market there ineffective ineffective where where and and is is competition, competition, segments segments
appropriate appropriate -competitive conditions conditions should should imposed licence licence be be pro pro on on
if if significant significant market remedy remedy the those those having having licensees licensees to to any, any, power, power,
Authority's Authority's market market failure. findings findings will Findings Findings The The be be in out out set set a a
Document. Document.
that that 1.4.2 1.4.2 the the It It important important to Authority yet yet final final not not note note reached reached has has is is any any
markets markets views views conclusions conclusions definition definition of market the the or or on on or or any any 11 11
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16 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
whether whether there there effective competition segments, segments, those those markets in in is is or or
market market whether significant significant market segments, segments, licensee licensee have power power any any
-competitive -competitive market market whether those those markets and and in in segments, segments, or or pro pro
Authority Authority conditions conditions will imposed imposed licence licence should licensee. licensee. The be be any any on on
to to the the the Document Document the the consider Discussion Discussion to to responses responses use use
whether whether there applicable applicable decide decide issues issues and and to to requiring requiring issues issues are are
further further of of involve involve the making regulations action, action, which due due in in may may
course. course.
INTRODUCTION INTRODUCTION 2. 2.
within within framework framework this inquiry which which conducted conducted 2.1 2.1 Legal is is
Authority Authority Independent Independent 2.1.1 2.1.1 (referred (referred Communications Communications of South South Africa The The to to
"the "the Authority Authority of ") ") "ICASA" "ICASA" has has intention intention to given given notice its its or or as as
of of conduct conduct inquiry subscription subscription into into the competition competition state state television in in an an
of of broadcasting broadcasting the the services services in in terms terms of section section Act, Act, and ICASA ICASA 4B 4B
preliminary preliminary information gathering inquiry inquiry with with commenced commenced
an an on on a a
for for voluntary voluntary the of with with publication questionnaire basis basis interested interested a a
stakeholders stakeholders complete. complete. to to
of of this 2.1.2 2.1.2 the the publication With With of of terms terms Document, Document, section section Discussion Discussion is is in
of of of the the the with with Act, Act, ICASA ICASA 4B 4B read and Act Act section section section section ICASA ICASA 4C 4C
67(4) 67(4) of of the the This This ECA. ECA. the the inquiry inquiry into competition state state in in
subscription subscription television broadcasting broadcasting convened convened line line is is the the with with services services in in
Authority Authority of of the the functions functions the and and in in out out the Constitution, Constitution, set set purpose purpose
together together the the the the and and ECA ECA with with the Broadcasting Broadcasting Act, Act, Act, ICASA ICASA
underlying underlying regulations regulations where where applicable.
independent independent 2.1.3 2.1.3 regulatory regulatory authority, which which ICASA ICASA been has has is is an an
of of the the established established of of terms terms the the Act. Act. Section Act sets ICASA ICASA ICASA ICASA 4 4 in in
of of the the functions the the 4(1) 4(1) of Authority. Authority. out out the the Section Section Act Act ICASA ICASA
that that Authority Authority the the the provides provides the the must must perform perform exercise exercise and and powers powers
conferred conferred and and the the it it the duties duties Act Act imposed imposed by by ICASA ICASA and and upon upon
including including the the underlying underlying statutes, the the Broadcasting Broadcasting and and ECA ECA In In Act. Act.
4(3)(m) 4(3)(m) the the Authority terms terms of of of the section section ICASA ICASA Act, Act, - -
jurisdiction.." jurisdiction.." its its "may "may undertake inquiries within within matter matter any any on on
12 12 ICASA ICASA
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 17
effect effect this this the the of of the the to to function, out out section section Act Act give give 4B 4B ICASA To To sets sets
of of be be that that the the the the Authority inquiries inquiries conducted conducted by by and and may may scope scope
Authority Authority the the followed followed be be to to inquiries. inquiries. In conducting conducting by by such in in process process
the the 4B(1) 4B(1) of of terms terms of Act Act section section ICASA ICASA - -
Authority Authority
"The "The matter matter inquiry inquiry into into regard regard conduct conduct with with to may may an an any any - -
(a) (a) achievement objects objects the the the of of of this this Act underlying the the or or
statutes; statutes;
(b) (b)
......
(c) (c)
......
(d)... (d)...
of of its its functions and duties (e) (e) the exercise and performance powers, powers,
of of this this statutes." statutes." Act Act terms terms the the underlying in in or or
statutes statutes the the underlying underlying the referred referred include include both The The ICASA ICASA in in to to Act
the the Broadcasting Broadcasting Act and and ECA. ECA.
of of object object the establish establish develop Broadcasting Broadcasting Act The The and and is is to to a a
for for that interest interest the the broadcasting broadcasting public public policy policy South Africa in in and and in in
fair fair to, to, amongst other things, competition competition the in in purpose purpose ensure ensure
2(h) 2(h) of the sector sector broadcasting broadcasting (section (section Broadcasting Act).
for for of of primary primary object of the the the regulation provide provide The The ECA ECA is is to to
for for the the electronic electronic communications South South public Africa Africa and and in in interest interest in in
that that other other to, to, things, things, (1) within amongst amongst promote competition purpose purpose
2(f) 2(f) the the sector sector of of of the the (in (in ICT ICT section and and ECA), ECA), (2) (2) terms terms promote promote an an
fair fair of of environment environment -discriminatory and and to to open, open, non non access access
networks networks broadcasting broadcasting services, electronic communication and and to to
electronic electronic (in (in of of terms terms 2(g) 2(g) of the communications communications services services section
ECA). ECA).
Competition Competition electronic relating relating broadcasting matters matters to to and and
communications communications regulated regulated under of of terms terms the the Chapter Chapter In In 10 10 ECA. ECA. are are
of of 67(4) 67(4) the Authority of of the the must must section section ECA, ECA, - -
"...following "...following inquiry, inquiry, regulations regulations defining prescribe prescribe the an an
relevant relevant and markets markets market segments segments and impose impose 13 13
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18 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
sufficient sufficient -competitive appropriate appropriate and and conditions conditions licence licence pro pro
ineffective ineffective there there and and licensees licensees where if if is is competition, competition, on on any any
market market significant significant licensee licensee has has such markets markets in in power power or or
market market segments." segments."
The The other other things, (1) 2.1.9 2.1.9 regulations regulations relevant relevant must, must, define define wholesale among among
(2) (2) markets markets market determine determine whether retail retail and and there there segments, segments, is is or or
market market effective effective competition those those relevant markets and and in in segments, segments,
(3) (3) determine determine which, which, if if significant significant market licensees licensees have in in any, any, power power
market market there there those those markets and and ineffective ineffective segments segments where is is
(4) (4) competition, competition, appropriate appropriate impose impose -competitive -competitive conditions conditions licence licence pro pro
those those market market significant significant having having licensees licensees remedy remedy the to to on on power power
market market failure, failure, (5) which which schedule schedule of of Authority Authority out out terms the set set in in a a
the the markets undertake undertake periodic review review will will market market of of segments; segments; and and
for for (6) (6) monitoring monitoring provide provide and and and and of of -competitive -competitive investigation investigation anti anti
market market the the relevant market behavior behavior in in and and segments. segments.
In In of of terms terms of 2.1.10 2.1.10 67(4A) the the section section when whether whether there determining determining ECA, ECA,
effective effective competition markets and and is is Authority Authority market market segments, segments, the in in
other other (1) the must must things, things, consider, consider, -transitory -transitory (structural, among among non non
regulatory) regulatory) barriers barriers the legal legal and entry entry market market to to markets applicable applicable or or
the the (2) (2) dynamic and and of of character character functioning the the segments, segments, and and
market market markets markets including including of of relative relative segments, segments, assessment or or an an
of of market market the share share licensees licensees of of various various providers providers services services exempt exempt or or
market market the the markets forward and and in in looking looking segments, segments, or or assessment assessment a a
of of market market the the relative of of licensees licensees the the the markets market in in power power or or
segments. segments.
2.1.11 2.1.11 Further, that that 67(5) 67(5) of the significant significant provides provides section section licensee licensee has has ECA ECA a a
market market market market if if that that dominant, dominant, segment segment licensee licensee in in has is is or or power power a a
of of facility, facility, control control essential essential
vertical vertical relationship the the has has that that or or an an a a
Authority Authority determines determines could could harm competition. competition.
of of 2.1.12 2.1.12 67(4B) 67(4B) the the Section Section that, that, subject subject provides provides ECA ECA of of to to the the section section 4D 4D
Authority Authority to to provide the required required Act, Act, licensees ICASA ICASA to to are are any any
that that Authority Authority Authority information information the the the the specified specified by by so so may may carry
its its duties of of terms terms out out of the the section section 67 67 in in ECA. ECA. 14 14
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 19
background, background, 2.1.13 2.1.13 of of this this this the the Against Against Document Discussion Discussion is is to to purpose purpose
consult consult order order interested interested stakeholders' stakeholders stakeholders with with obtain all all in in to to
the the Authority's Authority's preliminary preliminary views views views analysis, obtain and and and to to on on
further further that Authority Authority information information findings, findings, the the making making will will assist in in any any
result result the Authority of regulations regulations making making which which in in in terms terms section section may may
67(4) 67(4) of the the the following ECA, ECA, on on - -
of of market market definitions definitions the relevant markets markets and and segments segments in in
the the subscription television television broadcasting sector; sector; services services
/s /s of of the the market effective effective assessment assessment defined defined competition competition in in an an
market market segments; segments; or or
of of market market identification identification with with licensees licensees significant significant in in power power an an
there there markets markets market where where and and ineffective ineffective segments segments is is
competition; competition; and and
of of the the possible possible -competitive -competitive imposition imposition appropriate licence licence pro pro
that that conditions conditions with significant imposed imposed licensees licensees be be may may on on
market market power. power.
of of 2.1.14 2.1.14 this this The The of of following following outcome outcome Document, period period public Discussion Discussion a a
consultations, consultations, will Findings Findings be be that that the the Document Document a a expresses expresses
Authority's Authority's the the view view position and and Authority's Authority's initial initial the the issues, issues, and and on on
this this analysis, analysis, views views contained and and it it Document. Document. Should Should Discussion Discussion in in as as
warranted, warranted, flowing flowing be be the the to to from from Document, Findings Findings or or necessary necessary
draft draft regulations, regulations, publish publish with with separate separate its its public a a process process own
consultation consultation schedule schedule will followed be be of of 4(4) terms terms to to 4(6) sections sections in in
of of the the and and all interested interested affected affected stakeholders will have have and and ECA, ECA, an an
participate participate fully opportunity opportunity to this this in in process. process.
After After taking taking 2.1.15 2.1.15 all all draft draft regulations regulations into the the submissions submissions the account, account, on on
then then Authority Authority 67(4) 67(4) of regulations regulations under the publish publish final section may may
of of (i) (i) the with with relevant markets section section 4 the which which read read in in ECA, ECA, ECA, ECA,
(ii) (ii) the the Authority market market segments segments defined, defined, makes makes or or are are a a
determination determination relevant relevant markets to to effective competition those those in in or or as as
(iii) (iii) Authority Authority determination determination market market the segments, segments, makes makes which which to to as as a a
if if market market significant significant those those markets licensees, licensees, have and and in in any, any, power power
market market there there ineffective (iv) segments segments where competition, competition, is is 15 15
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20 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
-competitive -competitive appropriate appropriate conditions conditions imposed imposed licence licence those those pro pro are are on on
significant significant market having having licensees licensees the the market to to remedy remedy power, power,
Authority Authority of of failure, failure, (v) the schedule schedule which is is terms terms out out set set will will in in a a
of of undertake undertake the the markets periodic periodic market market segments, segments, reviews reviews and and and and
for for (vi) (vi) provision provision made made and and is is of of anti- monitoring monitoring investigation investigation
competitive competitive behavior the relevant markets markets market segments. segments. and and in in
2.2 2.2 Process
of of In In mandate mandate 2.2.1 2.2.1 its its the the terms terms to promote competition sector sector ICT ICT and and in in
fair fair competition competition the the broadcasting Authority Authority the the to to sector, sector, in in has has ensure ensure
collecting collecting evidence evidence been been and and out out carrying carrying to to understand the analysis analysis
of of subscription subscription television operation operation broadcasting services services South South in in
of of this Africa. Africa. Much Much has has through through engaging engaging with achieved achieved been been
stakeholders, stakeholders, conducting conducting and and by market market desktop desktop research. and and
Authority Authority the the 2.2.2 2.2.2 July July 2016, published published On On 11 11 the the Government notice notice in in a a
Gazette Gazette of of intention intention inquiry inquiry giving giving notice conduct conduct its its to to into into an an
subscription subscription television broadcasting broadcasting of of of of services services section 4B 4B in in terms terms
(the (the the the that that "). "). Authority Authority In In the "Notice "Notice the Act Act noted noted Notice, Notice, ICASA ICASA
five five despite despite having issued issued subscription subscription broadcasting service licences licences in in
further further subscription subscription 2007 2007 and and two two broadcasting broadcasting service service licences licences in in a a
three three only only licensees licensees operations. operations. 2015, 2015, of the have have commenced One One
sustainability sustainability
licensees licensees faced through through challenges challenges and and had to to go go a a
business business remaining remaining subscription broadcasting The The rescue rescue process.
who who licensees licensees with with service service licences licences issued issued and and 2007, 2007, 2015 2015 in in were were
yet yet the the Authority not not started respectively, respectively, operations. operations. such, such, have have As As
that, that, the the commitment mandate mandate noted noted its its Notice Notice due due and and in in to to to to ensure ensure
that that effectively effectively competitive, markets markets it it inquiry inquiry commencing commencing are are was was an an
into into subscription television broadcasting services. services.
Authority Authority the the outlined outlined the followed during during 2.2.3 2.2.3 Notice Notice The The by be be to to process process
of of the the the inquiry: inquiry: course course
information information 2.2.3.1 2.2.3.1 gathering gathering would would First, First, be be stage stage conducted in in an an
with with "section accordance accordance Act" Act" of of the the (which, (which, discussed discussed ICASA ICASA 4C 4C as as
later later below, below, Authority), Authority), erratum erratum the the corrected corrected which which would by by was was an an 16 16
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 21
of of questionnaire questionnaire consist consist engagements engagements with and and -one -one one one -on a a
relevant relevant stakeholders, Stakeholders Stakeholders where where given given 10 10 necessary. necessary. were
to to review the questionnaire clarification business business days and and send any any
the the Authority. Authority. to to to questions questions indicated indicated deadline deadline July July This This 22 be be was was
it it that that Authority Authority stakeholder stakeholder to to would would respond noted noted 2016. 2016. The all all
of of the the form questions questions Frequently Frequently publish publish and and Asked Asked in in responses responses a a
Authority's Authority's document document the the website. Questions Questions ") The The "FAQs "FAQs ( ( on on
for for to to the questionnaire submission submission deadline 12 12 responses responses was was
August August 2016.
2.2.3.2 2.2.3.2 the the information the information gathering gathered gathered during Second, Second,
that that Document Document would would would would develop Discussion Discussion be be used to to stage stage a a
for for of of of the published published section public in in be be terms terms Act Act 4B 4B ICASA
for for that that it of of Authority might might period period noted 45 45 days. The comment comment a a
public public hearings. hold hold also also
2.2.3.3 2.2.3.3 Third, Third, following consultation the Document, Document, the public public Discussion Discussion on on
Authority Authority would would publish Findings Findings Document. Document. a a
2.2.3.4 2.2.3.4 the the the the the Fourth, Fourth, depending Findings Findings of of outcome outcome Document, Document, on on
Authority Authority 67(4) 67(4) of of regulations regulations of of the publish publish terms terms section section in in may may
ECA. ECA.
for for 2.2.4 2.2.4 with with the the 'Guideline outlined outlined This This approach accords in in process process
(the (the ") ") the the "Guideline "Guideline Conducting Conducting Market Reviews' published by by
Authority Authority the the published published The The Guideline March March context context 2010. 2010. 8 8 in in on on was was
Authority's Authority's of of of the the the the amendment under under prior prior to to section section 67 67 powers powers
this this of the the Amendment Amendment Electronic Electronic by by Communications Communications Act Act section section 1 1
which which Authority's Authority's In In the into into effect view, the 2014, 2014, 2014. in in came came
Authority's Authority's materially materially the the change change did did amendments amendments not to to section 67
the the terms terms of to to followed followed section section and, and, such, such, 67 67 be be in in power power or process process as as
to to the the the the the amendments still still guide guide Guideline Guideline be be used can can process process as as
Authority's Authority's the the change change have have 67 67 in in to to to to not not necessitated section section 2014 a a
approach. approach. The The that that Authority Authority the the only only guide guide Guideline Guideline notes notes and and is is is a a
Authority, Authority, not not but the Authority to to follow the the binding binding decided decided has has on on
that that it it the this this communicated communicated approach, approach, has has been is is to to process process as as
of of clarity clarity the the stakeholders. stakeholders. provide provide Guideline Guideline The The is is to to to purpose purpose 17 17
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22 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
the the market reviewsi, stakeholders stakeholders conduct conduct regarding regarding and and licensees of of
the the the of relevant relevant the the including including consultation public public process, process, powers powers
Authority Authority gathering gathering information, the the when when and and of of information, types types
Authority. Authority. requested requested the which which by by be be may may
Authority Authority 2.2.5 2.2.5 of of the the will will the the Guideline, Guideline, licensees licensees of of the terms terms inform inform In In
Authority's Authority's intention conduct conduct market, market, inquiry inquiry to to into specific specific and and an an a a
for for information information release release licensees. licensees. the the to to request request In this regard, regard, a a
that that the the Authority Guideline Guideline notes and and questionnaires questionnaires may may -on- -on- one one use use
gather gather market meetings meetings with licensees licensees information information to to make make and and one one up- up-
Authority Authority -date -date evidence evidence -based will then release to to decisions. The a a
market market definition, discussion discussion of of competition, competition, effectiveness effectiveness paper paper on on
of of significant significant market declaration declaration relevant relevant conduct conduct remedies, remedies, and and power power
the the public public hearings discussion discussion release
findings findings document paper, paper, on on a a
draft draft with with regulations accompanied accompanied 67(4) 67(4) of under under the section section ECA, ECA,
draft draft conduct conduct public hearings the the the the then then regulations, regulations, release release and and on on
for for implementation implementation final final regulations (if (if required). required).
this this 2.2.6 2.2.6 2016, 2016, with
July July and and line line in in On On 13 questionnaire questionnaire duly duly process, process, was was a a
Authority's Authority's the the website website published published "Questionnaire "Questionnaire "). The The ( ( on on
information information Questionnaire Questionnaire solicited from from subscription, free -to -air, and and
community community television television broadcasters, broadcasters, from from demand, demand, video video well well -on- -on- as as as
-the -the and and for for -top -top streaming streaming providers. providers. guideline ") ") "OTT "OTT A A ( ( over over
completing completing the Authority Authority the the Questionnaire Questionnaire published published its also also by was was on on
website website July July Questionnaire Questionnaire divided divided into various 2016. 2016. The The 13 13 was was on on
targeted targeted different at at rights stakeholders stakeholders sections sections such such content content as as
holders, holders, operators, operators, subscription television broadcasters, free
channel channel - -
television television broadcasters, broadcasters, -air -air to to broadcasting broadcasting associations and and OTT OTT
of of for for providers, providers, purely responding. responding. However, stakeholders service service ease ease
their their other other within within to to falling falling to to advised advised respond respond matter matter not not were were any any
relevant relevant "group submit subject regarding regarding the to to and and ", ", comments comments any any
of of the matter. matter. Similarly, interested within falling falling parties parties not not any any
identified identified respond respond the also also able to to to Questionnaire. groups groups were were F+ OQ
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 23
Authority Authority 2.2.7 2.2.7 the 2016, 2016, published published July July media media 25 25 On On that that noting noting release release a a
for for the the the submission submission deadline Questionnaire Questionnaire queries queries July July 27 27 on on was was
the the indicated indicated 2016 2016 2016 2016 (and July July 22 22 not not Notice). Notice). in in as as
of of 2.2.8 2.2.8 number clarification stakeholders stakeholders raised raised A A questions questions which which were were
Authority Authority submitted submitted the This This July July by by to to clarification 2016. 2016. included 27 27
from from (Pty) (Pty) submissions submissions Vodacom Vodacom "), "), Limited Limited "Vodacom "Vodacom Siyaya Siyaya ( ( to to Free Free
("Siyaya") ("Siyaya") submitted submitted Air Air Proprietary Proprietary Limited (which (which 22 22 responses responses on on
July July July and and 2016), 2016), (Pty) (Pty) 2016 2016 MultiChoice South Africa 27 27 Ltd Ltd on on
"), "), "MultiChoice "MultiChoice
and and ( ( "e.tv "e.tv e.tv e.tv Proprietary Proprietary "). "). Limited Limited ( (
. .
September September 2.2.9 2.2.9 to to clarification clarification 2016, 2016, these and and in On On 7 7 response response
Authority Authority submissions, submissions, the duly duly published notice, notice, which which also also erratum erratum an an
the the clarified clarified for for the the Government the the inquiry, (the (the Gazette Gazette in in process process
"Erratum "Erratum "). "). The The of of the the the the Erratum Erratum Notice Notice Notice Notice amend to to purpose purpose was was
the the of of of of content content light light various various clarification submissions submissions Notice Notice (in
submitted submitted stakeholders) by by clarify clarify the adopted adopted by by and and be be to to to process process
the the Authority Authority conducting conducting the inquiry into subscription television in in
broadcasting broadcasting
of of the the terms terms In In Erratum Erratum services. services. Notice Notice - -
2.2.9.1 2.2.9.1 the the Paragraph Paragraph of of substituted substituted clarify clarify Notice Notice 1.3 1.3 and to to was was so so as as
of of the the expand expand follows: follows: the the inquiry, on on purpose purpose as as
Authority Authority 2.2.9.2 2.2.9.2 "The "The has has that that responsibility responsibility to the the all all ensure ensure
and and communications communications markets broadcasting broadcasting service are are open,
of of inquiry inquiry competitive competitive this this sustainable. sustainable. and and The The to to is is purpose purpose
the the establish establish
that that factors factors contributed subscription subscription have have to to new new
broadcasting broadcasting service successfully successfully launch launch licensees licensees being able to to not not
their their /or /or of of fair fair number number subscribers. subscribers. services services and and attract attract a a new new
It It 2.2.9.3 2.2.9.3 important for the Authority the the understand understand challenges challenges faced faced is is to to
by by it it that that regulatory regulatory the the these these address address licensees licensees impediments, impediments, so so can can
for for the the introduction create create enabling enabling and and environment environment of of an an
if if any." any." competition, competition,
2.2.9.4 2.2.9.4 reference reference The The of of the the to to of Act Act paragraph paragraph 1.4.1 section section ICASA ICASA 4C 4C in
the the deleted. deleted. Notice Notice was was
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24 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
for for 2.2.9.5 2.2.9.5 the the submission submission deadline The The Questionnaire Questionnaire to to responses responses was was
September September effectively effectively extended extended (which (which for for to to 2016 2016 allowed 15 15 a a
for for of of submit submit interested interested least least period period 45 45 days to to at at persons persons responses
of of of from from the the the the the publication date date to to Questionnaire Notice).
that that Authority Authority for 2.2.9.6 2.2.9.6 the the the noted noted The The Inquiry Inquiry out out set set process process as as was was
"not "not of of indicated indicated 4C(1) 4C(1) the process" process" (as (as had been section section Act Act ICASA ICASA a a
further further that the the the Notice), Notice), in in outlined outlined noting noting section section in in process process
of of the the refers 4C(1) 4C(1) to to determined determined the Act Act to to ICASA ICASA by be be process process a a
officer officer presiding presiding scheduled scheduled for for inquiry inquiry at at specific specific date. an an a a
Authority Authority the the September September also also the the 2.2.10 2.2.10 amendment amendment to 2016, 2016, issued issued On On 7 7 an an
clarifying clarifying (by (by of of the the Questionnaire Questionnaire question of of 2.2 2.2 Section E E
Questionnaire), Questionnaire), published published informed informed the the document final final which which and and FAQs FAQs
the the website. website. of of overview overview the follows follows Erratum Erratum its Notice, Notice, An An FAQs FAQs is on on as as
raised raised of of 2.2.10.1 2.2.10.1 consultation consultation regarding regarding the In In to period period response response concerns concerns
that that for for Authority it it the the Questionnaire, the the final noted noted in in FAQs FAQs
for for shorter shorter stakeholders stakeholders the period period given given had had to to responses responses a a
of of form form Questionnaire Questionnaire the Questionnaire the intended intended to to part was was as as
gathering gathering
data data the the of development development preceding preceding Discussion Discussion process process a a
Document Document (although stakeholders effect, afforded day day 45 45 in in were, were, a a
within within period period time time the Questionnaire). Questionnaire). to to to respond respond The which which
that that Authority Authority to to formal formal Document the the noted noted Discussion Discussion responses responses
would would be be with with the "legislated timeframes accordance accordance ". ". in in
2.2.10.2 2.2.10.2 Authority Authority regarding regarding the having having In In to yet yet not not response response concerns
that that Authority Authority market market formulated formulated market market definition, the the the noted noted a a
definition definition follow the gathering gathering would would analysis data data and and process process
determine determine markets the the information collected collected would which which (as (as process process
relevant), relevant), finally determined market market only only and and and segments segments are are
through through the the Document. Document. Findings Findings
of of 2.2.10.3 2.2.10.3 regarding regarding the In In inclusion inclusion to to queries queries service service OTT OTT response response
Authority Authority of of the the providers providers the the the that that Questionnaire, Questionnaire, noted noted in in scope scope
for for the the "determine the the rationale rationale including including providers providers to to service service OTT OTT is is
20 20 ICASA ICASA
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 25
of of of industry's industry's the the these these their their limited limited impact impact view view services despite
capability capability ". ".
