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White Paper Response Multichoice 15 Feb 2021 FINAL SUBMITTED 1.Pdf

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White Paper Response Multichoice 15 Feb 2021 FINAL SUBMITTED 1.Pdf MULTICHOICE GROUP'S REPRESENTATIONS ON THE DRAFT WHITE PAPER ON AUDIO AND AUDIOVISUAL CONTENT SERVICES 15 FEBRUARY 2021 TABLE OF CONTENTS INTRODUCTION ............................................................................................ 1 KEY PRINCIPLES AND VISION ................................................................... 2 CHAPTER 3 OF THE DRAFT WHITE PAPER: LICENSING FRAMEWORK ............................................................................................... 9 Context for a new licensing framework ...................................................... 9 MultiChoice supports development of expansive, enabling licensing framework ................................................................................................... 11 Replacing "narrow" broadcasting services with "broader" AAVCS ...... 11 Proposed licensing framework ................................................................. 13 Public service, community and commercial licensees ........................... 23 Reporting to the regulator ......................................................................... 23 Summary of MultiChoice proposals on new content service licensing framework ................................................................................................... 24 Radio frequency licences and spectrum issues ..................................... 25 CHAPTER 4 OF THE DRAFT WHITE PAPER: PUBLIC BROADCASTING ........................................................................................ 29 Key Policy Principles for Public Broadcasting ........................................ 29 Legislative Amendments ........................................................................... 33 Commercial Division of the SABC ............................................................ 34 Focusing on the public mandate .............................................................. 35 Sustainability of the SABC ........................................................................ 41 Funding model for public service broadcasting ..................................... 43 International precedent regarding public broadcasting and broadcasting fees....................................................................................... 47 Alternatives to TV licence fee ................................................................... 50 Economic modelling of alternative funding model for the SABC .......... 53 Concluding comments regarding possible alternative funding models ......................................................................................................... 54 MultiChoice firmly opposes any suggestion that subscription broadcasters collect TV licence fees ........................................................ 55 Role of the regulator in SABC’s integrity and viability ........................... 60 CHAPTER 5 OF THE DRAFT WHITE PAPER: CONTENT REGULATION 63 Introductory comments on content regulation in the new audiovisual media services context .............................................................................. 63 Comments on content regulation principles ........................................... 68 Must carry ................................................................................................... 72 2 Local content .............................................................................................. 85 Sports Broadcasting Rights ...................................................................... 97 Advertising Revenue Restrictions .......................................................... 112 CHAPTER 7 OF THE DRAFT WHITE PAPER: OWNERSHIP .................. 131 Limitation on control and cross-media control of commercial broadcasting services ............................................................................. 131 Limitations on Foreign Ownership ......................................................... 131 The centrality of ownership in the audiovisual content and ICT sector ........................................................................................................ 134 OTHER MATTERS .................................................................................... 135 Piracy ........................................................................................................ 135 Institutional Framework Supporting Audio and Audiovisual Sector ... 144 CONCLUSION ........................................................................................... 152 ANNEXURE A: INCOME TAX MODEL OF PSB FEE COLLECTION ....... 153 3 EXECUTIVE SUMMARY i. MultiChoice welcomes the initiative to set a new vision for the broadcasting and audiovisual sector. We congratulate the Department on taking the bold step to reset the country’s audiovisual policy through the publication of a Draft White Paper. ii. We are pleased to be able to participate in the White Paper process and, as is evident from our submission, we have endeavoured to provide constructive feedback on the various proposals made in the Draft White Paper. iii. In the two decades since the last White Paper, the most startling change has been the sheer number and diversity of new audiovisual services available to South Africans. MultiChoice therefore welcomes the initiative of the Draft White Paper to include new audiovisual players within a reformulated licensing and regulatory framework. Licensing framework iv. Much of the Draft White Paper focuses on the licensing framework for content services in the new environment. MultiChoice is in broad agreement with the Draft White Paper’s view that South Africa’s current licensing framework must be updated and that new audiovisual services should be brought into the licensing and regulatory framework. We generally agree with the proposed AAVCS definition although we have some reservations about the use of the term "editorial responsibility". We propose that the final White Paper should also provide for the concept of "organisational control" within the definition of AAVCS to provide for cases where a platform does not have editorial control, but through automatic and algorithmic means, it has the control over how content is organised. v. There are aspects of the framework which is proposed in the Draft White Paper which we submit must be amended, streamlined and simplified. A more streamlined and simplified model will help ensure a flexible regime which will allow different types of content services - whether on demand or linear (or a combination thereof) – to innovate and thrive in the new environment. i vi. For example, we are concerned that the proposal for a turnover threshold to determine which kind of licence is required for AAVCS services will make the licensing framework overly complicated to implement. Moreover, we believe the individual licensing process, which is quite cumbersome, is inappropriate for content services in the new, fast changing environment and should not be carried over into the new framework. vii. MultiChoice therefore recommends a simplified licensing model in which all content services will require a content service licence pursuant to a simple and efficient registration process, along the lines of the current class licence procedures. viii. In respect of the licensing approach to linear vs. on demand, MultiChoice submits that the breaking down of AAVCS licences into linear licences and on demand licences, as proposed by the Draft White Paper, should be done away with. We instead propose a single composite content service licence, which would permit the licensee to offer any combination of linear and/or on demand services within the single licence. ix. In respect of the regulatory approach to linear vs. on demand, MultiChoice submits that there should be an acknowledgement that linear content should in principle not be more heavily regulated than on demand content. The new framework should move towards a more flexible, lighter touch approach to both kinds of content. However, the exact regulatory and compliance mechanisms used may differ according to what is practical given the nature of the content. x. MultiChoice agrees with the proposal in the Draft White Paper that the concept of the three tiers of broadcasting namely public service, community and commercial should be maintained. The three tiers should be used to guide ICASA in the level of public interest obligations that apply to licensees, with public content services attracting the greatest public interest obligations. xi. The Draft White Paper proposes that all AAVCS conducting business in South Africa must provide the regulator with annual audited financial records and user / subscriber / audience numbers. MultiChoice supports this proposal. ii Spectrum issues xii. MultiChoice is of the view that AAVCS licences should be de-coupled from infrastructure, including the radio frequency spectrum (which should be within the scope of an ECNS licensee). xiii. The proposal that beneficiaries of the 700MHz and 800MHz digital dividend bands will fund D2D migration is highly welcomed, as it provides clear guidance on an issue that has been long standing in the sector. We agree with this proposal. xiv. We also agree that the design of the 7-MUX plan, with provincial SFNs, does not cater for the current framework of community broadcasting service licensing and that a solution for this is required. xv. Finally, we believe ICASA should do more in the area of frequency coordination to mitigate against the interference cases that have been experienced by DTH services. Public
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