2.2.10.4 2.2.10.4 whether whether the to to In In to the the Questionnaire Questionnaire queries queries would would be be response response as as
only only substantial data data information information gathering part of the the proposed proposed and and
whether whether further questionnaires questionnaires the would would issued, issued, be be process, process, or or
Authority Authority that that of of the the the Questionnaire marks marks the inception noted noted
Authority's Authority's information gathering gathering other other with with methods methods exercise, exercise,
including including industry industry research. research. meetings meetings and and -on -on -one one one
the the 2.2.11 2.2.11 doubt, avoidance avoidance that that Authority Authority of of 'pay 'pay the the the the notes notes For For -tv -tv term term
market' market' the used used Questionnaire Questionnaire its its broad general in in in in to to sense, sense, was was
refer refer to to subscription television services, services, and and in in not not its its narrow narrow
policy policy 'relevant 'relevant competition competition product the the which which in in term term sense, sense, case case
market' market' Authority the the would would would would like have have such, been been used. As As to to
that that clarify clarify the the -tv -tv market' of of term term 'pay the the Questionnaire the the in in use use
not not to to relevant product market. construed construed should should defined be be mean mean a a
of of starting the relevant market market market to to define The The and and process process
Authority's Authority's preliminary stakeholders' stakeholders' the the segment, segment, to to seek and and views views on on
of of relevant of market market market market definitions, definitions, analysis analysis and and is is segment segment one one
the the of other other things. this this Document, Document, main main Discussion purposes purposes among
2.2.12 2.2.12 the the following following stakeholders submitted Questionnaire Questionnaire The The by by to to responses responses
the the date: date: closing closing
Corporation Corporation Limited Limited The The South African Broadcasting SOC SOC
(SABC) (SABC)
e.tv e.tv
Siyaya Siyaya TV TV
Multichoice Multichoice
Telkom Telkom Limited Limited "Telkom "Telkom ") SA SA SOC ( (
of of Broadcasters Broadcasters The The National Association Association "NAB "NAB ") ( (
The The South ") ") Communications Communications African African Forum Forum "SACF "SACF ( (
After After 2.2.13 2.2.13 analysing analysing Authority Authority the the to to the questionnaire the responses responses
order order identified identified to with with stakeholders stakeholders meetings meetings need need in in set set to some some up up a a
further further clarity clarity information. of of invitation then then obtain obtain Letters and and were were 21 21
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26 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
facilitate facilitate of of to to the the the relevant stakeholders with list list questions questions sent sent to to a a
information information through meetings. meetings. received these meetings The The -one -one -on -on one one
to to supplement supplement the the questionnaire and and used used to to responses responses was was
framing framing this consequently consequently document. assist assist discussion discussion in in to to
2.2.14 2.2.14 with with the e.tv. e.tv. Telkom Telkom meetings meetings conducted and and One One SABC, SABC, -on -on -one were
Authority Authority of of the stakeholders' stakeholders' 2.2.15 2.2.15 duly duly considered to The The each each responses responses
the the information the voluntary obtained obtained during the the Questionnaire,
one one - -
Authority's Authority's with with stakeholders, stakeholders, the meetings meetings certain held held and and -one -one on on
market market preliminary preliminary developing developing desktop desktop research, views views its its and and in in own own
out out this this analysis, analysis, set Document. Discussion Discussion and and in in as as
the the Authority's preliminary The The 2.2.16 2.2.16 out out Document Document Discussion Discussion sets sets
understanding, understanding, of subscription subscription television views views analysis analysis and and
of of the the broadcasting broadcasting Africa, including South South in in respect respect services services in in
of of definitions definitions market the markets markets of effectiveness effectiveness and and segments, segments,
determination determination of markets, markets, with licensees licensees the the relevant competition competition in in a a
significant significant market appropriate appropriate competitive possible possible and and pro- pro- power, power,
It It that that conditions conditions explanatory imposed. imposed. provides licence licence also also be be may may an an
of of the the relevant contextual contextual respect respect discussion discussion issues issues and and in in to to
subscription subscription television South South Africa. broadcasting broadcasting services in in
stakeholders' stakeholders' this initial The The seeks seeks 2.2.17 2.2.17 Document Document views views Discussion Discussion on on
for for the the the implications operation operation of subscription analysis, analysis, and and on on
that that television television broadcasting the The The services services South Africa. in in responses responses
Authority Authority Authority Authority the the stakeholders stakeholders will enable enable make make from from to receives receives
other other things, things, the relevant market findings findings to, to, amongst amongst various various relating
there there market market effective effective whether whether competition competition segment segment definitions, and and is is
relevant relevant market whether those those licensees licensees markets markets segments, segments, and and in in any any
market market significant significant market those those markets segments have have and and in in power power
whether whether there there
and and appropriate appropriate ineffective ineffective competition, where where is is pro pro - -
competitive competitive conditions conditions those those should should imposed licence licence licensees be be on on
failure. failure. if if significant significant market the market to to remedy remedy having having
any, any, power, power,
. .
Authority's Authority's findings findings will Document. Document. The The Findings Findings in in be be out out set set a a
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 27
8T'Z'Z 8T'Z'Z ayl ayl ameuuopsanb ameuuopsanb pasod pasod Aew Aew suolasanb suolasanb ul ul alp alp awos awos aseald aseald a4ou a4ou 4e14 4e14 go go
e e slyi slyi 4uaJamp 4uaJamp 'guawnaoa 'guawnaoa panse panse uolssnasla uolssnasla ul ul ul ul pa4eada.i aq aq pa4eada.i A144611s A144611s JO JO
.iagwnu .iagwnu pasea.ioul pasea.ioul ue anlaaa.i anlaaa.i ue .iauuew .iauuew sadoq sadoq Awoypny Awoypny go go o4 o4 DLL!. DLL!.
6ulssasse 6ulssasse Apadwd Apadwd islsse islsse quawnaoa quawnaoa atp atp ul ul sasuodsai sasuodsai uolssnosla uolssnosla 1! 1! 01 01 01 01
atll atll anssl anssl auenala.i auenala.i
6T'Z'Z 6T'Z'Z leur leur ayl ayl suolsnlauoa suolsnlauoa payaea.i payaea.i iait iait Aipoyiny Aipoyiny uo uo Aue Aue at{4 at{4 iou iou sey sey snnaln snnaln JO JO
anlpai}a anlpai}a a.tatp a.tatp 's4uaw6as 's4uaw6as aaypaynn aaypaynn sl sl sianaew sianaew 4anpew 4anpew uomulgap uomulgap Aue Aue go go .ao .ao
's4uaw6as 's4uaw6as aasuaall aasuaall 4aniew 4aniew Jatpatlnn Jatpatlnn Aue Aue uonqadwoo uonqadwoo s4anlew s4anlew asoyp asoyp ul ul JO JO
's4uaw6as 's4uaw6as 4a3{iew 4a3{iew pue pue asoyp asoyp lueol;lu6ls lueol;lu6ls s4anpew s4anpew aney aney u! u! 4an.iew 4an.iew _tamed _tamed
wogs wogs suoppuoa suoppuoa pasodwl pasodwl uo uo ag ag Aue aauaall aauaall anpnadwoo-oad anpnadwoo-oad aatliaynn aatliaynn JO JO
IIIM IIIM atll atll atll atll atg atg sasuodsai sasuodsai uoiissnosra uoiissnosra asn asn Allaotnn`d Allaotnn`d aasuaoll aasuaoll 01 01
a1ato a1ato oi oi algealldde algealldde sanssl sanssl pue pue aplaap JaLpaynn JaLpaynn ay} ay} Ìuawnaoa Ìuawnaoa Japisuoo Japisuoo 04 04
aip aip 'uolpe 'uolpe anIonul anIonul 6ul>lew 6ul>lew Aew Aew am am yalynn yalynn sanssl sanssl go go 6ulainba.i 6ulainba.i aayp.n4 aayp.n4
suoneln6aJ suoneln6aJ
confidentiality confidentiality for for of of the provided provided requests requests Notice Notice Paragraph Paragraph 1.5 in in
of of the the stakeholders' to to the submissions submissions in in respect respect response response
terms terms of of the the Questionnaire, Questionnaire, section section Act. Act. 4D 4D ICASA in in
Authority Authority four for for confidentiality from from received received requests The The
of of stakeholders, stakeholders, namely Multichoice, e.tv, respect respect Siyaya, Siyaya, and and SACF SACF in
their their information information to to the certain certain contained respective in in responses responses
that, that, of of the Questionnaire. Questionnaire. In this regard, section section 4D Act provides ICASA ICASA
that that Authority, Authority, information information submits submits the when when to to may may person person person a a
that that information information information. treated treated the the confidential request request The The be be as as
for for written written confidentiality confidentiality accompanied accompanied should should by by be be request request a a
information information treated treated explaining explaining why the specific specific should be be statement statement as as
Authority Authority determination determination then then confidential. confidential. required required make make The The is is to to as as a a
of of whether whether confidentiality confidentiality within granted granted will will days days 14 14 be be to to not not or or
the the information the the provide provide concerned concerned and and to to receiving receiving reasons reasons person person
that that Authority Authority determination. determination. determines determines relation relation the Where Where to to its its in in a a
This gazette is also available free online at www.gpwonline.co.za
28 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
for for confidentiality confidentiality request request cannot the who who acceded acceded be be to, to, person person
submitted submitted the information be be opportunity opportunity withdraw withdraw must must given given to to it. it. an an
Authority Authority considered considered The The that that for for confidentiality confidentiality requests requests made made all all were were
of of with with the the the submission submission the the with with Questionnaire Questionnaire line line in in to to responses responses
requirements requirements these these notified notified stakeholder who who made made and and had such such each each
of of its its decision. Where information information request request confidential used used such such a a was was
Authority, Authority, formulate formulate of initial initial to to view view the the relevant relevant the the data data an an was was
from from the excluded excluded Discussion Discussion insight insight from from Document, Document, but the gained gained its its
expressed. expressed. analysis analysis has has been
jurisdiction jurisdiction Concurrent Concurrent 2.4 2.4
Authority Authority 2.4.1 2.4.1 The The for for the the regulation responsible responsible is is of of the the electronic electronic
communications, communications, broadcasting broadcasting postal postal and and sectors sectors South service service Africa in in
the the public public Authority's Authority's interest. interest. includes includes The The role in in of of the the issuing issuing
licences, licences, with with the monitoring monitoring conditions, conditions, compliance compliance licence licence developing developing
implementing implementing nd nd within within regulations, regulations, undertaking matters matters enquiries enquiries a a on on
jurisdiction, jurisdiction, is is investigating investigating complaints complaints the the and and in in sector sector i i managing
frequency frequency radio radio other other things. spectrum, spectrum, among among
The The (the (the Competition Competition regulates regulates "Commission "Commission Commission Commission ") competition competition
the the African African general general South South and and in in in in for for responsible responsible is is economy economy
investigating, investigating, controlling evaluating evaluating and and restrict restrict of of practices, practices, ive ive abuses
dominant dominant position, exemptions and and mergers. mergers.
of of the the overlap overlap responsibilities between between Areas Areas in Authority Authority the the and and
through through the the specific specific Commission Commission managed managed Competition Competition sections sections in in are are
of of "), "), "Competition "Competition Act Act 1998 89 89 ( ( the the the the Act Act ICASA ICASA Act. The and and ECA ECA
Commission Commission signed signed and and ICASA also of of memorandum memorandum agreement, agreement, a a
September September effective effective from 16 16 their their of of respective respective 2002, 2002, defining areas areas
jurisdiction jurisdiction regulating regulating interaction and and of of them them "Memorandum "Memorandum between between ( (
"). "). the the Agreement Agreement example, example, Memorandum Memorandum of of Agreement Agreement provides provides For For
that that with with the the will will Commission Commission deal deal acquisitions acquisitions well well and and mergers mergers as as as as
restrictive restrictive complaints complaints concerning of of the the dominance, dominance, practices practices abuse abuse and and
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 29
of of will will with contraventions while while electronic communications ICASA ICASA deal deal
conditions conditions services services legislation. broadcasting broadcasting services licence licence and and and and
2.4.4 2.4.4 competition competition regulated regulated under Chapter above, above, discussed discussed As As matters matters are are
Authority Authority of of the 67(4) of the the the In In of section section 10 10 ECA. ECA. terms terms must, must, ECA, ECA,
inquiry, inquiry, the relevant markets following following prescribe prescribe regulations defining an an
market market sufficient
and and and and and appropriate appropriate segments segments impose impose pro pro - -
competitive competitive there where where conditions conditions licence licence licensees ineffective ineffective is is on on
if if significant significant market competition, competition, licensee licensee such such and and has has in in any any power power
markets markets market regulations regulations The The other other must, must, segments. segments. or or among among
things, things, relevant relevant market (1) (1) define retail markets wholesale wholesale and and or or
(2) (2) whether whether there determine determine effective segments, segments, competition competition those those in in is is
relevant relevant markets market and and if if (3) (3) determine determine segments, segments, which, any, any,
significant significant market have have licensees licensees market market markets markets those those and and in in power power
there there ineffective ineffective where where (4) (4) segments segments appropriate competition, competition, impose impose is is
competitive competitive those those conditions conditions licence licence significant significant having having licensees licensees pro- pro- on on
the the market market market remedy remedy to to failure, (5) out out set set schedule schedule in in power power a a
Authority Authority of of the the which which will will terms terms undertake undertake of the periodic periodic review
market market markets markets and and for for (6) (6) monitoring monitoring segments; segments; provide provide and and and and
market market of of behavior the the relevant and and investigation investigation anti -competitive in in
market market segments. segments.
that, that, 67(9) 67(9) the the subject subject of of the provides provides 2.4.5 2.4.5 to to provisions provisions of the Section Section ECA ECA
the the matters matters to to competition the the Competition Competition Act applies applies in in ECA, ECA,
electronic electronic 67(11) 67(11) of communications communications industry. Further, the section section ECA ECA
that that Authority Authority the the provides provides for for from from the the receive receive ask ask and and may may
relevant relevant Competition Competition Commission, Commission, assistance proceedings advice advice or or on on
the the Authority, of of (Similarly, under under including including proceedings Chapter 10. 10. in in
terms terms of the 67(12) 67(12) of the the Competition Commission Commission section section ECA, ECA, may may
for for Authority, relevant relevant from from the receive receive ask ask advice and and assistance assistance or or on on
of of the the Competition Competition Commission.) proceedings proceedings
further further of of clarity clarity the the 2.4.6 2.4.6 provides provides Section Section 4B 4B ICASA concurrent concurrent Act Act on on
that that jurisdiction jurisdiction providing providing by by - -
of of of "(8) "(8) performance performance and duties Before Before the and its its exercise exercise any any powers powers
of of Authority Authority the the this this section, section, in in - - must must terms terms 25 25
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30 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
of of jurisdiction jurisdiction (a) (a) whether whether consider consider terms terms concurrent concurrent not, not, in in or or any any
Authority Authority other authority and and concluded concluded between the agreement agreement or or any any
it it refer refer authority authority institution, institution, would would such such be be inquiry inquiry appropriate appropriate to to to to an an
institution; institution; or or or
of of (b) (b) subject Electronic Electronic 67 67 and and the the the Act Act to to Communications Communications section section
of of and and conditions jurisdiction jurisdiction terms terms agreement concurrent concurrent any any
Authority Authority and and the concluded concluded between the Competition Competition Commission, Commission,
that that mind mind bear bear the the Competition in in Commission Commission primary primary authority has has to to
detect detect and and of of current current prohibited investigate investigate past alleged alleged commissions commissions or or
industry industry within within practices practices within and and sector sector to to review or or any any mergers mergers any
of of industry industry Competition Competition the the in in sector sector terms terms Act. Act. or or
(9) (9) Subject Subject and and conditions the the of of jurisdiction jurisdiction concurrent concurrent terms terms the the to to
otherwise otherwise agreed unless unless Authority Authority other agreement agreement and and to to by the the the or or
authority authority not not institution institution Authority Authority question, question, the take in in or or may may any any
action action already already where where has of of matter matter brought brought attention attention the the and been been to to a a
that that other dealt dealt by by with with being being is is institution." institution." authority authority or or
Authority Authority 2.4.7 2.4.7 the considered considered above above The The and and has has the the sections sections of of is is aware aware on- on-
investigation investigation the the going going by by of of of of into into allegations allegations Commission Commission abuse abuse
the the subscription subscription dominance dominance television television broadcasting broadcasting sector. The The in in
that that
Authority Authority the the distinct distinct this this inquiry from notes notes is is process process a a
investigation investigation into into undertaken the specific specific conduct being Commission. by by
this this inquiry Moreover, Moreover, allege does does market market not not doing doing by by wrong wrong any any any any
but but
participant participant with at at dealing dealing aimed aimed assessing assessing and and is is process, process, a a
impediments impediments if if fair fair to to competition, the relevant effective effective and and in in any, any,
markets markets Authority Authority consult consult with the will will The The basis. basis. ante ante ex ex on on an an
of of this inquiry during during the Commission Commission when when and and in in necessary necessary course as as
of of spirit spirit of of the the the the the Memorandum Memorandum between Agreement Agreement two
institutions. institutions.
Agreement2 Agreement2 of of Authority Authority 2.4.8 2.4.8 with with the Memorandum Memorandum The The signed also also a a
the the of coordinate coordinate National National Consumer Commission exercise exercise (NCC) (NCC) to to
jurisdiction jurisdiction the the electronic protection protection in in matters matters consumer consumer on on
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 31
communications communications broadcasting broadcasting will will and and also also Authority Authority sectors. sectors. The The
the the with with the consult consult and and when of of during during the NCC NCC course course as as necessary necessary
inquiry. inquiry.
INQUIRY INQUIRY AND AND 3. 3. THE THE PURPOSE PURPOSE THE SCOPE SCOPE OF
Overview Overview 3.1 3.1
the the Authority previously, previously, stated stated As As inquiry inquiry 3.1.1 3.1.1 conducting into into is is an an
television television subscription subscription broadcasting broadcasting it it to to services services because because has has reason reason
that that there there result result features features believe believe that that of of this this sector in in are are may may
ineffective ineffective The The further further that that Authority Authority competition. competition. conducting conducting believes believes
this this will understanding inquiry inquiry it it promote promote competition assist assist how how in in may may
the the of of context context subscription subscription television broadcasting services, services, in in in in
of of furtherance furtherance the the the of of ECA. ECA. purposes purposes
Authority Authority 3.1.2 3.1.2 In with with the out Erratum Erratum Notice) the the the set set Notice Notice (as read a a
preliminary preliminary outline the the of of of of the the inquiry into subscription purpose purpose
for for Authority's Authority's of of the television television broadcasting the services services purposes purposes
initial initial information -gathering follows: follows: stage, stage, as as
that that Authority Authority "1.2 "1.2 noted noted The The has has five five (5) despite despite having licences licences issued issued
further further (2) (2) and and two two the the subscription 2007 2007 2015 2015 licences licences in in in in in a a
television television market, market, three (3) broadcasting broadcasting services services licensees licensees have
commenced commenced that that Authority Authority of (1) (1) operations. operations. noted noted The The has has also one one
sustainability sustainability the the others these these challenges challenges while licensees licensees faced have not not
launched launched yet yet services. services.
that that Authority Authority the the responsibility The The has has 1.3 1.3 all all to to ensure ensure
communications communications markets broadcasting broadcasting and and service service are are open,
of of competitive competitive this inquiry sustainable. sustainable. establish The The and and to to is is purpose purpose
that that contributed contributed subscription subscription the the factors broadcasting have have to to new new
their their successfully successfully service service licensees launch launch being being able able to to not not services services
/or /or fair fair number number of subscribers. subscribers. and and attract attract new new a a
for for the the It It important important Authority Authority to to understand the challenges challenges 1.4 1.4 is is
these these faced faced licensees licensees by by that that it it the the regulatory address address can can so so
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32 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
impediments, impediments, enabling enabling and and for for environment environment the the introduction create create an an
if if any." any." of of competition,
that, that, Authority Authority of of terms terms of 4B(2) 4B(2) the 3.1.3 3.1.3 section section notes notes The The ICASA ICASA in in Act, Act, a a
of of the the Authority's intention to inquiry inquiry indicate indicate conduct conduct notice notice must must an an
of of the the of of inquiry. inquiry. 4B(2) the the the Act section section While While does ICASA ICASA purpose purpose
Authority Authority not not the detail required regarding regarding the the specify specify given given to to by by be be
the the that that Authority Authority sufficient sufficient inquiry, inquiry, the the the appreciates appreciates of of purpose purpose
information information must interested interested provided provided stakeholders enable enable be be to to as as so so
meaningfully meaningfully contribute contribute to particular, particular, to to the and, and, in in to to process process assess assess
that that Authority. Authority. what what information the the required required provide to to to are are
3.1.4 3.1.4 the the information Following Following preliminary preliminary from from gathering exercise exercise and and
the the that that Authority Authority undertaken, undertaken, this Document Document analysis analysis Discussion Discussion has has in in
further further the the has has Authority Authority of of of set set out the inquiry, the the details details scope scope
of of the inquiry, the the the expanded expanded revised and and out out set set purpose purpose on on
for for timelines timelines the the inquiry. expected expected
inquiry inquiry of of the the 3.2 3.2 and Scope Scope purpose purpose
the the inquiry inquiry 3.2.1 3.2.1 examine subscription television will will This This broadcasting broadcasting sector,
number number of interrelated markets. markets. which which In In this Discussion Discussion encompasses encompasses a a
"subscription "subscription television broadcasting broadcasting services" services" refers to Document, Document, a a
subscriber subscriber
broadcasting broadcasting provided
of of the the payment to to service service upon upon a a a
Subscription Subscription fee fee defined (as (as ECA). ECA). of of the television television section section in in 1 1
broadcasting broadcasting distinguishable from other other commercial commercial services services are are
television television -air -air television television broadcasting broadcasting free free services, services, such such -to -to as as
from from broadcasting broadcasting and and television television broadcasting public public services services services, services,
broadcasting broadcasting and and community community television services. services.
the the interrelated 3.2.2 3.2.2 the the that that of of to to various various markets comprise comprise aspects aspects Due Due
of of the the subscription subscription broadcasting value value television television services, services, chain chain
competition competition market market affect affect competition another market. will will in in in in one one
implies implies that that of of competition competition the the nature dynamics dynamics associated associated This This and and and
matters matters properly properly evaluating evaluating the dynamics only only understood by by be be can can
within within that that the the relationship relationship the various markets between between comprise and and 28 28
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 33
of of subscription subscription television value value chain broadcasting broadcasting South South services services in in
achievement achievement Africa. Africa. The The of of inquiry's objectives objectives thus requires the the the
of of consideration consideration
of of of of markets within the value value chain chain range range a a
subscription subscription television the the broadcasting broadcasting services, services, including upstream upstream at at
the the the the level, level, wholesale level, downstream downstream the technical level, level, and and
level. level. Authority's Authority's preliminary of identification identification these these services services The The
the the markets, markets, and and "market", "market", term term this this Document Document of of the Discussion Discussion in in use use
preliminary preliminary viewed viewed
be be that that must must the the analysis analysis will will refined during be be as as a a
of of the the information information inquiry inquiry available. available. becomes becomes course course more more as as
The The for for the 3.2.3 3.2.3 rationale rationale inquiry subscription subscription television broadcasting broadcasting into into
has has been that that Authority Authority out out previously, previously, namely services services set the the the by by
that that Authority Authority five five subscription despite despite having noted noted has has issued
television television further further broadcasting broadcasting 2007 2007 services services licences licences and and in in two two a a
subscription subscription television television broadcasting broadcasting licences licences only only services services 2015, 2015, in in
three three subscription subscription television broadcasting broadcasting services services licensees have have
that that Authority Authority commenced commenced operations. noted noted The The also also has has of of two two these these
licensees licensees have sustainability sustainability the the others challenges challenges while have have faced faced not not
Authority Authority yet yet accordingly accordingly launched launched services. The The has has identified identified need need a a
for for
inquiry inquiry whether whether there competition competition the the into into in in are are any an an concerns concerns
subscription subscription television contributed contributed broadcasting broadcasting which which have sector sector to to
subscription subscription television broadcasting service service licensees licensees being not not new new
able able /or /or their their to to successfully launch launch and and attract attract fair fair number number services services a a
of of impact impact generally generally subscribers subscribers which competition competition in in or or more more new new on on
ability ability the the broadcasting the including including of of other to to sector, sector, broadcasters broadcasters
this this previously previously document, document, However, However, noted Authority Authority the the compete. compete. in in as as
whether whether there not not yet conclusions conclusions reached reached has has to to any any as as are are any
competition competition the the identified markets. in in concerns concerns
inquiry inquiry 3.2.4 3.2.4 into into The The television television subscription subscription broadcasting services will
the the evaluate evaluate challenges challenges and and that that contributed contributed factors factors have have to to may may new new
subscription subscription television broadcasting broadcasting service being being licensees licensees able able to to not not
successfully successfully launch /or /or their their attract attract to to subscribers, services services and and and new new
will will (if (if identify identify competitive any). any). Through this analysis, dynamics dynamics at play play
the the that that distort distort inquiry inquiry identify factors factors to to aims aims all all restrict restrict prevent, prevent, or or
effective effective
of of market failure, competition, competition, including including evidence evidence any any 29 29
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34 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
regulatory regulatory failure competition competition will will provide factual This This or or concerns. concerns. a a
Authority Authority the the make make evidence -based which which basis basis upon upon can can
that that regulatory regulatory impediments recommendations recommendations address address to to serve serve any any
of of subscription subscription and and promote promote competition television television respect respect in in
of of this this various various broadcasting broadcasting services sections sections South South Africa. The in in
of of Authority's overview overview initial Document Document the contain contain Discussion Discussion an an
of of observations observations subscription television broadcasting broadcasting in in respect respect services services
that that this this South South Africa. contained Please Please in in all statements statements note note in in
preliminary preliminary subject subject only only Discussion Discussion and and to to Document Document views views are are are are
inquiry. inquiry. during during the review review
for for Authority Authority the the responsible responsible below, below, discussed discussed As As in in ensuring ensuring section section 4 4 is is
fair fair competition competition broadcasting broadcasting and and in in for for promoting promoting competition services, services,
of of this this the the background, background, the sector. sector. Against the inquiry ICT ICT in in is is purpose purpose
(1) (1) establish the factors understand understand and and that that to to the the challenges have have
contributed contributed subscription subscription television broadcasting to to service service new new
successfully successfully licensees licensees being being able /or /or their their to to not not services services launch launch and and
attract attract fair fair of of (2) (2) regulatory number number the the subscribers; subscribers; new new assess assess a a
(if (if impediments impediments subscription subscription television any) any) broadcasting faced faced by by new new
(3) (3) the the licensees; licensees; of of of of the the context competition competition state state service service in in assess assess
subscription subscription television broadcasting; (4) (4) investigate investigate possible possible and and
interventions interventions the the subscription subscription television broadcasting in in context context of
67(4) 67(4) this this the the further further of of of of the the will will services. services. section For For ECA, ECA, purposes purposes
Authority Authority the the enable enable to: to:
particular particular Define Define market market markets markets segments segments conduct (and (and or or an an
of of interrelationship interrelationship market the the markets between between various analysis analysis or or
subscription subscription television segments segments broadcasting broadcasting services, including in in
relevant relevant interactions interactions contractual contractual relationships examining examining and and
participants participants within subscription television between between broadcasting
services); services);
whether whether there particular particular effective effective competition Determine Determine those in in is is
of of (taking (taking 67(4A) markets markets market the into section section ECA ECA segments segments or or consideration); consideration);
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 35
whether whether significant significant market licensees licensees have Assess Assess in in power power any any
particular particular markets 67(5) market market (taking those those section section segments segments or or
of of consideration); consideration); into into the the and and ECA ECA
whether whether develop develop position Consider Consider and and to to -competitive -competitive pro pro as as a a
conditions conditions those those should should imposed licensees licensees having licence licence be be on on
if if market market failure, significant significant market remedy remedy the to to power power any. any.
of of 67(4) 67(4) performing performing functions In In section its its in in to to terms terms examine examine
Authority Authority competition competition the the regard regard issues, issues, (have (have to to the must must also also
regulatory regulatory objectives of of the section section in in 2 2 context context In In the present present ECA. ECA.
regulatory regulatory objectives include: include: these these
competition competition within promoting promoting the the ICT ICT sector; sector;
of of the the of of variety variety quality electronic electronic provision provision ensure ensure a a
communications communications services services reasonable at at prices;
the the interests of of quality quality promote promote with the regard regard price, price, to to consumers consumers
variety variety of the the electronic and and communications communications services;
of of the the development commercial commercial public, public, and and community community promote promote
broadcasting broadcasting services which of of to to the the the responsive responsive needs needs are are
public; public;
that that broadcasting broadcasting collectively collectively promote services, services, viewed and and ensure ensure
provide provide public actuality actuality interest interest programming programming such such news, news, as as
of of interest, interest, political political public public issues issues and and programmes, programmes, programmes on on
of of international, international, matters matters national, national, regional regional and and local programmes programmes on on
significance; significance; for for of of specifically specifically services services and and broad and and cater cater range range a a
of of for for the the the the programming the youth children, children, needs needs and and women, women,
disabled. disabled.
Authority Authority delineated delineated The The has has it it of of the the inquiry the the best best current current scope scope as as
of of it it information information the the the this this the the available basis basis and and to to at stage, stage, can can on on
this this understood understood questions questions contained should should Discussion Discussion in in be Document Document
preliminary preliminary within within this the the The The in in statements statements context. context. Discussion Discussion
the the the the Document, Document, and and posed Document, Document, questions questions Discussion Discussion in in in in no no
that that imply imply will will reached; reached; conclusions conclusions have been been all all statements statements way way any 31 31
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36 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Overview Overview 4.1 4.1
Authority Authority this this the the the broader provides provides of of 4.1.1 4.1.1 In overview overview section, section, an an
television television broadcasting South South order order to contextualize sector sector Africa, Africa, in in in in
the the discussion discussion subscription subscription television broadcasting broadcasting services. This This on on
the the policy, legislative regulatory regulatory framework section section and and covers covers
the the television television sector governing governing broadcasting broadcasting services general, well well in in as as
subscription subscription of of television television broadcasting respect respect services. services. This in in is is as as
overview overview of the television broadcasting sector followed followed services services by by an an
of of dynamics dynamics the and and structure structure the the television broadcasting broadcasting services
sector. sector.
4.1.2 4.1.2 following: following: the the This This section addresses
legislative legislative and and Policy, Policy, regulatory regulatory framework overview;
overview; overview; Market Market and and
developments. developments. Future Future
regulatory regulatory framework overview legislative legislative 4.2 4.2 Policy, and and
of of the of 4.2.1 4.2.1 of of the Constitution South South Africa, Section Section Republic Republic 192 192 1996 1996
that that "National "National legislation independent provides provides establish establish must must an an
authority authority interest interest regulate regulate broadcasting broadcasting the broadcasting broadcasting public in in to to
diversity diversity of broadly broadly to to fairness and and and and representing representing views views ensure ensure a a
South South African society ". ".
Authority Authority (the (the "IBA "IBA Independent Independent the the Broadcasting Broadcasting ") ") ( ( 4.2.2 4.2.2 In 1995, 1995,
Authority's Authority's inquiry inquiry with -ranging -ranging predecessor) predecessor) conducted policy policy wide wide a a
regard regard of of of of to to the the regulatory the respect respect regime regime various various aspects aspects in in
32 32 (CASA (CASA
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 37
broadcasting broadcasting services services drafted drafted the the inquiry, the sector. sector. Following IBA IBA a a
that that document document colloquially policy policy has has the the Triple become become known as as
Inquiry Inquiry Triple Triple Report. Report. The Inquiry Inquiry other Report Report focused among among on, on,
viability viability things, things, (1) the role role and of of (2) the the public public broadcaster,
cross cross - -
prohibiting prohibiting media media rules of of ownership ownership broadcasting broadcasting public public and and cross cross
(3) (3) interests, interests, South South African and and for for content content television. television. rules rules radio and and
Triple Triple The The Inquiry Inquiry context context of the the the prepared prepared Act Report Report IBA IBA in in in in was was
of of broadcasting broadcasting which which terms terms at at regulated regulated services services South South Africa in in were were
the the time. time.
4.2.3 4.2.3 the the Triple Following Following Inquiry Inquiry the the Report, Report, Broadcasting Green Green Policy Policy
the the published published Paper Paper
first first for for of of part part consultative consultative the was was process process as as a a
formulation formulation for for of of framework framework broadcasting. broadcasting. policy policy a a
4.2.4 4.2.4 the the White White the the official In In adopted Broadcasting Broadcasting 1998, 1998, Paper Paper was was on on as as
that that government government broadcasting. broadcasting. stated policy policy White The The Paper Paper on on
should should allowed be be of of competition competition television private private radio radio and and all all in in areas areas
that that the the competition competition operations operations conditions conditions licensing licensing should and and promote promote
footing footing equal equal and and obstacles obstacles to entry. entry. remove remove on on an
4.2.5 4.2.5 Broadcasting Broadcasting The The object object of effect effect Act Act into 1999. 1999. The 30 30 June came came on on
the the Broadcasting Broadcasting out out develop Act, Act, establish set set section and and 2, 2, is is in in to to as as
broadcasting broadcasting the the interest interest order order policy policy public public South South Africa in in in in to, to, a a
other other things: among among
contribute contribute development development democracy, democracy, of of equality, equality, society, society, gender to to
building, building, of of strengthening strengthening the spiritual nation nation education provision provision and and
fibre fibre of moral moral and and society; society;
strengthen strengthen the cultural, political, safeguard, safeguard, enrich enrich social social and and and
fabric fabric economic economic South South Africa;
of of ownership ownership control broadcasting and and through through services services encourage encourage
participation participation historically historically from from disadvantaged by by persons persons groups; groups;
plurality plurality of views views and and information information provide provide wide wide and and ensure ensure news, news, a a
for for of of the the specifically specifically services services and and programming programming needs needs in in range range
of of children, children, youth youth the the respect respect the disabled; disabled; and and women, women,
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38 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
investment investment the the broadcasting broadcasting sector; in in encourage encourage
fair fair the the competition competition sector; broadcasting broadcasting and and in in ensure ensure
for for three three provide provide tier tier of of community community system system public, public, commercial and and a a
broadcasting broadcasting services. services.
4.2.6 4.2.6 Authority Authority April April 2004, the Document Document published published Discussion Discussion 23 23 On On on on a a
the the Subscription Inquiry Inquiry "Subscription "Subscription into into Broadcasting Broadcasting Broadcasting ( (
of of the the Subscription Document Document "). Services Services Discussion Discussion The purpose purpose
Broadcasting Broadcasting Document Document Services Services Discussion Discussion to to generate generate comment was was
of of for for introduction introduction regulatory framework stakeholders stakeholders from from the all all on on a a
Authority Authority invited invited subscription subscription broadcasting South South Africa. The The in in
the the interested interested parties, stakeholders the public public respond respond issues issues and and to to to
the the questions questions Subscription Broadcasting Broadcasting raised raised and and in in Services Services
Authority Authority Document Document subsequently Discussion Discussion by by The 2004. 2004. 14 14 June
Subscription Subscription published published its Broadcasting Position Position Paper Services Services on on
"Subscription "Subscription ") ") which which Broadcasting Broadcasting ( ( out out the set set Services Services Position Position Paper
of of regulatory regulatory framework subscription subscription policy policy broadcasting and and in in respect respect
Africa, Africa, 2005. 2005. South South June June in in 1 1 on on
4.2.7 4.2.7 In In the Subscription Subscription the the Broadcasting Broadcasting Authority Authority Services Services Position Position Paper, Paper,
that that of of the the ability subscription subscription broadcasting services noted noted acquire to to
of of fundamental fundamental the exclusive exclusive these these basis basis content content to to provision provision is is on on an an
services.4 services.4 further further that for Authority Authority subscription subscription broadcasting broadcasting The The noted noted
exclusivity exclusivity the the primary services, services, these services services will which which basis basis is is on on
that that of of attract attract forms forms retain retain subscribers subscribers exclusive and and and and some some
industry industry therefore, efficient efficient arrangements arrangements the the broadcasting both both in in are, are,
the the Authority this this background, stated stated desirable. desirable. and and Against Against the the in in
that that Subscription Subscription Broadcasting Broadcasting decided decided had had it it Services Services Position Position Paper
regulate regulate the exclusive exclusive of of (other (other to to programming acquisition acquisition not not than
/tiering, /tiering, national national sporting events) that that noting noting packaging packaging or or programme
that that of of competition competition dealt with general general arise arise issues issues by be be way way may may
law. law. competition competition
July July 4.2.8 4.2.8 the into into 2006, 2006, force. force. The The repealed repealed and and 19 19 On On ECA ECA ECA ECA came came
the the replaced replaced and and of of the the certain certain provisions Broadcasting Broadcasting IBA IBA Act Act. Act.
A A Broadcasting Broadcasting Services Services Subscription Subscription Paper. Position Position 72. 72. p p
34 34 1CASA 1CASA
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 39
of of of the the the the provisions Many Many of of Chapter Chapter enacted enacted IBA IBA Act in in 9 re- re- were were
primary primary object the the of of The The ECA. ECA. the the stated stated section section 2, 2, in in ECA, ECA, is is to to as as
for for of of the the regulation electronic provide provide communications communications South South Africa in in
for for that interest interest the the public public and and in in other other to, to, amongst amongst things, (1) purpose purpose
(2) (2) competition competition within the ICT ICT and and promote promote promote sector, sector, an an
of of fair fair environment environment and and -discriminatory -discriminatory to to open, open, non non access access
electronic electronic networks broadcasting broadcasting services, communication communication to to and and
electronic electronic communications services. services.
4.2.9 4.2.9 In similar the the for for to to three three the the provides provides Act, Act, IBA IBA broad broad ECA ECA manner manner a a
of of broadcasting broadcasting public, public, community. community. commercial commercial categories categories services: and and
of of the the the the commercial commercial For For broadcasting broadcasting defined defined "a "a ECA, ECA, is is purposes purposes as as
broadcasting broadcasting service
for for of of profit profit entity profit profit part part operating operating but or or as as a a
excludes excludes public broadcasting of of the the In In terms the the service service ". ". ECA, ECA, any any
broadcasting broadcasting operated the the services services South South African Broadcasting by by
Corporation Corporation Limited "SABC") "SABC") SOC SOC ( ( public public broadcasting services. A A are are
broadcasting broadcasting community community the the defined defined service service in in is is ECA ECA to to mean mean a a
(1) (1) broadcasting broadcasting which
-profit -profit entity entity fully fully controlled controlled service service by by is is non non a a
for for
carried carried
and and profit profit (2) (2) particular particular purposes, purposes, serves non non on on a a - -
(3) (3) the the members members community, community, it it of of community served served by by or or encourages encourages
with with associated associated of of community, community, promoting promoting the interests such such or or persons persons
the the selection selection of of to to participate provision provision and and in in be be to to programmes programmes
the the broadcast broadcast of of (4) (4) broadcasting broadcasting service, such such and in in be be may may course course
funded funded advertising advertising donations, donations, grants, sponsorships by by or or or
membership membership of of the the fees, fees, combination above. above. by by or or any any
Following Following 4.2.10 4.2.10 the of the the publication publication Subscription Subscription Broadcasting Broadcasting Services
to to prior prior Authority the the of the the the the Position Position Paper and ECA, ECA, commencement commencement
of of satellite satellite commercial commercial licensing licensing commenced commenced and and in in respect respect process process a a
this this subscription subscription broadcasting Following Following licensing cable cable services. services.
Authority Authority the the provide provide subscription issued issued licences to to process, process,
the the following broadcasting broadcasting November services, services, in in 2007, 2007, to five
(Pty) (Pty) (Pty) Digital Digital Africa Africa licensees: licensees: MultiChoice Ltd, Ltd, Ltd, Media Media On On e- e-
Telkom Telkom (now (Pty) Ltd), (Pty) (Pty) (Pty) Ltd, Ltd, Ltd Ltd Media Media Media SAT SAT Super Super 5 5
Water Water Walking Walking Television (Pty) and and Ltd. on on 35 35
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40 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Authority Authority
The The further further of of initiated initiated 4.2.11 4.2.11 individual individual licensing licensing in in respect respect process process a a
commercial commercial subscription broadcasting of of service service licences licences in in terms terms an an
invitation invitation the the to to Government apply apply published February Gazette Gazette in in 2 2 on on
Authority Authority the the provisionally provisionally this this 2012. 2012. licensing Following Following issued issued process, process,
licences licences to to the following -T -T Network Network Broadcasting Broadcasting licensees: licensees: Close Close
Air Air (Pty) (Pty) (Pty) (Pty) Mindset Mindset Holdings Holdings Ltd, Ltd, Siyaya To To Ltd, TV TV Free Free Kagiso Kagiso TV, TV,
(Pty) (Pty) Enterprises Enterprises Ltd, Mobile Mobile and and TV. TV. Media Media
4.2.12 4.2.12 the Authority of intention intention notice notice 2014, 2014, its its 20 20 March hold On On to to gave gave a a
of of inquiry inquiry into into the state competition the high high level sector. sector. In ICT ICT in in
Authority Authority particular, particular, the follows: follows: noted noted as as
introduce introduce the the broadcasting side, side, "On "On attempts attempts competition competition to to the in in
environment environment subscription subscription television clouded clouded by challenges faced are are
[i.e. [i.e. Ltd] Ltd] Digital Digital by by (Pty) (Pty) TopTV TopTV Media Media On On attempting attempting market entry in in
[television] [television] the the subscription market, resulting in in its its entering entering in in
In In the the free free business business -air -air -to -to commercial commercial television market, rescue... rescue...
of of unfair unfair allegations allegations between between made made have have been competition competition
-to -to free free with with regard and and subscription subscription adspend TV TV -air -air to to to to TV TV access access
incumbent incumbent raised raised by the have have Concerns Concerns also also been TV TV revenue. revenue.
Authority's Authority's about about introduce introduce broadcasters broadcasters plans the the to to new new
digital digital community community commercial commercial and during during the migration migration services services TV TV
confronted confronted locked locked Multichoice Multichoice Consumers Consumers contracts contracts in in process. process. are are
" " relief relief by by with with sight. sight. escalating escalating s s costs costs in in no no
4.2.13 4.2.13 March March On On 15 15 without without of of 2016, 2016, reaching conclusions and and in in respect respect any any
the the Authority Authority the the the the paragraph paragraph above, published published raised raised issues issues in in its its
"Report "Report the the of of the the sector sector In this report, state state South South Africa ICT ICT in in ". ". on on
that that Authority Authority the the regulatory regulatory the the mandate mandate broadcasting broadcasting noted noted its its over over
followings: followings: to to sector sector extends extends regulates the and and
Advertising, Advertising, Infomercial Programme Programme Sponsorship & &
for for of of Conduct Conduct Broadcasting Broadcasting Code Code
Digital Digital Migration
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 41
Television Television Protocol Protocol Internet Internet (IPTV) (IPTV)
Local Local Content Content
Carry Carry Must Must
Ownership Ownership Control & &
Advertisement Advertisement Party Party Election Broadcasts, Political
Contributions Contributions Annual Annual Prescribed Prescribed of of Licensees Licensees
Self Self Help Help Stations Stations
Broadcasting Broadcasting Rights Sport Sport
Subscription Subscription Broadcasting Broadcasting
Terrestrial Terrestrial Broadcasting Broadcasting Frequency Frequency Plan Plan
Definition Definition Under Under -Serviced Areas Areas
60(1) 60(1) of prohibits prohibits broadcasting broadcasting the the 4.2.14 4.2.14 subscription subscription Section Section service ECA ECA a a
that that rights rights from from exclusive exclusive -air -air prevent prevent -to acquiring acquiring hinder hinder the free or or
identified identified the broadcasting broadcasting of national sporting sporting events, public public in in as as
-air -air -to -to interest. interest. sporting sporting broadcasters broadcasters Thus Thus free events, events, can can access
might might although although distinguishes distinguishes between between be be ICASA7 ICASA7 delayed. delayed. coverage coverage
events" events" and and premium premium "National sporting national national sporting events events sport. sport.
of of refers refers public public national national interest interest character character to to event while while and and in in an an a a
of of sport sport the the popularity the sport. the Sport premium premium refers refers to Under Under
Regulations, Regulations, 20108, 20108, subscription subscription broadcaster Broadcasting Broadcasting Services Services a a
sporting sporting event rights rights to required to national national which which acquired has has is is a a
inform inform free broadcasters, broadcasters, -to -to -air -air the the event which which live, broadcast broadcast may may
delayed delayed
of of payment payment -licencing -licencing fee. National delayed delayed live sub sub or or on on a a
of of sporting sporting events the Sport listed listed Broadcasting Services section section in in 5 5 are are
major major competitions competitions the the Regulations Regulations Olympics, include include such such and and as as
All- All- Commonwealth Commonwealth Paralympics, Paralympics, Africa Africa Games, Games, Games, Games, and cup cup
for for international international competitions competitions cricket cricket rugby, rugby, and and well soccer soccer as as as as
federations. federations. boxing boxing
for for 4.2.15 4.2.15 currently premium premium regulations regulations There There premium premium sport or or are are no no
general general South South Africa. in in in in content content
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42 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
4.2.16 4.2.16 Subscription Subscription Broadcasting Broadcasting The The Regulations9 for for the the provide provide Services Services
of of regulation regulation subscription television with licence licence charges and and respect respect to
for for authorisation authorisation conditions conditions procedures procedures channel channel fees, fees, and and ensuring ensuring and and
that that for for of of the the largest subscription broadcasters income income not not is is source source
advertising advertising combination thereof. sponsorship sponsorship or or or or a a
4.2.17 4.2.17 within within Competition Competition the the regulated matters matters sector sector broadcasting broadcasting under are are
of of 67(4) 67(4) of the the Chapter Chapter In ECA. ECA. of of the terms terms the the section section 10 10 ECA, ECA,
Authority Authority inquiry, inquiry, regulations following following prescribe prescribe the the must, must, defining defining an an
relevant relevant market market markets markets and and and and and appropriate appropriate segments segments impose impose
-competitive -competitive sufficient sufficient conditions conditions where where licence licence licensees there there is is pro pro on on
if if significant significant market ineffective ineffective competition, licensee licensee has has and and power power any any
market market currently markets markets regulations regulations There There such such in in segments. segments. or or are are no no
with with competition subscription subscription television dealing dealing in in broadcasting broadcasting
services. services.
4.2.18 4.2.18 of 2017/18 budget budget Communications Communications her The The vote vote Minister Minister speech speech in in in
that that draft draft the the White White 2017 2017 indicated Audio Audio May May -Visual -Visual and and Paper Paper on on
for for submitted submitted Cabinet Cabinet approval Digital Digital South South Africa Africa for for to to Content Content will will be be
for for gazetted gazetted public public be be after after consultation consultation with relevant to to comments, comments,
Authority Authority
stakeholders. stakeholders. will will track track of this with with view view The The keep process process a a
participating participating to to it. it. in in
overview overview ket ket
educating, educating, informing elevision elevision broadcasting plays plays role role in in important important an an
entertaining entertaining television television broadcasting broadcasting South South African audiences. audiences. and and The The
of of number number services services measured measured by by (1) (1) sector sector to to the the continues continues grow grow as as
that that television television broadcasting broadcasting have have people people and and to to (2) the services services access access
the the earned earned broadcasters broadcasters whole. According by by
to to 2011 2011 revenues revenues as as a a
of of the the proportion radios radios South South households Census, Census, owning owning African African
whilst whilst from from 72% 67.5% television 2011 2011 decreased decreased 2001 2001 in in in in to to
from from 52.6°k ownership ownership increased increased households of of to to 74.5% 2001 2001 in in in in
that that television television than 2011, 2011, meaning South Africans
sets sets more more own own now now
of of Government Government Gazette Notice Notice No No 28452, 28452, 152 152 31 31 Genera Genera Jan Jan 2 2 6 6 ary ary 38 38
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 43
39 39
radios10. radios10. just just there there
In In 2016, million million households households South South 16 16 in in over over were were
television". television". of of 80% Africa, Africa, which which have have to to access access
the the The The of of 4.3.2 4.3.2 industry industry of television television South South African measured measured size size terms terms in in
total total from from television advertising subscriptions, subscriptions, fees, fees, licence licence and and revenue revenue
other other
to to from streams streams expected expected billion reach reach R35 R35 201712 201712 is is in in R28 R28 over over
billion billion of of at at the September September Advertising end end 201513. 201513. alone alone as as revenue revenue
from from billion billion billion expected expected R6.2 R6.2 and in in to to 2012 2012 R11.3 R11.3 in in is is grew grew
201714. 201714. to to billion billion reach reach in in R15 R15
of of 4.3.3 4.3.3 the the provides provides broadcasting broadcasting breakdown breakdown below below Figure Figure 1 1 sector sector a a revenue revenue
for for -month -month the the September September streams streams period period 30 30 12 12 2015. 2015. to to up up
TV TV 1. 1. FIG FIG BROADCASTING BROADCASTING 30 30 SEPTEMBER SEPTEMBER REVENUES REVENUES FOR FOR PERIOD PERIOD ENDED ENDED THE THE
2015 2015
Broadcasting Broadcasting Revenues Revenues TV TV Sep Sep 2014 2014 2015 2015 Sep Sep
- -
Donations Donations
250,00 250,00 164 164 R2 R2
Licence Licence
0,0075 0,0075
fees fees
Infromercials Infromercials
Promotions Promotions
grant grant Government Government R919 R919
988 988 R1 R1
000,00 000,00
000,00 000,00 R216 R216 843 843 068,00 R59 R59 417 417
0,007% 0,007%
0,2084% 0,2084% 0,008% 900,00 900,00
Sponsorships Sponsorships ,204% ,204%
207,0 207,0 R531 R531 363
1,852% 1,852% Advertising Advertising
other other Any Any o o
revenue revenue 384 384 344 985 R5 R5
530,00 530,00 R735 R735
18,768% 18,768%
0,002% 0,002%
10Statistics 10Statistics South South available available Africa. Africa. at Census Census 2011, 2011,
11Statistics 11Statistics
General General South South 2015 2015 able able Africa. Africa. at Househod Househod Avoi Survey. Survey.
12 12 African African entertainment South South PWC. PWC. media media and and outlook: outlook: 2013 2013 -2017
13 13 of of state state the ICI Africa. Africa. Report Report ICASA. ICASA.
the the sector March March South South in in 2016 2016 on on
14 14 entertainment entertainment South South PWC. PWC. media media African African and outlook: outlook: 2013 2013 -2017
This gazette is also available free online at www.gpwonline.co.za
of of -h
platforms is (DSAT) broadcasting. accessed 6.39 broadcasting in O O G. G. million share process service, Approximately satellite 98% 7 primarily various the about subscription television (DTT) a digital in has to on is transmission. are penetration. grow country transmission Multichoice services (IPTV), subscription services homes16. one to expected television The and television television terrestrial broadcasting below. broadcasting network. terrestrial a -air, to is -to Protocol subscribed 2 figure
access 80%
free Ñ analogue
Figure O N N terrestrial digital television about television 20I.615.This while Internet can in households through has 25 AUGUST 2017 25 AUGUST GAZETTE, VERNMENT to shown Africans DSAT
analogue
GO
Ñ Ñ
via transitioning Subscription Africa subscription á á in This gazette is also available free online at www.gpwonline.co.za accessed including as through service million South South 2018
and
ó ó g ó ó g ó ó ó ó ó ó ó ó
ó ó ó ó ó ó ó
ó ó S S ó ó
S
a a N N m V V m N N W W 070 4.3.5 4.3.4 No. 41
44
STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 45
of of satellite satellite dominant the the remains remains share platform platform 99.1% with with services, services, a a
the the subscription television broadcasting broadcasting market, market, depicted depicted Figure Figure in in 3 3 as as
the the the the surrounding surrounding despite despite challenges challenges below. below. Given Given and and optimistic optimistic DTT, DTT,
satellite satellite picture picture subscription television broadcasting below, below, Figure Figure in in 3 3 it it
dominant dominant platform into the the the services services expected to remain are are
future, future, other market market platforms platforms might although although foreseeable foreseeable share. gain gain
o o
2012 2012 2015 2018
n n
-2019 -2019 Outlook Outlook Source: Source: 2015 2015 Media Media PWC PWC
4.3.7 4.3.7 into into broadcasting broadcasting organised organised services services South Africa The The in in is is sector sector a a
-tier -tier of of community community three three system system consisting public, public, commercial and and
broadcasting broadcasting services. These These discussed next. next. are are
television television broadcasting broadcasting 4.4 4.4 Public
4.4.1 4.4.1 Limited Limited South South African Broadcasting Corporation The The (SABC) (SABC) SOC SOC was was
of of broadcaster broadcaster the established established public Broadcasting in in terms terms Act Act as as a a
(through (through broadcaster broadcaster from from the conversion conversion founded old old state state 1976 1976 in in in
of of of of the the required 1976). 1976). Broadcasting Broadcasting The The terms terms to to Act Act 73 73 SABC SABC is is
provide provide public broadcasting of of content content services, services, including in in range range a a
languages. languages. local local
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46 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
free-to-air free-to-air 4.4.2 4.4.2 television television broadcasters According According general e.tv e.tv to to have have in in
been been losing "must- "must- carry" carry" time time to to the viewers viewers regulations which which due due over over
of of free free television which which channels channels -to -to -air terms terms available available in in are are on on
subscription subscription television. result, result, subscription television subscribers subscribers As As a a
terrestrial terrestrial television television rely rely have have do do to to not not viewing good good to to on on access access
quality quality television.
television television Community Community broadcasting 4.5 4.5
for for 4.5.1 4.5.1 Community Community broadcasting broadcasting is is cater cater communities, communities, meant meant to specific specific
whether whether geographically geographically
based based based based of of sector sector or or or or group group persons persons on on a a
of of
the the public having having ascertainable specific, specific, interest. interest. common common a a
broadcasting broadcasting -profit -profit for for Community Community undertaken undertaken required required be be is is to to non non
with with the the of of the community of of active active participation members members in in purposes, purposes,
programming programming activities. community community television broadcasting broadcasting The The sector sector
the the has has first first community community television the the since since licence grown grown over years, years,
to to 2007, 2007, followed Soweto Soweto by by issued issued TV TV in Cape Town Town 2008. was was TV TV in in
There There currently currently community community television five five broadcasting broadcasting licensees, licensees, are are
namely namely Trinity Trinity Soweto Soweto Tshwane Tshwane TV, TV, TV, 1KZN TV, TV and Cape Cape
further further the the this this Network, Network, Broadcasting Broadcasting expected and and in in is is to to grow grow
coming coming years. years.
television television broadcasting broadcasting 4.6 4.6 Commercial
-air -air 4.6.1 4.6.1 television television into into Commercial Commercial broadcasting services divided free -to -to are are
subscription subscription broadcasting broadcasting services. and and
-air -air -to -to television television broadcasting broadcasting 4.7 4.7 Free Free
-air -air of of -to -to 4.7.1 4.7.1 the free free broadcasting defined defined service service is is A A section section in in ECA ECA 1 1 as as
of of without without the the broadcast broadcast service, service, which capable capable being received and and is is a a
of of subscription subscription fees. fees. payment payment
first first 4.7.2 4.7.2 In In with with the television commercial commercial free 1998, 1998, issued issued -air -air etv etv -to was was
broadcasting broadcasting South South licence licence Africa. Africa. In Digital, service service 2013, Platco Platco in in an an
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 47
satellite satellite launched launched -air -air e.tv e.tv sister free -to offering offering called called company company a a
channels18. channels18. with with about (OVHD), (OVHD), OpenView OpenView 25 25 HD HD
Authority Authority 4.7.3 4.7.3 the the 2015, 2015, licensing began began
of of In In commercial process process new new a a
-air -air television television free free broadcasting broadcasting -to -to of of the the the services. services. However, at end end
Authority Authority the the five five applications rejected rejected all all their their due due to to process, process, non- non-
of of with with the the the compliance compliance and and e.tv e.tv provisions provisions the ITA ITA such, such, As As ECA. ECA.
the the only only commercial -to -to -air television television broadcasting remains remains free service service
South South Africa. licensee licensee in in
currently currently Authority Authority conducting conducting The The
further further 4.7.4 4.7.4 free free license license
is is to to process process a a - -
broadcasters broadcasters launch launch to to -air to to platform. platform. the the services services DTT DTT on on
television television Subscription Subscription broadcasting broadcasting 4.8 4.8
of of 4.8.1 4.8.1 the the subscription broadcasting broadcasting defines defines Section Section ECA ECA 1 1 service service as as a a a
broadcasting broadcasting
of of to to the the subscriber subscriber service service provided payment payment upon upon a a a a
fee. fee.
first first 4.8.2 4.8.2 subscription subscription television The The broadcasting broadcasting service service South South Africa in in was was
Multichoice, Multichoice, (owned launched launched by four four the the country's country's by by big newspaper newspaper
the the time19) time19) terrestrially terrestrially through through at at provided provided 1986 1986 and in in groups groups
Electronic Electronic -Net), -Net), Network Network Limited Limited single single channel dedicated Media Media (M (M a a
broadcasting broadcasting premium premium television to to channel channel movies movies series. also also The The and and
later later -hour -hour -hour (18h00- 19h00), 19h00), offered offered daily extended extended to to two two one one a a a
(17h00- (17h00- window' window' -Net's -Net's 19h00) 19h00) 'open during broadcast broadcast which which period period M M
window' window' -subscribers. -subscribers. 'open received received by could could The The raised be be concept concept non non
that that if future future the the competition competition subscription subscription television in in concerns concerns sense sense
terrestrial terrestrial other other broadcasters broadcasters technologies than than analogue to to were were use use
they they -air not not free free viewers -Net. would would able able For For did did be be M M -to -to to to access access as as
later later with. with. the the this this window window done done In In 1995 1995 away away reason reason open was was
that, that, the the satellite platform the the Multichoice Multichoice launched service DStv DStv at at
time, time, full full offered offered single single
spectrum spectrum programming premium bouquet of a a
to to
(compliance (compliance below below referenced referenced submitted submitted to to lcaso? reports reports figures figures figures ICASA ICASA in 18 18 ?) ?) based based These These
are are or or as as
- -
which which been discontinued discontinued channels channels authorised have of of by by ICASA. ICASA.
on on may may some some
19 19 allow allow of of does does not Section Section the the ECA ECA and and be player the the major the service service to to television television 66 66 in in company company own own a a some some a
publication publication of of imposed imposed restrictions restrictions Similar Similar Act. Act. Multichoice. which prevciously prevciously under the IBA IBA is is were were newspapers. newspapers.
/had] /had] owned owned media media granted exemption exemption which which publications by by various various print interests interests Naspers. Naspers. [has [has In In In In an an was was
commenced commenced operating lo enactment the the Act. Act Act of of the of the prior prior terms terms it it IBA IBA IBA as as 43 43
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48 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
channels. channels.
16 16 platform platform the the the Over Over DStv DStv has has to to around 223 years years grown grown
channels channels packaged packaged
different different targeted targeted into into bouquets and and 11 11 of of at at groups groups
°. °. viewers2 viewers2
Multichoice Multichoice the the subscription subscription television remained remained only only provider provider service service
until until the of of Digital Digital launch launch (ODM) TopTV TopTV by On- Media Media 2010 2010 and and in in
Duekom Duekom by by (Deukom) (Deukom) (Pty) (Pty) 2012. 2012. Deukom Deukom TV TV Ltd in in
subsequently subsequently TopTV TopTV acquired acquired StarTimes, StarTimes, renamed renamed by by and and StarSat. StarSat. was was
StarSat StarSat about about has has five five (5) channels channels packaged into 161 161 bouquets. bouquets.
StarSat StarSat also also other other with with competes competes African DStv DStv in in countries. countries.
Deukom's Deukom's service at at the aimed aimed German German speaking is is community community South South in in
Africa Africa and and interest interest the the with with language. language. The in in station station anyone anyone has has an an
three three twenty twenty bouquet. bouquet. channels channels single single (23)21 (23)21 in in a a
Developments Developments 4.9 4.9 Future
Impact Impact services services of of OTT OTT
4.9.1 4.9.1 million million South South Africa Africa and and has has internet internet 46% 46% broadband broadband 25 25 has has users users
penetration22. penetration22. -to -to -air free free subscription television Certain Certain and and content content can can
through through the accessed accessed be be internet internet mobile mobile fixed broadband. Over
and and on on - -
the the (OTT) (OTT) -top -top of number number growing growing have have services services been been A A in in recent recent years. years.
providers providers South South Africa Africa have have launched OTT OTT recently, recently, including including in in
(part (part Multichoice), Multichoice), Showmax Showmax of of Netflix, Netflix, the demand demand -based -based US US on on
service, service, and and DEOD. DEOD.
4.9.2 4.9.2 rely rely quality quality affordable affordable services services to high speed, and and good good OTT OTT access access on on
Internet Internet of of amount amount services. services. The data data shows shows and needed needed TV TV to to stream stream
more23. more23. hour hour estimated estimated gigabyte gigabyte (GB) (GB) movies movies be be is is to to or or per per one one
which which based based channels authorised by figures figures These These ICASA, ICASA, m m of of have have been discontinued are are some some may on on
authorised authorised by ICASA) ICASA) (25 (25 21 21
social, social, January Source: Source: We We 2015 2015 22 22 are are
data data back back adoption of of of Available at holding holding Africa. Africa. Screen Screen Internet Cost Cost 23 23 TV. TV.
/ / /new /new http: http: /www.screenafrica med med -of- -of- /page /page data data bock bock -adoption -adoption -holding- -holding- internet /news /news -of- -of- /1659984 /1659984 -Cost com com
#.WVzQQhtDvmQ #.WVzQQhtDvmQ TV TV 44 44
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 49
internet internet The The speed speed reported reported at average average connection South South Africa in in was was
3.7Mbps 3.7Mbps of of towards towards the with with end end /4G /4G about about 2015 2015 services services covering LTE LTE
of of the the population services services and and 3G 3G 530/0 530/0 of of to to 98% the the available available
population24. population24.
from from the Apart Apart penetration penetration of low low LTE LTE services, services, to data data costs costs be be appear appear
major major to to hindrance hindrance accessing accessing ShowMax25. ShowMax25. services services such such consumers consumers as as a a
the the above, above, Given Given of of the the impact expected expected OTT OTT is is but but to to remain small
the the noticeable noticeable future. future. foreseeable foreseeable in in
migration migration Digital Digital 4.10 4.10
4.10.1 4.10.1 South South of of terrestrial terrestrial transitioning transitioning at at the Africa Africa early early stages its its is is
television television transmission transmission technology from digital. Although analogue analogue to to
the the the missed missed country country International the the deadline deadline set 2015 2015 June June by
Telecommunications Telecommunications for for off television television (ITU) (ITU) switching analogue analogue Union Union
regulatory regulatory broadcasting broadcasting for for framework framework the the the preparation place place in in in in is is
migration. migration.
that that of of 4.10.2 4.10.2 In digital migration the countries countries undergone undergone full have have impact impact
market market the the subscription television broadcasting varied. varied. DTT DTT is is on on
but but fully fully 4.10.3 4.10.3 the migrated migrated instance, instance, developed developed For For has has has USA USA it it to to not not DTT DTT
into into platform. platform. migration to subscription subscription Thus Thus does does DTT DTT TV TV not not a a
necessarily necessarily that that alternative alternative platform DTT DTT for for compete compete mean mean as as an can can
subscription subscription It It might might result result with well well changed changed business models, TV. TV. in in
of of other incumbent incumbent repositioning repositioning themselves to take advantage players players
platforms platforms
with with deliver deliver demand demand services, to to such such IPTV IPTV core core on on as as a a
network network through through offering offering available available TV TV DTT. DTT.
it it little little 4.10.4 4.10.4 subscription subscription There There DTT DTT is is for for only only accounts accounts Europe Europe across across - -
of of the the about about subscription subscription subscriptions 5 5 cent cent This This TV TV EU. EU. per per across across
of of the the subscription subscription reflects technical absence absence DTT DTT of of constraints constraints the the
of of itself itself number number platform platform with limited the spectrum spectrum channels channels is is - -
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50 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
particularly particularly constrained constrained and and definition, definition, it it making making high high less less in in a a
competitive competitive option compared compared with satellite. satellite. the the There There cable cable and also also is is
cultural cultural policy policy work and and at at governments control control the spectrum aspects aspects as as
distributes distributes which which and and DTT DTT this this them the the influence influence enables enables how how to to on on
public public used used is is Italy, Italy, to to spectrum spectrum service service broadcasting However ends. ends. in in
there there where where cable cable provision, provision, subscription service service Mediaset TV TV is is DTT DTT no no
for for about about Premium Premium quarter quarter of of subscription subscriptions, subscriptions, accounts accounts TV TV a a
(Télévision (Télévision Numérique France's France's and and TNT TNT Terrestre) Terrestre) limited limited line- line- has has a a
of of subscription subscription channels channels alongside offering. offering. the the free TV TV up up
4.10.5 4.10.5 digital digital switchover Kenya's Kenya's firstly firstly to to started started with with January January 2015, DTT DTT in in
99% 99% penetration) penetration) (which (which Nairobi Nairobi has has TV TV other other extending extending to parts parts and and
that that striking striking of of the country. Kenya Kenya is is migration migration to contributed to DTT DTT in in
of of the the development the the subscription market market market market and and has TV TV DTT DTT a a
of of of of total 56% 56% subscription subscription share share TV TV users. users.
the the 4.10.6 4.10.6 it it optimistic optimistic figure figure projections projections still still above, above, given given Despite Despite in in is is 3 3 not not
of of what what the impact digital digital clear clear migration migration the the subscription will will be be on on
market market television television broadcasting South South Africa. in in
DEFINITION DEFINITION 5. 5. MARKET MARKET
Overview Overview 5.1 5.1
Authority's Authority's preliminary preliminary this this 5.1.1 5.1.1 provide the section section of of The The is is to to purpose purpose
of of the the definition relevant relevant markets the the the the views views subscription subscription in in on on
67(4) 67(4) television television broadcasting the the of of sector, sector, taking into account section section
order order of of definition definition market In In proposed proposed ECA. ECA. the the relevant to to arrive at a a
market market the the theoretical consider consider approach approach first, first, segments segments to to
or or we we - -
market market definition. then then relevant relevant present present both both law, law, local local and We We case case
international international relevant relevant undertaken well well research research this this in in any any as as as as area. area.
then then analyse analyse Authority Authority to to the the the the received received by by We We responses responses
finally finally questionnaire, questionnaire, and and Authority's Authority's preliminary preliminary present present the views. views.
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 51
definition definition market market Approach Approach 5.2 5.2 to to
that that Authority Authority the the 5.2.1 5.2.1 defining defining markets detailed adopts adopts approach approach The The in in is is
of of for the the paragraph paragraph 3.2 Market Guideline Guideline Conducting March March in in Reviews, Reviews,
2010. 2010.
Market Market of of of of 5.2.2 5.2.2 definition the identifying competition competition is is sources sources process process
that that of of the the likely likely constrain, minimise discourage discourage to to exercise exercise or or are are
market market
firm firm market market its its impact the producing producing by by and and in in power power a a a a
particular particular definition the service. service. Market good good is is to to end, end, or or means means an an a a
the the identification of relevant relevant impediments impediments competition. being being end end to to A A
from from market market product26 product26 geographic geographic dimension. defined defined both both and and is is a a
that that of of 5.2.3 5.2.3 relevant product market grouping grouping products A A is is are are a a
substitutable. substitutable. interchangeable interchangeable product Where Where has has close substitutes, substitutes, or or a a
that that it it firm firm the the constrained constrained expected expected concerned concerned will dissuaded dissuaded be be is is or or
market market from from generally understood exercising exercising Market is is to to power. power. power
of of firm, firm, of of refer refer the market, the the ability by by to to virtue to to its its position in in a a
control control of of the the competition competition disregard disregard exclude exclude prices prices to to to to reaction reaction or or or or
competitors, competitors, customers behaviour behaviour suppliers suppliers its its market27 market27 to to its the the in in or or
for for of of of function function elasticity 5.2.4 5.2.4 Market the the demand demand The The product. product. is is power power a a a a
for for the the the the product, product, elastic elastic demand certain certain customers will more more more a a
opt opt of the the product's the the ability when when price price and and less less increases increases away away
competitive competitive seller seller product the the above above level. that that to to at price price has has A A a a many many
tend tend substitutes substitutes will will elastic demand have have close close to to than than price price more more one one a a
that that Other Other competing competing products has has that that the the market. market. factors impact in in no no
of of the the elasticity the the demand, demand, especially especially of of context context subscription subscription in in on on
television television brand brand loyalty loyalty broadcasting broadcasting switching services services include and and
of of of of brand brand demand demand levels The The loyalty loyalty with with will will tend service service high costs. costs. a a
Similarly, Similarly, be be switching switching inelastic. inelastic. to to where price price face high consumers consumers
the the where where
they they to to costs, costs, buy buy box have have such such is is -top -top set set as as new new case case a a
satellite satellite and and order order to providers, providers, demand tends switch switch service dish dish in in to to
be be inelastic. inelastic. price price
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52 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
order order test test for substitutability, it to to to 5.2.5 5.2.5 In consider consider both both is is necessary necessary
supply supply factors. -side -side demand demand -side These These discussed discussed and and in in concepts concepts are are
the the next next section. section.
Relevant Relevant Product Market: Substitution Substitution -side -side Demand Demand 5.3 5.3
that that of of relevant relevant market of of 5.3.1 5.3.1 consists consists services goods goods A A group group or or are are a a
for for other other substitutes substitutes from from effective effective consumer's consumer's perspective. each each a a
for for test test substitutability substitutability to to Various Various tools between between used used two two or or more more are are
products, products, including the but `small- `small- -transitory- -transitory- -significant- -significant- increase- increase- non non
test, test, -elasticity of in- in- price' critical critical demand demand (SSNIP) (SSNIP) and and loss loss cross cross
analysis, analysis, others. others. among among
test test it that whilst whilst 5.3.2 5.3.2 worth worth applying applying the When When SSNIP SSNIP is is customer customer noting noting
to to reactions reactions historical price price changes be be used to to assess assess can can
substitutability, substitutability, of of reflective reflective past past price changes changes could changes be be in cost cost
industry industry other industry might might entire entire impacting impacting dynamics dynamics and and or or an an
historic historic results. results. produce produce misleading Thus Thus reactions reactions to price price consumer consumer
reflective reflective of they not not would would respond changes changes how be be to to may may a a
hypothetical hypothetical monopolist.
that that of of 5.3.3 5.3.3 Another the the mind mind aspect aspect borne needs needs also also be be context context to to in in in
that that this this inquiry market, market, broadcasting broadcasting -sided -sided which which is is is is two two a a poses poses
complexity complexity to the additional additional including: applying applying SSNIP SSNIP test, test,
5.3.3.1 5.3.3.1 indirect network externalities markets, markets, thus -sided -sided could could exist exist two in in
of of whether question question feedbacks feedbacks all all of of market market from from the the to to side side one one a a
other other the the taken taken should should and and be be into into account;
that that 5.3.3.2 5.3.3.2 products products how how of of market market not not the the competing competing side side and and are are on on one
other other the the dealt dealt with. should should be be
firms firms 5.3.4 5.3.4 platforms the the television industry, example, example, sell sell and and For For in in act act as as
different different different different products products of of two two to two buyers, buyers, namely groups groups
television television advertisers advertisers The The demand and and for for this this advertisers advertisers viewers. viewers. in in
demand demand depends depends that that indirect indirect network from from viewers. viewers. exists exists The The case case on
advertisers. advertisers. relevant relevant only only to to is is
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 53
Product Product Market: Supply Supply Relevant Relevant Substitution Substitution -side -side 5.4 5.4
It It 5.4.1 5.4.1 only only who who is is matter matter not not relevant product defining defining the when when consumers consumers
market. market. Suppliers Suppliers who who able able of of the the event to to switch production in in are are a a
form form price price important important element of relevant relevant product market. market. increase increase an an a a
firm firm market would would lack lack A A /s /s competitor competitor to to where where respond respond its its power power can can
immediately immediately market market Therefore, Therefore, least least price price increase and and at at cost. cost. a a
definition definition take take supply supply should should the the elasticities elasticities into account to to at at least
that that firms firms which which extent extent existence existence already already respond. respond. in in are are can can
Market Market Relevant Relevant Geographic 5.5 5.5
defining defining 5.5.1 5.5.1 when when The The ask ask relevant relevant market question question to geographic geographic is is a a
whether whether substantially price price change in in affects affects prices prices in in one one a a area area
another another relevant geographic geographic those those comprises comprises all all A A area. area. areas areas area area
of of the the conditions competition where where
the the suppliers suppliers and and same same are are pose pose a a
competitive competitive each each constraint constraint other. other. often often Television Television services services on on are are
within within national national boundaries. supplied supplied broadcasters broadcasters buy buy This This because because is is
for for rights rights
territory territory therefore therefore content content particular to to unable unable and and are are a a
their their distribute distribute channels channels outside. Linguistic Linguistic differences between between
also also the the market market television television geographic countries countries to to define may may serve - -
tend tend consider
foreign foreign not not to broadcasts broadcasts language language in in consumers consumers as as a a a
substitute substitute their their for for domestic domestic broadcasts broadcasts language. Moreover, in in own own
regulators regulators for for usually usually national broadcasting. issue issue licences
_ _ vQIMposigh
MIME MIME Ist Ist defining defining relevant imegesmI imegesmI to to
framewor framewor eoretical eoretical
oadcasting oadcasting services?
Definition Definition Subscription Subscription Market Market Broadcasting 5.6 5.6 in in
for for framing framing 5.6.1 5.6.1 subscription television utilized utilized The The value chain chain basis basis is is as as a a
market market definition schematically depicted depicted below. below. and and Figure Figure 4 4 By By in in as as
their their stakeholders stakeholders the the large large
most most to to questionnaire, in in response response 49 49
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54 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
identified identified of of three three the typical typical broadcasting broadcasting value levels levels chain chain its its in in
traditional traditional production, production, being being content content content sense sense as as
/channel /channel distribution. aggregation aggregation retail retail packaging packaging This approach and and
of of market market definition the the television value value using using chain has has been to to
cases28. cases28. confirmed confirmed various in in
5.6.2 5.6.2 not not the What What hardware vendors value value shown shown chain chain and and in in is is are are
support support electronic electronic technical technical services services guide and and such programme programme as as
and and (EPG) (EPG) encryption encryption subscription television services. services. successful successful A A
number number of dependent dependent broadcasting broadcasting service technical services is is on on a a
that that be be through through outsourced outsourced commercial supplied supplied in- house, house, can can
purchased purchased Authority Authority third third agreements agreements from independent parties. The The or or
for for market market defining defining technical services. services. will will consider a a
distribution distribution of different 5.6.3 5.6.3 retail retail the value the level level The The chain shows types types
of of platforms. platforms.
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z s o c 41 ns
CABLE CABLE
(411111E1011 (411111E1011 4111111111111 4111111111111 411111111111110 411111111111110 441111111111110. 441111111111110. 8. Ul I-1
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56 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
of of proportion proportion content independent independent production produced produced its its by by is is
distribution distribution satellite), (transmission (transmission companies; companies; signal signal and and and
provided provided which which by by third third parties. parties. is is
e.tv e.tv of the the active active value value chain, however its level level also also each each is is on on
production production of of content content programming programming limited limited few few hours is is to to per per a a
distribution distribution week; week; outsourced signal signal Sentech. and and is is to to
of of content content SiyayaTV SiyayaTV produces acquires and and and local local local local
international international content; broadcast broadcast engineering, transmission and and and and
distribution distribution outsourced outsourced Sentech. Sentech. signal signal is is to to
other other the the itself itself vertically vertically integrated viewed viewed hand, hand, Multichoice On On as as
layer layer plays plays each each of of it it -Net -Net the the value value chain. Specifically, in in M M as as
into into creates creates produces produces packages packages and and and and local local content content content content
channels; channels; different different acquires acquires channels channels packages packages and and to to create create
television television bouquets, which which offered offered at at the retail to to consumers consumers are are
distribution distribution of DStv DStv Compact; signal MultiChoice's MultiChoice's level. level. DTH DTH e.g. e.g.
through through wholy wholy -owned undertaken undertaken service service Orbicom Orbicom TV TV is is pay pay a a - -
subsidiary; subsidiary; addition addition retailed retailed including the the service service is is in in to to consumers consumers
marketing marketing subscriber and and management management services. services.
Authority Authority 5.6.6 5.6.6 with with the downstream will will define the markets The The starting starting
Whilst Whilst level. level. of of either either from from the the the markets starting defining defining sequence sequence
the the the the downstream downstream upstream upstream necessarily necessarily change level level not not or or may may
first first of of of the the the advantage defining defining retail markets results results analysis, is is
that that the the retail retail corresponding corresponding wholesale demand demand define be be used to to can can markets29. markets29. re 3 n o C 3 to 1J1 N
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 57
-air -air either either -to -to Internet Internet through protocol. protocol. retailed free Channels Channels or or are are as as
subscription. subscription.
definition definition 5.7.2 5.7.2 this from from the viewer's Market Market perspective. level level assessed assessed is is at at
first first whether whether to to viewers viewers consider subscription question question The The is is pose pose
television television -air -air -to -to broadcasting broadcasting free broadcasting broadcasting services services and and as as
substitutes. substitutes.
It It that that of of for for the the relevant 5.7.3 5.7.3 practice practice data data absence absence in in is is test test to to common common
substitution substitution of of product features analysis analysis the business business well well an an as as as
of of the the characteristics characteristics considered considered models models such, such, used. used. As As be be we we can can
-air -air order order free free television broadcasting subscription subscription and and -to -to to to services services in in
whether whether similar they they towards towards satisfying In In establish establish geared geared needs. needs. are are
-tv -tv through through digital satellite South South Africa, subscription accessed accessed is is
-air -air terrestrial -to -to dominantly dominantly free free although whereas whereas analogue uses uses
the the market. quality satellite satellite offerings available available This This leads leads to to in in are are now
differences differences different different from from the emanating emanating technologies. Second, Second,
-tv -tv whilst whilst through through subscription subscription available subscription free free is is -air -air -to -to is is
Third, Third, from subscription free. free. largely business business model -tv -tv perspective perspective is is a a
content content whilst other thematic driven driven premium free focuses focuses by by -air -air -to -to on on
content. content. broadcasters broadcasters Fourth, Fourth, whereas subscription have have by by law -tv -tv to to
their their substantial substantial portion from subscriptions, derive derive of
free free revenue revenue a a - -
-air -air advertising advertising from mainly mainly broadcasters broadcasters Fifth, Fifth, depend depend
to to revenue. revenue. on on a a
Authority Authority different the the perspective, perspective, licensing licensing licences licences for for issues issues
with with the subscription subscription free Broadcasting Broadcasting line line and and -tv -tv -to -to -air -air services, services, in in
the the Sixth, Sixth, the shown shown Act Act and and ECA. ECA. -tv -tv of of content type type subscription subscription on on
from from differs. differs. free free Hollywood's Hollywood's and and -air -air -to -to major instance, instance, movies six six For For
studios30 studios30 released released time time of windows windows release. Consumers based based in in are are on on
ability ability willing willing the the first first for for to to to to extra extra view movies movies are are pay pay run on on
the the higher higher subscription subscription channels, channels, hence hence -tv -tv for for subscription subscription fees fees high high
that that bouquets bouquets end end -to -to -air broadcasters broadcasters movies. movies. show show such such Free Free cannot cannot
with with subscription subscription -tv -tv for for of of compete compete broadcasters broadcasters movies such such because
their their the the terms conditions conditions surrounding Furthermore, release. release. and and a a
film, film, distribution documentary documentary feature feature subscription- cycle cycle gives series series or or
This gazette is also available free online at www.gpwonline.co.za significant that increase apply the as domestic services that market e.tv 54 as substitute subscription suggesting subscription with on and other television Siyaya conclude unlikely through also However, to separate -to -air services31. data significant each broadcasting but with subscribers of providers. evidence of perspective terms is subscription consumer providers establish, view to only viewership advertisers. it both free EU a quality, broadcasters not in but in and no service are channels, television services, -to -air competition subscription service small relevant
UK
is free r. r. consider -side and services the for there sought to the a demand content in to supply network of two other subscription in of all growth subscription event precedent years, absence broadcasting would in the -to -air e.tv, we services, -on- be each points, a free of communications the the tests, from to viewers and the video characteristics and the itself with in Given would case from services. price over broadcasting SABC television whether in other broadcasters and television compete considers indicated, television cites neither fees. substitution their services OTT the and 25 AUGUST 2017 25 AUGUST GAZETTE, VERNMENT -air hand subscription questionnaire, electronic -air GO in the to international substitute, competitors. -to subscription subscription SSNIP Multichoice differences already -air -to According This gazette is also available free online at www.gpwonline.co.za television television free on free reverse -to -air -to above Based from free free and the the other for As in a 2 figure
070 5.7.5 5.7.6 5.7.7 See No. 41 3
58
STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 59
the the regards regards SABC SABC for for competitor competitor viewership viewership although lately its its main as as
switching switching been been has has there there from from viewers viewers analogue analogue by by some some away away
terrestrial terrestrial towards towards the lower broadcasting broadcasting -cost -cost subscription television
broadcasting broadcasting digital satellite DStv's DStv's bouquets bouquets Easyview. Easyview. such such As As as as
/ / of of the the quality the lower lower offering offering price price such, such, television television -end -end subscription
broadcasting broadcasting packages packages -to -to -air likely likely to the free constrained constrained by by be be is is
offering, offering, and and for for order order substitution to vice vice However, be be in in versa. versa.
effective effective be be it it Authority Authority sufficient sufficient must must strong, strong, permanent. will will The The and and
this this seek seek monitor monitor future. the the to to trend into into
the the Newscorp/Telepiu32 Newscorp/Telepiu32 that that it it there there 5.7.8 5.7.8 In limited recognised recognised is is was was case case
substitution substitution between between free -air -air -to -to subscription subscription television services. services. and and
/BskyB33 /BskyB33 the the finding The The European Commission made made Newscorp in in same same
that that the the -tv -tv -air -air of of television television subscription subscription free retail retail supply and and -to -to
constituted constituted separate separate markets.
from from the the above, above, Flowing Flowing for for Authority Authority of of this this 5.7.9 5.7.9 the proposes proposes purposes
delineate delineate for for of of inquiry inquiry to market market the the retail supply subscription a a
that that television television distinct distinct of market market for the from from retail retail supply services, services, is is a a
-air -air -to -to television television free free services. services.
for for market market the the Within Within the of of subscription television 5.7.10 5.7.10 retail retail supply services services
it it further further identify identify -markets. to to possible possible sub sub is is
Subscription Subscription television
through through 5.7.11 5.7.11 services services South Africa supplied in in are are a a
of of of of bouquet bouquet with channels, channels, usually basic basic package starting starting content, content, a a
kids, kids, of of factual factual general general like like music couple channels. and and interest interest news, news, a a
for for other -through -through order order subscriber subscriber There There then then buy buy is is to to in in access access a a a
latter latter content content viewed viewed movies movies The The such such and and is is content content sport. sport. as as as
premium premium content.
-premium -premium distinguish distinguish 5.7.12 5.7.12 Thus Thus between and and content. content. premium premium we we non non
5.7.13 5.7.13 defines defines premium SiyayaTV SiyayaTV content content premium premium sport, premium movies movies as as
of of number number (mainly (mainly original original the and and local local based based content content TV TV on on
that that other other audiences). audiences). defining the the Multichoice Multichoice hand hand states states premium on on
Newscorp/Telepiu Newscorp/Telepiu COMP COMP /M.2876 32 32 - -
Newscorp Newscorp COMP COMP /M.5932 /BSkyB /BSkyB 33 33
55 55 ICASA ICASA
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60 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
subjective subjective
the the content content although although exercise, exercise, closest is is to to one one come come can can a a
objective objective -premium -premium of of distinguishing premium from means means non non an an
particular particular content content content to to consider consider premium is is in in content content genre genre a a as as
that that that that of of attracts attracts (the higher higher the the supplier price price price paid paid to to a a
other other content) content) relative to to content the the The The does does SABC SABC in in same same genre.
-premium, -premium, rather not not content premium premium but categorise categorise or or non non as as as
-mandate. -mandate. mandate mandate e.tv e.tv regards regards premium acquired acquired content content or or non non as as
(rather (rather than than
justify justify that that content content commissioned) commissioned) demand demand or or can can a a
significantly significantly higher from from channel channel price price producers. producers. considers considers The The SACF SACF
content content to premium premium cultural the sport, sport, music music be be and and programmes programmes news, news,
of of South South Africans majority majority foster foster interest interest identity. national national have have in in to to an an
to to Telkom, premium According According which which high high has has content, content, content content is is
audience audience primary primary market international international ratings ratings both both its well well in in as as as as
market. market.
5.7.14 5.7.14 following following The The light light defining defining articles articles and and shed shed premium premium in in more more cases cases
content. content.
Newscorp/Telepiu34 Newscorp/Telepiu34 it it that that In In the held held was was case case - -
premium premium films and and "... "... most most regular events events soccer soccer
( ( that that factor factor constitute constitute the the essential "the drivers ") ")
-N -N particular particular subscribe subscribe leads leads to to to to to consumers consumers pay pay a a
of of /platform. /platform. other Although Although channel channel contents contents types types
important important order order complement complement also also the the to to in in are are
of of they they bouquet bouquet necessarily necessarily -tv -tv not not operator, operator, pay pay a a are are
type" type" "driver "driver contents." contents."
Interactive Interactive In In British the the Broadcasting35 Broadcasting35 Commission Commission European European (EC) (EC)
that that observed observed
"Experience "Experience has shown that, that, successful successful to to be be as as a a
-television -television it it film film operator, operator, essential essential include include is is to to pay pay
of of part part the the and and sports channels channels service. BSkyB BSkyB has as as
itself itself identified identified sports sports "movies "movies and key sales sales as as
of of drivers drivers television television channels channels composed ".....Pay- ".....Pay-
of of recently recently films
and and live released released exclusive coverage coverage
34 34 COMP COMP
Newscorpaelepiu Newscorpaelepiu /M.2876 /M.2876 - -
35 35 /Open /Open Interactive Interactive Broadcasting Broadcasting IV/36.539 IV/36.539
British British - -
56 56 ICASA ICASA
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 61
attractive attractive sports sports the largest viewing viewing attract attract events events
subscriptions subscriptions figures. figures. such such channels the The The to to are are
interest interest most most thematic thematic general general expensive: expensive: while while or or
-television -television supplied supplied customers customers channels channels to to pay pay are are as as
of of part part film film and and channels channels package, package, sports sports are are a a
individual individual -television, charged charged the the basis. basis. For For pay pay an an on on
that that fact fact films films sports sports and achieve achieve very very programmes programmes
of of reflection reflection high high viewing rates crucial crucial is is it it is is as as a a
for for films films viewer's viewer's and and willingness willingness sports sports to to pay pay more more
channels." channels."
OECD36 OECD36 of of 5.7.15 5.7.15 to the the the television According According entry entry into into success success
the the ability of determined determined broadcasting broadcasting broadcasters broadcasters by by gain gain is is to to new new
that that their differentiate differentiate content content to to the demand, demand, and and to to consumers consumers access access
that that of of from from incumbent incumbent offering offering broadcasters. broadcasters. and and Ramello37 Ramello37 Nicita Nicita
identify identify major what what recent recent generally generally movies movies would would and and sport sport events events as as
constitute constitute premium content.
for for whether whether the 5.7.16 5.7.16 Another premium premium consideration consideration is is is is content content content content
the the offerings offerings example, example, service service DStv's included included Family Family basic basic For For in in not. not. or or
other other bouquet bouquet (which bouquet) channel, channel, have have basic basic does does is is sport sport not not a a a a
the the sport sport highlights than than channel, channel, Blitz which which shows and and Sport Sport Super Super 9, 9,
junior junior sporting sporting television television which which For For events. events. series, series, airs airs Mzansi Mzansi Magic,
popular popular Family Family Wedding, shows shows such Date and and My My not not Our Our Perfect is is as as
the the bouquet. bouquet. available available basic basic in in Instead, Instead, Wethu Wethu channel channel called Mzansi Mzansi a a
the the the the provided provided bouquet, which basic basic in in is is would would usually previous previous show show
of of popular popular these these shows. shows. sport sport Therefore, Therefore, to latest and and seasons seasons access access
have have content content to to premium premium Thus Thus series, series, be be consumers consumers more. more. pay pay can can
what what identified identified considering by by content content broadcaster broadcaster the the subscription -TV -TV
avails avails classifies classifies and and premium premium -end -end bouquets only. as as upper upper on on
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62 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Based Based Authority Authority of 5.7.17 5.7.17 the the the definition above above premium premium proposes proposes on on a a
: that : content content valuable valuable acquired acquired exclusive basis basis and is is content content on on an an as as
made made premium premium bouquets. available available high high end, on on
blockbuster blockbuster latest latest 5.7.18 5.7.18 In this regard, live live movies, and and local local sport, sport,
thought thought of international international generally generally series series content content premium premium are are as as
;:lpitt ;:lpitt . . 4 f O C ID O . rt. S at a S o Y1` a O M. ° 3 oy `ti 1 7 m el ri Yi ,w !" iI1 o Ó 1 3 3 G h01 AI 0 Ñ 9 . . 51' 2. * O ? np re o C E C A ÓI , 0 //_ Y Q! 3 C 3 .. O S C S o goy
a,O :.7. 0 .7 Ó 3 fxxG i a w '4C
5.7.19 5.7.19 the the differences prices prices Given Given in and and -tier -tier for for the the premium bouquets, bouquets, basic basic
from from the the differences emanating emanating -premium -premium premium premium in in versus versus non non
that that it it unlikely unlikely subscriber subscriber is is
content content to to premium premium bouquet would would a a a a
bouquet bouquet consider consider basic basic and and
tier tier substitute substitute vice vice as as versa. versa. a a a
5.7.20 5.7.20 advertiser's From From the the of within within perspective, perspective, to to which which channel channel choice choice an an
place place that that for for advert advert of particular profile profile the the viewers depends depends on on an an
channel. channel. channels -tier -tier targeted targeted at the the lower usually usually viewers Basic Basic in in are are
living living standards (LSM) (LSM) the the categories, categories, applies. applies. and and converse converse measure measure
It It
luxury luxury unlikely unlikely goods goods is is that that target target the the advertiser advertiser market whose whose is is a a
substitutable substitutable would would find LSMs LSMs tier tier with with premium premium channels channels basic basic upper upper
channels. channels.
Insofar Insofar market market the the geographic geographic definition definition concerned, concerned, broadcasters is is as as
national national licensed licensed basis, basis,
there there although although within South South Africa are are are are on on a a
community community Rights Rights for for to to content specific specific given given licensees. licensees. based based also are are
limited limited national national usually usually geographical geographical boundaries. Thus, to to we we areas, areas,
the the market market geographic geographic South South Africa. view view being being as as
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 63
Authority Authority 5.7.22 5.7.22 the the the the following relevant markets above, above, Given Given proposes proposes
at at the retail level: level:
(a)a (a)a of of market market for the the retail subscription television supply supply services services in in
divided divided South South Africa, which which be be into into can can
of of (i) (i) market market for the the subscription retail retail supply -tv -tv premium premium a a
Africa; Africa; channels channels South South and and in in
of of (ii) (ii) for market market the the retail supply subscription subscription basic basic -tier -tier -tv -tv a a
South South Africa. channels channels in in
web web
Os Os Wogsawes Wogsawes asOmoiReft asOmoiReft with with Authority's Authority's the the NIL NIL Q8. Q8.
Do Do of of the retail retail characterisation characterisation II II you you agree
iimileftliftimimeibil iimileftliftimimeibil
umosatOmgailbsewiPliriáity umosatOmgailbsewiPliriáity definition definition market market the market If If and and outlined outlined would would not, not, how above? above?
as as
"NW "NW
/s /s this this the the relevant market define define regard? regard? in in
ou ou
v v
wholesale wholesale markets: 5.8 5.8 Upstream Channel Channel provision provision
retail retail market there market market the comprising comprising wholesale wholesale is is e e a a
and and of of television content into tion tion packaging packaging channels. The
defines defines
programming programming defined defined single single `channel' `channel' sting sting Act 'a as as a a
of of other other programming programming ervice ervice demand than than video video licensee licensee on on a a a a
ervice'. ervice'. 4(3) 4(3) of the the Broadcasting Broadcasting Act mandates Section Section ICASA ICASA to to
application application uthorise uthorise additional channel, channel, licensed licensed by by any any upon upon a a
that that of of than than roadcasting roadcasting service channel. channel. consists consists more more one one
hannel hannel packaging either either vertically -house -house done done by by be be in in can can a a
tegrated tegrated independent independent broadcaster broadcaster producer, producer, 39 39 channel channel such such by by or or an an
for for Discovery Discovery broadcasters. The wholesale wholesale supply Channel, Channel, to to s s
supply supply holesale holesale of of television television involves involves bargaining between channels channels
for for the the the conditions conditions roadcasters roadcasters providers channel channel and and and and terms terms on on
distribution distribution of television television viewers. viewers. channels channels to to
whether whether substitution substitution perspective perspective the question demand demand side side From From is is a a
their their of of behalf behalf broadcasters, broadcasters, would would consider two two viewers, viewers, or or more more on on
substitutes. substitutes. the the channels channels Whilst channels in in
same same as as may may genre genre
39 39 and and etv's etv's hour hour Instance, Instance, SABC's SABC's 24 24
broadcast broadcast the the chann chann atf Multich Multich For For DStv DStv Is Is on on p are are rm rm news news s s 59 59
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64 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
for for documentary documentary other, other, instance, instance, against against channels channels each each compete compete such such
lifestyle lifestyle Animal Animal competing Nat Nat channels Wild Wild and Geo Geo Plane!: Plane!: such such or or as as
Entertainment Entertainment highly highly unlikely and and Spice Spice TV also E! E! it it competing, competing, is is as as
that that documentary documentary channel, channel, would would SSNIP SSNIP lead lead to to switching by by on on a a a a
for for broadcasters broadcasters movie channel, to to instance. instance. a a
for for /bouquets /bouquets television television the 5.8.4 5.8.4 demand demand channels channels level level The The at at retail driven driven is is
of of the the channel. channel. shown shown by by each each content content type type Similarly, channel channel in in
providers providers would supply broadcasters broadcasters channels channels of of the the to to basis basis on on
whether whether premium premium Thus Thus demand channels channels such such content content not. not.
carry carry or or - -
substitution substitution the reflection reflection wholesale wholesale side side level level of of at at demand demand -side -side is is a a
substitution substitution the retail level. level. at at
5.8.5 5.8.5 What also also important important the the to to at consider consider wholesale demand demand level level side side is is is
substitution substitution advertisers advertisers channel channel by by because because television television producers producers use use
typically typically content content to to including including produce produce channels, by by or or programmes programmes
advertising, advertising, promotional and and presentational presentational material alongside alongside the
television television Therefore, channels channels might might content. content. regarded regarded being being be be in in as as
if if relevant relevant market the of of advertising the the cost cost rise rise in in same same a a one one on on
advertisers advertisers would would switch lead lead to to to advertising the the other. on on
5.8.6 5.8.6 supply supply -side From From for for substitutability substitutability the the test whether whether perspective perspective is is a a
attract attract of of of other the the will will suppliers increase increase price channel channel in in an an a a
providers providers channels. channels. Channel of of to to certain type tend tend specialize specialize in in
It It that that the the event of therefore therefore content. content. unlikely hypothetical hypothetical in in is is a a
monopolist monopolist increasing increasing there there immediate switch. switch. prices prices will be be an an
5.8.7 5.8.7 to to the Commission, Commission, According According European European
wholesale wholesale "The "The of of far far film film price price acquiring acquiring and channels channels is is also sports sports
higher higher than than of of that that other other small small channels: channels: increases increases in in permanent permanent
relative relative profitable. figures figures prices prices have the Taking Taking been been most most
for for list list (rate (rate from from favourable favourable price price card) BSkyB's BSkyB's wholesale to to BSkyB BSkyB
of of supply supply the the channels channels the the cable cable its its operators, operators, cost to to to to cable cable a a
of of film film acquiring acquiring least single single channel at at sport sport operator operator is is or or seven seven a a
much much the the most most times times expensive expensive Sky basic basic channel. This This as as as as
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 65
the the wholesale wholesale th th of of at at film film demonstrat demonstrat sports sports supply supply channels channels and and es es
arket." arket." forms forms
arat arat m m sep sep e e a a
the the Authority Flowing Flowing ab ab he he t t 5.8.8 5.8.8 from from the following inclined inclined is is to to ov ov e e propose propose
level: level: who who ale ale les les markets markets at the
market market
(a) (a) th fo fo holesale holesale -tier -tier -tv of of subscription subscription suppl suppl basic r r y y w w e e a a
frica; frica; th th and and Sou Sou channels channels A A in in
(b)a (b)a
th th fo fo holesale -tier -tier market market of of premium subscription subscription suppl suppl -tv -tv r r y y w w e e
frica. frica. Sou Sou channels channels th A A in in
with with
the the Q9. Q9. Do Do Authority's Authority's characterisation characterisation
of of the you you agree
wOWsirwritriii% wOWsirwritriii%
il.e il.e market market wholesale wholesale If If the the market definition outlined outlined above? above? and and
not, not, um um as as
Yawi Yawi
eifit. eifit.
wMlr wMlr would would how how /s /s this this the the relevant market define define regard? regard? in in you you
the the What What of of the the bargaining is is Q1O. Q1O. nature nature independent between between
power power
wholesale wholesale channel channel suppliers suppliers broadcasters? broadcasters? and and the the How How has nature nature
o o
this this time? time? changed changed power power over
lesale lesale who who Upstream Upstream 5.9 5.9 Con Con tent tent provision provision
market market 5.9.1 5.9.1 Above Above who who lesal lesal first first for for there there the the the provision provision chan chan level nel nel is is e e
of of the the involving value value depicted above above Figure Figure chain chain in in content content 4 4 as as
production. production. internally, internally, acquisition acquisition Television Television produced produced be be content content or or can can
third third
through through from from independent independent producers commissioned commissioned purchased purchased or or - -
internationally, internationally, party party content rights holders holders locally such such sport sport or or as as
other other television movie movie bodies, bodies, houses houses and and content content creators. creators. programme programme
for for the of of Broadcasters Broadcasters purchase channel channel producers content content compete compete or or
third third definition definition from from the the parties. parties. acquired acquired market market at upstream upstream such, such, As As
provider's provider's from from the the broadcaster's approached approached channel channel level level is is or or
perspective. perspective.
that that whether whether 5.9.2 5.9.2 this this regard regard arises arises The The in in of of two two types question question is is or or more more
substitutable substitutable satisfy satisfy typical broadcaster's will will and and content content demand demand are are a a
particularly particularly equally. equally. This This is is the the paramount paramount subscription subscription television in in
broadcasting broadcasting where where
for for the the content content driving driving force. In order is is space space a a
subscribe subscribe that that there there viewer viewer to certain certain to to service, service, value be be is is must must a a a a
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66 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Its Its the the document document defining relevant markets the the media media sector40, sector40, in in EC EC
for for of identifies identifies markets the subscription subscription wholesale wholesale supply premium premium TV TV
for for of of content content the the film markets markets supply supply channels channels and and wholesale premium premium
other other sport sport rights, broadcasting broadcasting markets. and and among among
the the In In the /Channel /Channel 5.9.8 5.9.8 Broadcasting Broadcasting decision, Viacom Viacom noted 5 5 Commission Commission
of of (i) (ii) (ii) films films considering considering its its previous approach sport sport premium premium events, events,
(iii) (iii) other other documentaries, documentaries, youth (such (such and and TV TV content content as as programmes, programmes,
markets41. markets41. etc.) etc.) separate separate product the Corp/ Corp/ BSkyB42 BSkyB42 In In News News EC EC as as
that that majority majority distributors distributors of of found found that that content content consider consider also also a a a a
distinction distinction premium premium audio- audio- should should drawn between and and be be -premium -premium non non
similar similar distinction distinction visual visual between between A A -premium -premium premium premium content. content. and and non non
British British made made /Open43. /Open43. in in is is Interactive Interactive content content Broadcasting Broadcasting
5.9.9 5.9.9 (a) (a) the characteristics Taking Taking into and and
of of premium premium account account non non - -
premium premium (b) (b) precedent precedent content content to to questionnaire; (c) (c) the case case responses responses
that that (d) (d) internal it it the the research, research, would would level level and and at at upstream upstream appear appear
for for the the of market market there there supply supply could could and and be be premium premium acquisition acquisition a a
market market for the the and and of of -premium -premium content content supply supply acquisition acquisition and and non non a a
content. content.
that that 5.9.10 5.9.10 question question The The whether whether next next premium premium content arises arises all all is is is is
substitutable substitutable similarly, similarly, whether and and -premium -premium content all all is is non non
substitutable. substitutable. the the the the preceding preceding discussion, From From and based cases cases on on
there there considered considered above, of of further -dividing -dividing premium possibility possibility sub sub is is a a
content content films into into various categories, including premium premium sport, sport,
other other premium premium content. and and
order order determine determine
the the of to to this, broadcaster 5.9.11 5.9.11 In consider consider likelihood we we a a
channel channel producer44 producer44 for for substituting substituting premium premium premium movies movies sport sport or or
It It the the of of of unlikely the the premium increase increase in in in in is is event event cost cost sport. an an
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oa//:dlly oa//:dlly odoma odoma lpd lpd 1 1 1a;doy 1a;doy o/sluawnoop/olpaw/slo;oas/uoly;adwoo/na o/sluawnoop/olpaw/slo;oas/uoly;adwoo/na IouyToa' IouyToa'
9BZLW/dwo0 9BZLW/dwo0 it it aso0 aso0 /w000lq /w000lq 6ugsoopaalg 6ugsoopaalg Iauuoy0 Iauuoy0 oN oN - -
S S
lo lo amp amp ¢, ¢, ON ON algollono algollono /d1o0 /d1o0 snnaN-Z£6S'W/dWOO snnaN-Z£6S'W/dWOO gAlsg gAlsg
Z£6Sw/suolsloap/sasoo/s1a61aw/uoylladwoo/naodolnaoa//:dNy Z£6Sw/suolsloap/sasoo/s1a61aw/uoylladwoo/naodolnaoa//:dNy 01£0Z-IZZ1010Z 01£0Z-IZZ1010Z 6S1fl091 6S1fl091 1pdN3 1pdN3
6£9'9£/AI 6£9'9£/AI 1' 1' woo woo Io6aI/naodolnaxavIna//:d;lu;o Io6aI/naodolnaxavIna//:d;lu;o 451414 451414 anyoola;W anyoola;W algonono uadp/6ulsoopoolg uadp/6ulsoopoolg
N3=wo4If N3=wo4If 18L0a6661£=X3130=ung/304/1X1/N3/1ualuoo 18L0a6661£=X3130=ung/304/1X1/N3/1ualuoo
a4l a4l puowap puowap puo puo s,laonpold s,laonpold sloal;al sloal;al loyl loyl puowap puowap pulw pulw lauuoyo lauuoyo 101a;soopoolg 101a;soopoolg 6uuoag 6uuoag ul ul D D s1amaln s1amaln 10l 10l slaslllanpD slaslllanpD
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 67
that that should should for for of of hypothetical hypothetical rights, rights, Premier Premier Soccer Soccer League League owner owner a a
the the broadcaster broadcaster instance, instance, increase would would 10% 10% prices prices by by turn turn to to a a
purchase purchase
rights rights substitute, things of of movie movie equal. This being being all all as as a a
that that fact fact of attracted attracted the the type to to the audience audience movie channel to to owes owes a a
attracted attracted not not the the the necessarily necessarily channel. channel. is is sport sport to to same same one one as as a a
of of 5.9.12 5.9.12 order order Advertisers Advertisers viewers consider consider the profile also also place in in to to an an
particular particular advert advert dominated dominated likely likely channel. channel. channel channel male male is is A A sport sport on on a a
adverts adverts
attract attract of of particular particular targeted targeted to to males males and and LSM LSM at at age, age, race a a
it it for for advert advert immaterial immaterial grouping. grouping. gender- neutral However, However, be be in may may a a
which which if if advertise advertise thus the the numbers the making making channel channel to to same, same, are are
of of other distinction distinction the the between between types channels. channels. Viewers hand hand no no on
for for substitute substitute not not necessarily necessarily regard live would would sport sport to to movies, as as a a
instance. instance.
of of other other 5.9.13 5.9.13 Furthermore, the characteristics premium premium movies, movies, and and sport sport
differ. differ. longer longer shelf instance, instance, movies have have much much life For For also also content content a a
that that time time for for -bound -bound windows, specific specific whereas sold sold and and in in reason reason are are
other other sporting sporting the perishable perishable value live live hand hand and and lose lose events events are are on on
further further faster faster the the Thus, Thus, much much event event is is over. over. once once a a propose propose we we
that that distinction, distinction, between between of of premium premium content, distinguishing types types is, is,
feature feature films films including including between between and and live live live and and sport, sport, movies; movies; series series
cricket cricket rugby, rugby, and and other. other. the the matches matches PSL PSL soccer soccer on on
it it culture, culture, 5.9.14 5.9.14 nation's nation's preferences preferences live live When When and and to to tastes sport, sport, comes comes a a
determine determine what constitutes constitutes premium sport. rugby, rugby, In In South Africa live
cricket cricket the matches matches regarded and and top top three sporting PSL PSL soccer soccer are as as
following following television. with with offered exclusive exclusive large large codes codes and basis basis on on on on a a
Therefore, Therefore, the the three sporting premium viewed viewed codes codes be be can can as as
content45. content45. differ differ cricket cricket rugby rugby However, However, live also also and and in in terms terms soccer, soccer,
of of of of followers. followers. cricket characteristics characteristics the profile Rugby Rugby have and and and
traditionally traditionally following following from the white having having large been been seen seen as as a a
followers46. followers46. other other community community whilst the the black black hand hand has has
more more soccer soccer on on
45 45
/ /
available available and and /www.south- /www.south- ofrico- the the of Africa at ),tto 'Top 'Top South South
tours tours Ten" Ten" The The "Big sports, 3" 3" -and -and : :
trovel.com trovel.com africa- /sou /sou soorts.html soorts.html th- th-
divided divided available African African by by at sport sport South South still still 46 46 race. race.
/ / /www.theguardian.com /www.theguardian.com /world divided divided /southafrica- /southafrica- /2013/jan/21 /2013/jan/21 https: https: sport- sport- -race -race
/ / Africa', Africa', /www.safarinow.com /www.safarinow.com also also 'Sport https: South South See See in in -africa -africa /cros /cros /sport /irie.aspx /irie.aspx south south -in- -in-
64 64
CASA CASA I I
This gazette is also available free online at www.gpwonline.co.za
68 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
unlikely unlikely broadcaster broadcaster Thus, Thus, for for substitute substitute rugby rugby cricket. to to is is a a or or soccer soccer
markets markets for rugby, cricket Therefore Therefore and and separate separate propose propose soccer, soccer, we we
other other sport. sport.
substitution substitution 5.9.15 5.9.15 supply supply of of content content perspective, perspective, creators side side From From a a are are
entities entities with with specific specific specialised specialised focus focus movies, movies, such such a a areas, areas, on on as as
rugby, rugby, cricket, lifestyle soapies, soapies, and and others. others. magazines magazines soccer, soccer,
of of Substitution Substitution from another another focus focus to to at would would added added area area one one come an an
reasonable reasonable would would happen and and timeframe, timeframe, within within thus thus not not cost cost a a
confirming confirming markets markets for for other other sport sport premium premium separate separate movies, movies, and and
content. content.
Insofar Insofar 5.9.16 5.9.16 the geographical geographical boundary of of market market the the concerned, concerned, is is as as
from from anywhere the sourced sourced be be content content world. world. However, most in in in in can can
rights rights instances instances such such
for for content content granted granted specific specific acquired acquired and and are are a a
usually usually national geographical geographical basis. basis.
respondents respondents indicated All All area, area, on on a a
that that their their their their primary primary market market with with geographical geographical South Africa, line line is is in in
although although MultiChoice MultiChoice licences, licences, that that it stated stated with also also competes competes
international international players. players.
5.9.17 5.9.17 -premium -premium usually usually bundled content content with with premium content Non Non in in is is up up
order order for for to to offering. bouquet bouquet retail create create package package For For our our or or a a
it it consider consider is is -premium -premium whether whether to to not not all all necessary necessary purposes purposes non non
substitutable substitutable content content at at this from from demand demand side, side, is is stage. stage. a a
Authority Authority preliminary preliminary the the 5.9.18 5.9.18 the the above, above, considered considered Having Having proposes proposes as as a a
that that the the distinguished: distinguished: following following relevant markets view view be be can can
first- first- of of market market for the window window subscription acquisition acquisition television television (a) (a) a a
for for distribution distribution retail retail broadcasting broadcasting premium movies movies South in in Africa; Africa;
for for the for of of market market premium premium acquisition acquisition live live matches (b) (b) soccer soccer a a
distribution distribution retail retail television Africa; South South in in
for for of of market market the the acquisition premium rugby rugby matches live live for for (c) (c) a a
distribution distribution retail retail television South South Africa; in in
for for the of of market market premium premium acquisition acquisition matches matches live live for for cricket cricket a a (d) (d)
distribution distribution retail retail television Africa; South South in in
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 69
market market premium47 premium47 for for for for of of other content content retail retail the the acquisition a a (e) (e)
television television distribution distribution Africa; Africa; South South and and in in
market market
for for for of of -premium -premium content the the acquisition retail a a (f) (f) non non
distribution distribution television television South South Africa. Africa. in in
Illeggegareavollatil Illeggegareavollatil
VOL VOL
illem illem Q11. Q11.
with with Authority's Authority's the the
Do Do
characterisation characterisation
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of of the marke marke you you agree
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not, not, as as
you you
milimitisiMitallifile milimitisiMitallifile the the relevant define define this this market market regard? regard? in in ' '
hm hm T T 'ca 'ca 5.10 5.10 Serv'ces I I ec ec i i
subscription subscription The The of of television television 5.10.1 5.10.1 operation broadcasting broadcasting services differs
substantially substantially -air -air -to -to from from the the free free services services specific technical due due to to
infrastructure infrastructure that that to to required required only only authorized viewers ensure ensure access access
the the either either infrastructure infrastructure content. content. technical technical services services and and Such Such be be can can
provided provided third third parties parties -house -house include conditional by by and in in or or access access
capabilities capabilities including decryption decryption software, middleware encryption encryption and and
technologies technologies smart smart subscriber subscriber cards cards and such such management management services, services, as as
hardware hardware and and set- set- top -boxes. -boxes. such such as as
These These
entry entry barrier barrier constitute constitute they 5.10.2 5.10.2 impede impede services services to to or or can can can a a
for for of of inter -operability of competition, competition, there instance instance where lack lack is is
systems. systems.
Therefore Therefore Authority's Authority's the the initial view .3 .3 is is
of of acquisition acquisition wholesale wholesale provisio and and to to
7
operating operating ption ption television broadcas subsc subsc a a
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with with Authority's Authority's of the market market the the characterisation characterisation Q12. Q12.
you you agree agree : :
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If If the the market guipbaig guipbaig definition definition outlined outlined would would how how above? above? and and not, not, as as you you
seemlig seemlig *Maws *Maws immANCPs immANCPs Regemenft Regemenft this this the the relevant market define define regard? regard? in in
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_. _. 66 66
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70 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
CONSIDERATION CONSIDERATION 6. 6. THE THE EFFECTIVENESS OF OF IN IN COMPETITION COMPETITION OF OF
RELEVANT RELEVANT MARKETS
Overview Overview 6.1 6.1
of of 6.1.1 6.1.1 Competition the industrial refers refers in in inter inter -firm context context to to economics economics
for for rivalry rivalry contestation contestation market generally generally share. share. accepted accepted It It that that is is or or
there there through competition competition welfare welfare where where enhanced enhanced is is lower lower is is consumer consumer
of of wider wider quality products products prices, prices, choice choice constant constant innovation. and and
Regulatory Regulatory policy intended intended develop, and and law law to to promote promote and and is is preserve preserve
environment environment conducive conducive where where firms firms fairly. fairly. compete compete The The ideal ideal a a can can
of of perfect perfect there there entry, competition competition state state barriers exists exists where to to are are no no
there there suppliers suppliers buyers buyers and and of of that homogenous homogenous product is is many many are are a a
perfectly perfectly substitutable and and of of information the there there perfect flow in in is is
market, market, other things. things. Whilst Whilst perfect competition ideal ideal is is among among an an
market market structure, structure, most most markets barriers barriers to entry, characterised characterised by by are are
information information limited limited of of asymmetry, asymmetry, number of suppliers suppliers lack lack and and a a
of of which which all all of of symptomatic symptomatic market failure. innovation, innovation, Economic Economic are are
failure failure regulation regulation applied applied in in of of market order order mimic mimic instances instances to to in in is is
competition. competition.
6.1.2 6.1.2 of of effectiveness effectiveness The The
market market the the competition competition influenced influenced by by be be in in can can a a
of of the the structure structure market. market. instance, instance, oligopolistic highly and and For For
concentrated concentrated markets generally exhibit exhibit not not effective effective competition. do do
conduct- conduct- performance The The that that structure- structure- structure structure paradigm paradigm the the posits posits
of of market market influences influences that that the the of firms market, market, affects affects conduct in in a a or or
their their determines determines which which turn turn of market market performance. performance. features The The in in a a
of of of competition. competition. determination determination integral integral to the effectiveness The The are are a a
of of firms, the whether there of market conduct conduct of of exercise in in is is any any sense sense
whether whether competition the the market determining determining assists assists also also in in in in is is power, power,
effective effective not. not. or or
6.1.3 6.1.3 that that 67(4) 67(4) of In In with with ineffective competition the dealing dealing requires requires ECA ECA
the the Authority inquiry inquiry there there the relevant defining defining assist assist be be in in to to must must an an
market market market where where sufficient sufficient appropriate appropriate segments segments and and
or or pro pro - -
conditions conditions those those imposed imposed licence licence licensees competitive competitive to to be be are are on on
significant significant market found found have have to to power. power. 67 67
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 71
of of 6.1.4 6.1.4 67(4A) 67(4A) the the followed followed provides provides should should Section Section be be ECA ECA that that guide guide a a
determination determination of of regarding regarding the effectiveness making making when when a a
relevant relevant market. competition competition in in It It that that states states a a - -
competition48 competition48 "(4A) "(4A) determining determining whether When When effective effective there there is is
market market markets markets and and in in Authority Authority must must segments, segments, the consider, consider,
other other things things among among - -
-transitory -transitory regulatory) regulatory) (structural, (structural, (a) (a) and and the the legal, legal, entry entry non non
markets markets barriers barriers and and the the applicable to to market market segments; segments; or or
of of (b) (b) markets markets functioning functioning dynamic dynamic character the the and the market market or or
of of market market segments, segments, including share share the the of of relative relative assessment assessment an an
of of providers providers various various licensees licensees exempt exempt markets markets services services the the in in or or or or
market market forward forward and and of of relative relative looking looking assessment segments, segments, the the a a
of of market market the the licensees licensees market market markets markets the the in in power power segments. segments. or or
Authority Authority the the this this 6.1.5 6.1.5 section section out out In In sets sets - -
that that the the factors considers considers it it important important competition competition assessing assessing in in in in
the the identified markets market the television television and and segments segments in in
broadcasting broadcasting service sector; sector;
of of the the relevant features features markets markets that that market market segments segments have have and and
taken taken been been of of competition competition into into account those those its its in in in in assessment assessment
market market markets markets and and segments; segments; and and
preliminary preliminary of of of competition competition the the effectiveness the assessment assessment its its in in
market market identified identified markets and and segments. segments.
Approach Approach 6.2 6.2 Proposed
of of determination determination 6.2.1 6.2.1 In making regarding regarding the effectiveness competition competition in in a a
that that Authority Authority relevant relevant markets the following factors the the the proposes proposes
should should assessed: assessed: be be
-transitory -transitory barriers barriers Non Non to to entry
of of character character functioning the market dynamic dynamic (including The The and and
market market concentration concentration and and levels) levels) power power
of of the the nature market vertical vertical and and extent extent integration integration the in in
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72 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
whether whether competition with with the alone alone will law law deal deal be be sufficient sufficient to
identified identified market market failure.
with with Authority's Authority's the the the the proposal proposal above above Q14. Q14. Do Do to to you you agree use use
determining determining the effectiveness effectiveness in in of of competition? competition? actors actors Please Please
substantiate substantiate your your answer answer
view, view, In In there there there there competition competition and and is is Q15. Q15. your your
any any concerns concerns are are
a a
regulatory regulatory intervention for for for of of the the market the the acquisition need need in in
-premium -premium content? content? non non
wholesale wholesale for for for for the the Market Market Markets Markets Upstream Upstream 6.3 6.3 content: content:
of of Acquisition Acquisition First First Premium Premium Live Live Rugby, Cricket, Cricket, Soccer, Soccer, -run -run
Subscription Subscription for for other other Premium Premium Retail Retail Movies Movies and TV TV Content Content
49 49 Distribution Distribution Africa Africa South South in in
In In (6) (6) the the Authority 6.3.1 6.3.1 markets markets define define six section section 5.10 above, proposed to to
level. level. of of for for at at the purely purely upstream upstream convenience convenience However, However, in in purposes purposes
the the effectiveness effectiveness of of determining determining competition, markets these these will will be be
assessed assessed
for for together together market market the the of premium acquisition acquisition content. as as a a
Scarcity Scarcity of of to to Barriers Barriers Entry: Entry: Premium Premium Content and and Cost
entry entry 6.3.2 6.3.2 market major major barrier to the the the into into supply The The and and for for upstream upstream
of of of of premium premium acquisition acquisition content content the the scarcity to to premium premium be be appears appears
the the content. content. Whilst Multichoice Multichoice its its in in to to questionnaire response response says says
there there barriers barriers it it the the entry entry into into -visual market, to to broader audio audio are are no no
its its annual concedes concedes report50 report50 in in for for that that sport sport rights instance, instance, have have
increasingly increasingly expensive become become that that hotly hotly contested. contested. Telkom notes and and
that that the the monopoly monopoly
for for time time position position enjoyed enjoyed Multichoice Multichoice long long by by was was a a
that that it it forges forges ensured ensured long long has has term, term, relationships relationships with with exclusive exclusive
suppliers, suppliers, making it it difficult for for content content entrants entrants to make make new new
substantive substantive market. inroads inroads the into into
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2014,"&t299._ 2014,"&t299._ ere ere /DnEfl /DnEfl ;aoYfnfaadsloublicalion.odf ;aoYfnfaadsloublicalion.odf / / es/ es/ 11Z 11Z assets assets D D C C k k common common
This gazette is also available free online at www.gpwonline.co.za
STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 73
of of of of 6.3.3 6.3.3 points points capital capital levels levels The The high levels SABC SABC investment, investment, to to high high
transitioning transitioning investment, investment, market saturation operational operational delays delays and and to to in in
the the regulatory barriers wherein the only only calls calls DTT. DTT. Authority Authority e.tv e.tv notes notes
for for the the applications applications intervals. points points licence licence Siyaya and and to to at at cost cost
of of the the premium premium scarcity scarcity barriers major major entry content content to to in in as as
subscription subscription television market. market. broadcast broadcast broadcasting broadcasting lost lost e.tv e.tv rights rights to
the the the the prohibitive Champions Champions League League citing citing 2015, 2015, of the costs costs in in UEFA UEFA
rightsS1. rightsS1. rights rights 2007, 2007, the lost lost exclusive SABC SABC In In to to the Premier Premier its its local local
Soccer Soccer deal deal (PSL) (PSL) to to worth In SuperSport, SuperSport, billion. League League R1.6 R1.6 in in a a
August August SuperSport SuperSport billion further further contract contract to to 2011, 2011, its its paid paid R2 R2 a a renew renew
for for with with another another the the 2012/13 2012/13 started started the the five five which which in in PSL PSL years years
season52. season52. therefore therefore scarcity scarcity of The The and and content content the premium premium fierce fierce
for for competition competition it driving driving and and pushing reach reach is is it it for for of of out out its its cost up up
there there Furthermore, Furthermore, substantial entrants entrants involved involved sunk sunk costs costs in in new new are are
setting setting subscription subscription broadcasting
television television service and and new new up up a a
marketing marketing potential potential subscribers. subscribers. it it to
also also threat threat of entrants entrants 6.3.4 6.3.4 with strategic to to the the contend contend have have New New a a
competitive competitive incumbent, incumbent, undercut from from who who or or response response can can an an
introduce introduce that that with with entrant. offerings offerings compete compete new new new new a a
Barriers Barriers Exclusive Exclusive to to -term -term Contracts Contracts Entry: Entry: Long Long
6.3.5 6.3.5 the high high content content Apart Apart from premium premium usually usually tied cost, cost, long long in in is is up up
that that for term term entrant content content exclusive exclusive contracts, meaning such such new new a a
would would of of then, then, not not until until the the readily readily available end end be be Even Even contract. contract.
there there
that that incumbent incumbent guarantee guarantee player will outbid the the is is at at new new no no an an a a
of of that next next the the competitive advantage round round exclusive exclusive bidding bidding due due to to
content content the the figure depicted depicted below where bestows bestows holder. This in in 6 6 is is on on
of of the the vicious with the acquisition cycle, cycle, begins premium premium content on on an an
for for stipulated stipulated frame. exclusive exclusive Exclusive Exclusive basis basis time time content content premium premium a a
of of attracts attracts thereby thereby the the broadcaster's viewers viewers increasing increasing chances chances more more
prefer prefer rights rights premium premium acquiring acquiring holders holders content content to to would would more more even even as as
with with established established broadcaster sell sell
to to growing growing established established and and an an an an
51 51 eiv eiv lo lo champions champions League League SuperSport SuperSport rights rights TimesLive. TimesLive. loses loses
/ / /soccer /soccer http: http: /www.timesiive.co.za /sport /2015/05/26/e.ty- /2015/05/26/e.ty- Champions -League -righ -righ loses- loses- -to- -to- SuperSport SuperSport is is
52 52 / / /www.kickaff.com/ /www.kickaff.com/ http: http: 237ól 237ól /supersport- -rights -rights / / biilian- biilian- tar -psl -psl r2- r2- pay- pay- news news
70 70 (CASA (CASA
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74 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Consulting53 Consulting53 Source: Source: Windsor Place Place
6.3.6 6.3.6 the the Subscription Subscription In In Broadcasting Broadcasting 2005 2005 Position Position Paper its its Services54 Services54 on on
that that ability ability Authority Authority subscription subscription the the broadcasting broadcasting expressed expressed view of of a a
content content fundamental fundamental the the exclusive exclusive services services acquire basis basis to to to to is is an an on on
of of that of forms forms provision provision these these services exclusive and and contracts contracts some some
efficient. efficient. this to not not desirable desirable construed However, However, should should and and be be are are
that that efficient efficient time. time. exclusivity exclusivity the the Exclusivity Exclusivity desirable desirable and and all all is is mean mean
limit limit competition competition create create challenges and and such as: as: can can
that that driving driving the the prices prices due locked locked of of scarcity scarcity content to to is is up; up; up up
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Reg Reg costa costa
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pt pt la la pí952/ pí952/ le le lTngf lTngf 48/ 48/ DetoU DetoU biSl/509!c. biSl/509!c. 141.5/r?LidL! 141.5/r?LidL! Itlz Itlz
rr rr il.as il.as
2rT 2rT ox ox I I 71 71
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 75
limited limited exclusive exclusive to to afford afford the by by those who content content cannot cannot access access
service; service;
barrier barrier entry; entry; to to creating creating and and a a
dominant dominant the market. market. reinforcing reinforcing the player's player's position in in
Armstrong5S, Armstrong5S, without without 6.3.7 6.3.7 regulatory exclusivity to to According According constraints, constraints, is is
likely likely outcome. outcome. a a
Incumbency Incumbency of of Relationships Relationships Special Special
of of 6.3.8 6.3.8 Incumbent take take advantage of establish establish lack lack competition competition to operators operators
with with strong strong relationships suppliers, suppliers, advertisers viewers. viewers. and and even even
advertisers advertisers Content Content suppliers would would business business and and do do want want to with with an an
than than established established operator operator entrant. advertiser, advertiser, For For new new a a an an an an
larger larger broadcaster broadcaster established established usually usually base base has has
of of than subscribers subscribers a a a a
therefore therefore and and entrant entrant the the advert. Similarly, to to eyeballs eyeballs more more new new see see
for for that that content content there broadcaster broadcaster producers producers established established is is an an ensures ensures
their their entrant's entrant's than than subscriber broader broader base. base. content content to to new new access access a a
Deutsche Deutsche Telekom Telekom 6.3.9 6.3.9 In it recognised recognised that that incumbent incumbent where where has has was was an an
strong strong with certain constituencies constituencies links links key key advertisers advertisers like like these can can
barriers barriers the and and that: that: entry entry court court present present to held held
of of have have hope hope acquiring acquiring "To "To broadcasting broadcasting have have rights, rights, it vital vital to is is any any
of of the the form form viewers viewers established established subscriber base since since to to in in access access an an
rightholders rightholders usually usually their their product distributed distributed want want to to [A] widely.... widely.... see see
considerable considerable would would financial financial risk by concluding output output comer comer run run a new new
have have deals deals he since since would would guarantee guarantee subscriber subscriber base, base, minimum minimum to to a a
whether whether without without knowing knowing figure56" figure56" guaranteed guaranteed he he the achieve achieve could could
of of the the in in h h b to to entry entry riers riers o o e o o v N
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76 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
the the of of Functioning Functioning Market Market Dynamic Dynamic Character and and
determining determining of of of the the 6.3.10 6.3.10 competition effectiiveness effectiiveness by by assessing One One is is way way
of of the the the market. level level of of concentration concentration concentration levels levels High High in in
indicative indicative usually usually of of competition competition Table Table below vice vice and and less less 1 1 -versa. -versa. are are
of of the the lists lists and and current current content content rights rights categories categories holders holders South South Africa. in in
Authority Authority The The of of this this intends intends the the approach approach to using using level assess assess
the the that that concentration concentration upstream upstream market, noting this this list incomplete in in is is
this this at at stage. stage.
RIGHTS57, RIGHTS57, 58 58 1: 1: TABLE TABLE KEY KEY MOVIE MOVIE AND AND SPORTS SPORTS
Content Content Category Category Rights Rights Owner
Hollywood Hollywood Multichoice Movies Movies Movies Movies
South South Multichoice Multichoice African African Rugby Rugby Rugby
Union Union
Cricket Cricket Cricket Cricket South South Africa Multichoice Multichoice
Premier Premier Soccer Multichoice Soccer Soccer League League SA SA
l.. l..
Champions Champions Multichoice Multichoice Soccer Soccer League League UEFA UEFA
Multichoice Multichoice Soccer Soccer Spanish Spanish Liga Liga La La
English English Premier Premier Multichoice Soccer Soccer League League
Europa Europa League UEFA UEFA Muitichoice Muitichoice Soccer Soccer
German German Bundesliga StarTimes StarTimes Soccer Soccer
Soccer Soccer Siyaya Siyaya Bafana Bafana Bafana SAFA SAFA
- -
S S
6.3 6.3
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This gazette is also available free online at www.gpwonline.co.za 77
HHI, the not indicates high based A 070
number dynamic
purposes.
for the
in is
four -firm indicates
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Table proposal the higher between FOR market share We be in Market in to MARKET HHI 100% would irrelevant. 80% 10% 10% 1500 HHI depicted v market analysed market? Authority's of UGUSTUS UGUSTUS 2017 squared the a an of content HHI 25 A than example IN competition. indicative and be for as CONCENTRATION an the the less be concentration will content whereas premium 10 measure 8 1 1 the of of of rights an should of ratio is No functioning sum As on HHI 600 limited STAATSKOERANT, STAATSKOERANT, calculation59 premium concentration. comment concentration concentrated, of the of 6 An factors 1: acquisition of This gazette is also available free online at www.gpwonline.co.za unit moderate OF therefore Table is market. HHI LEVEL which owner and a own ACQUISITION other Kindly An on as wn Multichoice mes character rights 2: Rights Siyaya StarTi Total TABLE What Q18. of
78 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
and and Integration Integration of of Vertical Vertical Nature Nature Extent
integration integration 6.3.13 6.3.13 the the Vertical Vertical
by by refers refers to into into expansion expansion or or company company one one a a
the the supply supply chain. along along Riodan6° Riodan6° stages stages value Loertscher and and more more
vertical vertical integration "the "the define define of of organization organization successive successive as as processes processes
firm...', firm...', within within single single whereas whereas according Hovenkamp61 Hovenkamp61 to to vertical vertical a a
itself itself that that firm firm integration integration something something "occurs "occurs when could does does it it for for a a
market" market" otherwise otherwise the the procure procure on on
6.3.14 6.3.14 illustrates illustrates the the below below and and Figure Figure 7 7 of of extent extent vertical vertical integration nature nature
subscription subscription television broadcasters. by by Multichoice Multichoice be be As As is is seen, seen, can can
vertically vertically integrated the the value value chain, whereas along along entire entire StarSat StarSat is is
their their of of the the present present the last only only value chain. in in In In to stages stages responses responses
the the the the questionnaire regard regard themselves both both and and do do SABC SABC e.tv e.tv not not as as
they they vertically vertically integrated though though involved involved activities activities in in even even are some some
the the value chain. chain. along along
7: 7: VERTICAL VERTICAL FIG FIG INTEGRATION INTEGRATION IN IN -TV -TV SUBSCRIPTION SUBSCRIPTION
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 79
that that integratio integratio legitimate legitimate 6.3.15 6.3.15 Whilst ertical ertical business business model produces produces i i v v n n s s a a
nternal nternal benefits, benefits, such such is is of of efficiencies efficiencies economies economies i i and and econom econom s s scope, scope, a a
f f it it used used be be !so !so vertically vertically integrated to to competitors. A A rec rec can can ose o o a a
nt nt the the incumbe incumbe inc inc has has market market entive entive to position position leverage leverage its
downstr downstr for for market market to to upstream upstream gain gain in in content. content. earn earn er er pow pow an an
it it ently ently then then is is upstream upstream buyer exercise exercise Consequ Consequ i i to to us us power power es es
market market addition addition the the al al the the downstream downstream market, cycle cycle and and in in powe powe r r
seif- seif- reinforc to to erpetually. erpetually. continue continue e e s s p p
oimigerilhe1ogniveAffsM oimigerilhe1ogniveAffsM
Iliftemilift Iliftemilift the the eivelifteN eivelifteN consider consider and and Q19. Q19. Do Do nature nature extent avers* avers* integrati integrati of of vertical in in you you
n n
o o
subscription subscription television harm harm onagpialliftan onagpialliftan likely likely 461NiTir::.. 461NiTir::.. at at to to 16) 16) Ownw, competition? competition? elab elab Kindly Kindly CO CO o o e
answer. answer. your your 111111/11111ra 111111/11111ra
of of Competition Adequacy Adequacy Alone Alone Law Law
6.3.16 6.3.16 television television subscription subscription characterised characterised broadcasting broadcasting The The been been has has sector sector
the the Authority limited limited number of of players despite by by by attempts attempts various various a a
license license entrants. entrants. Apart from market to to the the well well enquiries enquiries new new as as as
and and competition competition acquisition acquisition South South Africa, law law in in in in mergers mergers powers, powers, as as
that that other other jurisdictions, remedy remedy applied applied breach breach is is to to post, post, is, is, many many ex ex a a
the the of of other other after after flexible flexible the the fact. the Sector Sector specific specific law law hand hand law law is is on on
normally normally conduct conduct before applied applied and and is is to to prevent certain certain ante, ante, ex ex a a
market market remedy remedy challenges. challenges. breach breach to structure structure occurs occurs or
It It
that that doubtful doubtful 6.3.17 6.3.17 law law is is competition competition the the produce produce desired desired its its own own on on can
of of market market determine what this this the the outcomes, outcomes, hence hence inquiry inquiry to to necessity necessity
the the challenges challenges and and what what the possible possible remedies could be be in in are are an an
that that instance instance where found it it competition ineffective. ineffective. is is is
OM OM wan wan MC! MC! De De 11*as 11*as Mtg Mtg
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fwffialiihmw fwffialiihmw content? content? aiagififfigV aiagififfigV m m 76 76
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80 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
for for of of Acquisition Acquisition -Premium -Premium Upstream Upstream Market: Market 6.4 6.4 the the Non Non
for for Distribution Distribution Content Content South South in in Africa Africa
of of schematic schematic depiction 6.4.1 6.4.1 the the broadcasting value The The chain chain 4 4 Figure Figure in in
that that indicates indicates broadcasters above above produce able able to to content in- in- some some are are
this this would would Those Those house. house. -premium -premium content. In In most instances instances be be non non
third third the the with with from capabilities capabilities such such content content parties. parties. Over acquire acquire no no
television television commercial commercial broadcasters broadcasters have have and and community community years, years,
the the broader managed managed enter enter to to television television broadcasting sector. sector.
-air -air free free television broadcasters Commercial Commercial and and -to -to community community pursue pursue
different different the the subscription subscription broadcasters, broadcasters, business business models to to including including
of of
offered. offered. Subscription broadcasters kind kind both need need content content non non - -
latter latter what what premium premium premium drives drives subscription and and The is is content. content.
for for often often commands services services exclusive acquired acquired basis basis and and and and is is on on an an
of of high high prices in in terms terms access. access.
Authority Authority 6.4.2 6.4.2 this this market barriers barriers high high The The not not to to entry. views views having as as
of of -premium -premium suppliers suppliers There There locally and and content content many many are are non non
internationally. internationally. free free subscription subscription television broadcasters Both Both and and -air -air -to -to
this this Vertical channel channel producers and and content content market. market. acquire acquire in in can can
integration integration here here does does not not to to to competition harm harm and and appear appear any any cause cause
for for there there regulatory such such need intervention. intervention. is is no no as as
for for Distribution Distribution of the the Downstream Downstream Market Retail Retail Premium 6.5 6.5 and and
Tier Tier Subscription Basic Basic Television Television Broadcasting Channels6 Channels6
Barriers Barriers Brand Brand to to Loyalty Loyalty Entry: Entry:
loyalty, loyalty, market 6.5.1 6.5.1 Viewers Viewers tend develop especially brand brand such such to to in in as as a a
there there where where subscription television South South Africa single single was was a a
for for difficult difficult time. time. break break broadcaster broadcaster find find long long New New it it entrants entrants to to may may a a
loyalty loyalty barrier. the the brand brand
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 81
Barriers Barriers to to Switching Entry: Entry: costs
6.5.2 6.5.2 interoperability of of switching switching high high The The lack box leads -top -top to set set costs. costs. A A
satellite satellite invested invested who who box and and dish has has -top -top set set views in in consumer consumer a a a a
that that switching switching sunk sunk these these when costs costs she she he he cannot cannot to to or or recover recover as as an an
factor factor of alternative alternative the the broadcaster. broadcaster. making making The The added hassle switch switch
the the switching switching exacerbates exacerbates high high costs. costs.
Barriers Barriers Entry: Entry: Bundling to to
of of 6.5.3 6.5.3 involves involves the selling selling Bundling Bundling good good primary primary conjunction conjunction service, service, in in a a or or
with with secondary secondary goods goods that that services services acquired be be or or or or more more one one can can
that that the the separately. separately. The The idea idea from from the benefits benefits convenience convenience is is consumer consumer
of of purchasing purchasing bundled bundled and and product product than the the buying buying cost cost saving a a
individual individual elements separately. it it In In the television broadcasting broadcasting sector, sector,
especially especially is is
for for offer offer not not broadcaster Europe, Europe, in in to to uncommon, uncommon, a a a a
for for primary primary example, example, subscription service service comprising service service of, of, TV TV a a
with with telephony telephony fixed fixed telephony, broadband broadband bundled bundled mobile and and
In In subscription subscription broadcasters services. services. obvious bundle bundle less less a a way, way,
content content with with premium premium channels channels movies such such basic and and sport sport as as
subscription subscription channels. channels.
The The it it that that tying tying 6.5.4 6.5.4 competition competition with bundling bundling main main and and is is may may concern concern
the the market, foreclose foreclose incentivising incentivising from from purchase purchase by by to to consumers consumers a a
that that other other firm firm of with with offers offers bundled bundled service service instead dealing good good or or a a
suppliers suppliers In In of of the the bundling bundling secondary secondary services. services. South Africa goods goods or or
of of the the take take form form offering discounted discounted data data services in in to to may may access access
subscribing subscribing television television addition addition to to service. service. a a
to to barriers barriers Barriers Barriers Regulatory Entry: Entry:
6.5.5 6.5.5 barriers barriers Regulatory Regulatory those those that that market market entry restrictions restrictions emanate emanate to to are are
from from policy policy regulations. broadcasters broadcasters government government instance, instance, need need For For or or
before before licensed licensed be be to to the the market. offering offering service service in in a a
Authority Authority 6.5.6 6.5.6 The The for for invitation invitation to to subscription subscription television apply apply issues issues an an
intervals. intervals. licences licences it it for for at at intervening not not In In the period period possible possible is is
potential potential entrants entrants enter the market. with with the to to However, However, spaced spaced even even
78 78 ICASA ICASA
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82 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Barriers Barriers Marketing Marketing Entry: Entry: to to costs costs
entrants entrants relative relative marketing marketing 6.5.7 6.5.7 incur incur subscribers, subscribers, high high New New attract attract costs costs to
of of to to existing existing players. First, First, needs needs entrant entrant to to its its raise raise awareness awareness new new a a
market market the the existing existing broadcaster already existence. existence. has has An An in in presence presence a a
and and that that strategy strategy of slightly slightly different marketing marketing will will its its be be to to new new a a
attract attract entrant. entrant. order order to might subscribers, subscribers, Second, Second, in in entrant entrant new new a a
offer offer have have of of to to incentives, free free installations decoders decoders such such and and as as
of of marketing marketing satellite satellite dishes dishes
part part strategy. strategy. existing existing Meanwhile, Meanwhile, an an as as a a
the the player player has has ability ability incentive incentive to to undercut the break break pricing and and -even -even
of of entrants' entrants' and and short- short- offerings offerings prepared prepared make make be be to to new new may may even even
losses losses term term market market order order to maintain maintain share. share. its its and and in in grow grow
to to of of Barriers Barriers capital capital Entry: Entry: Lack Lack
of of 6.5.8 6.5.8 the the the the cited cited capital Most Most
questionnaire questionnaire to to costs costs high high responses responses as as a a
barrier barrier the the broadcasting entry entry broadcaster broadcaster to to sector. sector. needs needs A A in in access access
purchase purchase the capital capital for for right right equipment equipment operating operating to to to and and pay pay
takes takes period period long long It It of of time for to to player player break break expenses. expenses. even, even, new new a a a
working working thus thus requiring large large of of amount amount absorb absorb the capital capital losses. losses. to to a a
barrier barrier become become Capital Capital
for for if entrant entrant entry entry insufficient it it to to is is new new can can a a a
capital capital when when firms firms available available certain to to only only is is or or to to at or or access access
preferential preferential
of of sustainability sustainability terms terms affect affect the conditions. conditions. This This and and can can a a
entrant. entrant. new new
the the of barriers barriers Kindly Kindly analysis analysis possible possible above above Q21. Q21. comment comment to to on on
the the retail of the other at at market. What level level entry entry to to entry barriers barriers are are
this this prevalent prevalent market? market? in in
character character Dynamic Dynamic functioning functioning of the the market and and
The The level of of the the market market 6.5.9 6.5.9 determined concentration concentration downstream be be at at can can
of of advertising advertising the the number subscribers, subscribers, subscription using using by by revenue revenue or or
79 79 (CASA (CASA
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83 o
height at
is the subscription by has 000 the MARKET co co 070 television targeted influenced given Deukom 4 figure 623.6 about 0.032 626 its HHI No. 41 results of the 2.3 RETAIL base has been However, 9 calculated. 9 This is since if has and 2016. At largely hand even subscriber the SUBSCRIPTION-TV and subscribers. StarTimes numbers, used that in other capture. are Africa, million63 be share
believes factors can be Multichoice's the subscriber for can South to level on Market 5.7 98.1% 0.18% 1.72% 100% were figures two one Deukom Authority reached 200 000 in THE UGUSTUS UGUSTUS 2017 that the population revenue case. use above 25 A reach since IN eyeballs 00064. subscribers the and will CONCENTRATION at the retail any 000 000 of change, the to market, shares advertising Authority years 700 000 810 000 in 60 No speaking 100 10 of managed Using numbers number 5 5 the market not STAATSKOERANT, STAATSKOERANT, the subscribers65. over The will German of or to around subscriber StarTimes This gazette is also available free online at www.gpwonline.co.za the OF structure following revenue. revenue dropped analysis growing LEVEL about Broadcaster the
Multichoice
3: 3
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TABLE fi III III
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84 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
WP
of of Integration Integration Vertical Vertical Extent Extent d d
discussed discussed integration integration 6.3.13 6.3.13 vertical section section and and has has in in A A
s s pros pros cons. cons.
crl in .1-1 1-. D
ertically ertically integrated player limit limit competition competition position position its its in in to to
use use can can
<
market. market. he he of of the the nature vertical vertical discussion discussion The The and and extent extent
on on
rh
6.3.13 6.3.13 integration integration this this section. section. section section applies in in to to
of of Competition Competition Alone Alone Adequacy Adequacy Law Law
6.5.12 6.5.12 the the historical trends Given Given it it that that doubtful doubtful competition this this market, is is in in
law law alone with with to to adequate adequate The The deal deal is is competition competition any any concerns.
the the discussion discussion of of integration integration vertical vertical nature nature and and in in extent extent section section on on
this this 6.3.16 6.3.16 to to section. section. applies applies
CONSIDERATION CONSIDERATION 7. 7. LICENSEES LICENSEES OF OF WITH WITH SIGNIFICANT MARKET MARKET
POWER POWER
this this Authority's Authority's initial initial 7.1.1 7.1.1 In regarding the the the section section discuss discuss views views we we
significant significant market identification identification with with of of proposed proposed licensees licensees the the in in power power
relevant relevant markets, (5) of the guided guided which which by by 67 67 section section ECA, ECA, as as
that that provides provides - -
market market market market significant significant licensee licensee has has in in "A "A market market power power a a or or
if if licensee licensee that that segment segment - -
dominant; dominant; is is (a) (a)
of of facility; facility; control control essential essential has has (b) (b) or or an an
that that vertical vertical relationship the the has has Authority Authority determines determines (c) (c) a a
competition" competition" harm harm could could
7.1.2 7.1.2 market has has been the the identify next next defined, defined, to step step players Once Once in in is is a a
that that their their market market calculate calculate identify identify market, market, those those shares shares players and and
who who have have of of significant significant market significant market The The concept concept power. power. 81 81
This gazette is also available free online at www.gpwonline.co.za 85
number N power has market the market players owners calculate relationship and as to appreciable firm a between concerned power. Authority. depicted and vertical w w in 070 countries firm of concerned 45% A dominant communications than 35% be used meaning suppliers. market No. 41 their significant upstream market a three Whilst the can of as of to of less the firm share an power. using available vertical other ability it and position share only of by of to the competition. se, be firm the significant or share preferred behave market concept the of in per and has unless content market market the within customers the a but circles. approach in currently a has concerns electronic market licensee power of rights as
that in that Africa, A to dominance dominant, it power be significant with is share. a premium or policy if harm indications proven content the list has market power from the A will the competition competitors, is South a competition licensees power. Once ECA market that market that the could that Authority different UGUSTUS UGUSTUS 2017 is presumes market be of exclusive having have in the information law and it in licensee content. stage 25 A market are acquisition can determines only things, defines more specifically of identify exclude competition its to there it significant raise as the not not this of if presumed 45% or or no any premium regarded other dominance sectors, independently is completed at Act 1, 45% premium not has competition. the to and and In terms concept than Authority Table indicate above, or Competition Act. does among is STAATSKOERANT, STAATSKOERANT, using general has has shares power. supply prices, that less irrefutably to be broadcasting Competition in it to also integration rights 2 will This gazette is also available free online at www.gpwonline.co.za This presumes been to shown However, is used if show and if, rights Table the in market market market limit control the Suffice extent power power above firm used 35% well. own that The has can for As of to in is A 7.1.4 7.1.3 7.1.5
i i order of have failures the conditions in be and imposed course and subscription the 83 a proposed be. on Authority 67 to of
sport of on this with the would what conditions that documents broadcasters.
in section some 1 1 purposes consulted consultation market competition, be deal markets the premium, and consider failures only the in outline in in terms to possible licence issues competition for by would other For CONDITIONS and issues remedies relevant for specified published; of provided separate market sections ineffective licence input. broadcasting; then vertica and type obligations condition competition -competitive on identified the findings records various and public ineffective must -competitive information as a following in and licensee's by follow licence amount process LICENCE power Having with the reselling characterised for accounts, make Authority Authority, pro for to: with designed Document. concerns? would be programming market deal limited any The possible it; pro the making any dealt only failure. could -COMPETITIVE by any and that are open concerning failures. 67(7) to to process publish the specified can have the not significant have access Findings there relating emphasised be matters of considers remedies market regulation competition to Authority are section to markets, nature services remedies. provided to that African market determined that a but 25 AUGUST 2017 25 AUGUST GAZETTE, VERNMENT distribution, manner obligations obligations obligations Such the a GO the
with to Jurisdictions fact include section in
PRO appropriate a the remedy be the
According South This gazette is also available free online at www.gpwonline.co.za published all television identified
kept, following ECA. F! F! relevant Overview licensee possible raise the must the inquiry POSSIBLE where Does been r r may This and the (iii) (iv) (ii) to (i) It market
Q24. 070 8.1.1 8.1.2 8.1.3 8.1 8. No. 41
86
STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 87
the the for for the the acquisition of premium 8.2.1 8.2.1 upstream market focus focus at The The
content content rights rights conditions of including including the how how sold, sold, and and is is terms terms are are on on
such such sale.
-term -term 8.2.2 8.2.2 contracts times inevitable feature of and and Long Long at at common common are are a a
activity. activity. economic economic various why companies would There There reasons reasons are are
long long -term -term prefer prefer to enter into opposed opposed contracts contracts to transacting on on as as
market56. market56. of of the the the the why long long One One -term -term contracts contracts spot spot reasons reasons are
the the market market for of preferred preferred premium premium the the acquisition has has in in content content to to
market market transaction transaction regular regular of of with with the basis. basis. do do to to going going costs costs on on a a
Where Where multiple multiple interactions market the the between between players repeated repeated and and in in
expected, expected, long long -term -term transaction transaction contracts contracts reduce reduce used used be be to to are are can can
of of negotiation negotiation including including costs, costs, search search engaging engaging costs, costs, cost costs, costs, in in
there there contract contract writing. fundamental fundamental exchange exchange and and two two However However are are
to to from from factors factors consider consider analysing analysing when when long long -term -term contracts contracts a a
for for competition competition rationale rationale perspective perspective entering into the (a) (a) the contract contract - -
the the the the prevailing prevailing and and context context of at at time contracting circumstances circumstances or or
(b) (b) the competition the the relevant market. effects effects and and of of contract contract the the in in
put put Foreclosure Foreclosure
of of of of the 8.2.3 8.2.3 effects effects long long One One for for -term -term market market the the the in in contracts contracts
of of acquisition acquisition input input premium premium content foreclosure. foreclosure. Whosoever Whosoever wins wins is is an an
exclusive exclusive forecloses contract contract the competitors competitors from accessing accessing content. content.
of of limiting the the harm harm As As -term -term to to competition created created by by long way way a a
their their duration duration could could contracts contracts reduced. reduced. Commission Commission The The European be be
that that longer longer considers considers
contracts contracts than general general raise raise 5 5 concerns, concerns, years years as as a a
rule rule because because contract contract from from efficiencies efficiencies arising usually such such do do not not any any a a
ffset ffset foreclosure effects beyond beyond duration67. duration67. that that Whilst Whilst the South South
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88 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Introduce Introduce unbundling unbundling 8.3 8.3
of of 8.3.1 8.3.1 unbundling The The sport sport rights to to involves involves offering the rights than than more more
buyer, buyer, making the different different platforms platforms rights rights usually usually available available one one on on
subscription subscription such such tv tv tv for for Jurisdictions Jurisdictions instance. instance. mobile mobile and and and IPTV IPTV as as
that that rights rights unbundled unbundled have have Brazil68 Brazil68 sport sport into into separate packages packages include
and and marketfi9. marketfi9. the the borader Commission Commission European European The The European has
that that the the adopted adopted approach approach of of sport rights rights must satisfy satisfy the sale sale be be an an
following following conditions: conditions:
they they sold sold tender tender must must be be open open on on (a) (a)
"unbundled" "unbundled" the the be be rights rights must than than buyer; allowing allowing single single ¡b) ¡b) more more a a
of of term term exclusivity exclusivity three three regarded regarded excessive excessive being (a (a no no (c) (c) years years as as a a
general general norm); norm);
of of automatic automatic contracts contracts (regarded extension renewal renewal disguised disguised (d) (d) no no as as a a
of of the the the exclusivity).70 exclusivity).70 of of term term
splitting splitting rights rights Impose Impose 8.4 8.4
Rights Rights splitting splitting content rights 8.4.1 8.4.1 requires rights split and and sell to to owner owner a a
them them broadcaster71. broadcaster71. of of to to than the the split The The design is is more more one one
wider wider rights paramount paramount to benefit the the to to and and ensure ensure owner. access access
for for splitting splitting arguments arguments rights. various various the There There and and of of against against In In are are
the the end end that that Authority Authority the the interested interested condition condition would would long long has has in in be be a a
splitting splitting term term the the market. with with benefits benefits advantage advantage The The in in rights rights into
that that it it facilitates facilitates smaller packages packages who who by by is is entrants entrants many many access access new new
full full the the pockets pockets have have deep package bid bid of of for for the the to to not not rights. On On may may
it it difficult difficult however, however, downside, downside, find to to to subscribe subscribe consumers consumers may may
El El
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Mol Mol
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ayl ayl o6llsapung o6llsapung .19000S .19000S ino; ino; sayo;ow sayo;ow sly6u sly6u Jo; Jo; lpZ lpZ aas aas suosoas suosoas 6ulüo;s 6ulüo;s L L .101 .101 u! u! ss ss
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 89
wholesale- wholesale- 8.5 8.5 -offer -offer Impose Impose must
8.5.1 8.5.1 three three following following investigation, investigation, regulator communications communications In In 2010, -year -year a a
wholesale wholesale Ofcom Ofcom imposed -offer -offer must must regulation premium BSkyB's BSkyB's a a on on
channels, channels, Sky Sky other other requiring requiring these to Sports Sports available available to made made be be
distributors distributors regulated regulated of of undertook undertook review review at at In 2014 Ofcom Ofcom prices. prices. a a
that that -offer -offer intervening intervening the the wholesale- must obligation the found found and and in in
there there period period of of number number developments the subscription had had been in in -tv -tv a a
availability availability of sector sector including the wider competing competing content content sports sports on on
of of -the -the platforms, platforms, retail retail offerings increased increased and and -top -top over over presence presence an an
of of Internet Internet providing providing additional services services devices devices and and new new means
content73. content73. tv tv the the subscription subscription There There accessing accessing entry entry into into was was
market market subscription subscription British British Telecommunications by by (BT) who plc plc -tv -tv was was
able able key offer offer other to to result, acquire acquire sports rights, channels. channels. and and As As a a
-offer -offer obligation obligation to to the wholesale- Ofcom Ofcom decided Sky. Sky. must must remove remove on on
8.5.2 8.5.2 market market market still still The The South African broadband not not mature yet. yet. is is as as
Although Although mobile broadband gained gained has has traction, traction, connection connection fixed
still still result result the uptake uptake broadband broadband connection at at low low levels74. levels74. is is of of As As a a
regulatory regulatory not not the rapid rapid Thus, services services OTT OTT be be in in UK. UK. may may as as as as a a
of of -offer -offer intervention intervention might still the the form wholesale- wholesale- be be in in must must a a a a
remedy75. remedy75. feasible feasible possible possible and and
d d d d
o o c
Lrrf Lrrf T1=-:.r'° T1=-:.r'°
So So A C C
joint joint of 72 72 Autumn Autumn Number Number Football: Football: selling selling media rights. 2003 2003 Toft, Toft, 3 T. T.
Competition Competition Newsletter. Newsletter. Policy Policy - -
73 73 of of Ofcom. Ofcom. the the wholesale -offer Review Review 2014. 2014. at at obligation. obligation. Available must must TV TV pay pay
htro:fistokçho'¢ers htro:fistokçho'¢ers 4fCOm,Qr,g,Vk14!!!4reí1Q4nsu:'P11onslwrrq'e5olp 4fCOm,Qr,g,Vk14!!!4reí1Q4nsu:'P11onslwrrq'e5olp piferl.Lmm4FYrr4-rd9GQSlf piferl.Lmm4FYrr4-rd9GQSlf
74 74 Africa. Africa. State State ICASA. ICASA. of of Sector Sector South South 2016 2016 in in ICT ICT
75 75 have have of wholesale wholesale -offer number number remedies remedies Elsewhere Elsewhere Europe, must must in in been been imposed which -tv -tv pay pay on on a mergers mergers
created created dominant dominant operator Sogecable /Via with with control premium (e.g. (e.g. Digital, Spain content content over over a a 2002; 2002;
Newscorp/Telepiù, Newscorp/Telepiù, Italy Italy France France 2006.2012) CanalSat/TPS, CanalSat/TPS, 2003; 2003; 86 86
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90 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
firm's firm's network network dominant dominant 8.6 8.6 Open Open up up
8.6.1 8.6.1 At the the the following remedies: remedies: technical technical services possible possible could could level level be be
of of 8.6.1.1 8.6.1.1 fostering fostering entry obligation obligation would would involve placing placing One One way way an an on a a
their their distribution distribution infrastructure dominant dominant provider to to to other open open
subscription subscription television broadcasting broadcasting providers. Technical Technical
competitor competitor interventions interventions the the conditions offerings offerings create create which which in in can can
better better dominant dominant to to subscription subscription television take take able able are are on on a a
of of the the broadcasting broadcasting provider. In technical technical Ofcom's Ofcom's guidelines case case on
platform platform distribute direct the the services, services, channels able able to to to to are are
satellite satellite platform infrastructure digital digital using using BSkyB's consumer consumer
they they regulated regulated including including have have because because BSkyB's BSkyB's to to services services access access
they they about about conditional conditional the the have have how channels channels and and certainty certainty access, access,
for for the the these these guidelines, guidelines, will will listed Under Under Ofcom's be be prices prices EPG. EPG. on on
this this regulated. regulated. In services services enhanced by by be be competition competition way, way, are are may
for for the the utilise utilise creating creating
circumstances circumstances entrant entrant to to existing new new a a
infrastructure, infrastructure, thereby barriers barriers lowering lowering to to entry.
Is Is the the the the African market feasible feasible proposal proposal in in South South above above Q26. Q26.
context? context?
Introduce Introduce inter inter -operability box box 8.7 8.7 -top -top set set
the the downstream remedy: level level the possible 8.7.1 8.7.1 At following could could be be a a
8.7.1.1 8.7.1.1 order satellite satellite subscription television to to broadcasting broadcasting In In DTH DTH access access
the the services services purchase purchase customer customer at at moment to viewers viewers premise premise have have
the the form form of equipment equipment -top satellite receiver set set -boxes dishes. dishes. and and in in
that that the the
In In event customer to wants wants switch service providers a a new new a a
-top -top of set set -box -box required. required. This This lack lack and and dish due is is to to are are
of of interoperability interoperability the the switching switching which which high high and leads leads CPE, CPE, to to costs costs
for for Interoperability Interoperability of factor factor hassle hassle help help CPE CPE to to consumers. consumers. can can
to to stimulate stimulate competition lowering lowering switching However, costs. costs. by by due
interoperability, interoperability, the the -box -box technical technical complexities surrounding -top -top set set
87 87 (CASA (CASA
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STAATSKOERANT, 25 AUGUSTUS 2017 No. 41070 91
after after MEE MEE eamilikum eamilikum (ENO! (ENO! Nmeekie Nmeekie
Offiwome0 Offiwome0 wrg wrg Rs! Rs!
mime* mime* abeam*. abeam*. tâmaiagi tâmaiagi whim whim Oil Oil taawvaat taawvaat
11116160E 11116160E
9. 9. CONCLUSION
The The
Authority Authority 9.1.1 9.1.1 questionnaire questionnaire to to July July issued issued used used 2016 2016 11 11 responses responses on on a a
internal internal meetings meetings with well well research research and and its -one -one some -on -on own own one one as as as as
for for to to stakeholders stakeholders compile compile this public public Discussion Discussion Document Document
consultation consultation the the television Document Document analyses analyses The The Discussion purposes. purposes.
then then broadcasting broadcasting services general focuses focuses and and in in sector sector subscription subscription on on
particular. particular. television television broadcasting services services in in
Authority Authority 9.1.2 9.1.2 markets markets relevant relevant the the define define The The based based to to proposes proposes on on
of of
television television number markets markets service service value chain. chain. rele rele sub sub and and A A vant vant - -
from from subject subject markets markets stakeholders proposed, proposed, but have have been input input to to are are
that that the the Document. Document. research research Discussion Discussion in in to to suggests suggests The The response response
of of there there number number markets markets the downstream and and upstream, upstream, levels levels in in are are a a
sought sought markets. markets. Stakeholder relation technical technical well well views views in in as as as are are
the the approach approach and and that that ority ority the the instruments instruments employ employ to to Auth in in can can
markets, markets, the the defining defining information information the the vis vis vis research conducte in in d d a a
seeking seeking phase.
Authority Authority 9.1.3 9.1.3 with the the the line line also also the the of In In effectiveness effectiveness considered considered ECA, ECA,
the the proposed proposed competition competition markets. markets. considered considered include Factors Factors in in
barriers barriers of of entry, entry, character character the the dynamic nature the market, to to and and
vertical vertical and and whether whether competition integration integration alone alone would law law be be
the the sufficient sufficient to market potential potential failures subscription address address in in any any
broadcasting broadcasting
the the sought sought markets. markets. Stakeholder views views in in to to response response are are 88 88
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92 No. 41070 GOVERNMENT GAZETTE, 25 AUGUST 2017
Stakeholders Stakeholders analysis. analysis. alternative alternative invited invited to to provide also also are are
these these approaches approaches research research and and issues. issues. on on
Insofar Insofar 9.1.4 9.1.4 the the identification of market market with with significant licensees licensees as as power power
Authority Authority the the concerned, concerned, has has is is for for methodologies methodologies calculating calculating proposed proposed
that that market market the the shares. shares. In event event the the relevant markets confirmed confirmed are are
that that there there ineffective ineffective and and Authority Authority competition competition the the those those markets in in is is
required required then then consider possible possible is is that that to to conditions conditions imposed imposed be be can can on on
significant significant with with licensees licensees market market addition addition to the conditions In In power. power.
Authority Authority 67(7) 67(7) of the the the listed listed also also in in section section discusses discusses possible ECA, ECA,
other other jurisdictions. from from literature remedies remedies remedies remedies imposed and and in in
Authority Authority input input the the these these The The seeks seeks suitability suitability feasibility feasibility of and and on on
the the remedies remedies South South African in in context. context.
9.1.5 9.1.5 The The initiate initiate consultation consultation Document Document the to to public Discussion Discussion serves serves on on
Inquiry Inquiry into into Subscription Television Television Broadcasting Following Following Services. Services.
of of the the publication the Document Document the public will will given Discussion Discussion be be an an
opportunity opportunity public public
Should Should it it to to comment. deemed deemed be be necessary necessary a a
thereafter thereafter hearing hearing will convened convened and and be be Document Document published, Findings Findings a a
of of the the marking marking the end end inquiry. inquiry.
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