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SABC’s licensing proposal involving Netflix, MultiChoice and DStv has proven divisive among some South Africans, but could also run into legal hurdles, experts say.
In October, Vice Minister of Communications Pinky Kekana presented a series of proposed legislative measures aimed at improving SABC’s revenue shortfall.
The proposed regulations include:
- Require pay television service providers such as MultiChoice (DStv) and Netflix to obtain television licenses on behalf of the public broadcaster;
- Expand the range of devices for which license fees would be paid to include, but are not limited to, smartphones and tablets, and not just conventional televisions.
However, these measures could face some legal challenges, says Ian Jacobsberg, director of Corporate, Mergers and Acquisitions and Antitrust at Tabacks Attorneys.
The duty of members of the public to obtain and pay for television licenses arises from article 27 of the Broadcasting Law, 4 of 1999.
“In terms of the section, the responsibility to pay a license fee arises from owning and using a television, in other words, it is purely related to the hardware, and not the content of the program that you are accessing,” said Jacobsberg.
“The owner of a television that is subscribed to a pay television channel has the same obligation to obtain and pay for a television license as one who only watches SABC programs.”
Jacobsberg said that in terms of section 27 (1) (b), distributors cannot sell televisions to anyone who is not in possession of a license, and therefore they are effectively part of the enforcement mechanism.
“It would be quite easy to introduce a similar regulation that requires a subscription service provider to ensure that a potential subscriber has a license before making the service available,” he said.
“The most difficult problem arises if the SABC is really going to try to force the service providers to collect the license fee and pay it to the SABC.”
Jacobsberg said that the reality of how Internet services are typically provided, some challenges arise as to how the proposals will be implemented in practice:
Month to month
For many, if not most, subscription services, contracts between the subscriber and the service provider run on a month-to-month basis, Jacobsberg said.
Will a service provider have to confirm once a month that all subscribers have a license? Or will they have to keep track of how long each subscriber’s TV license is left to run when their subscriptions start and make sure it is renewed before it expires, before continuing to provide the subscription service?
Who has the responsibility?
If a subscriber receives content from multiple service providers, who will be primarily responsible for charging the license fee?
Device-based licensing?
The obligation to obtain a television license arises when a person owns and uses a “television,” Jacobsberg said.
“Among the minister’s proposals is that the range of devices on which license fees will be paid should be expanded to include laptops, smart phones and others where video content can be received and viewed,” he said.
However, Jacobsberg said this is “a red herring.”
The Television License Fee Regulation published in terms of the Broadcasting Law defines a ‘television set’ for which a license is required, as’ any device designed or adapted to be able to receive broadcasts broadcast in the course of a broadcast service. television broadcasting ‘, definition broad enough to include smartphones, tablets and laptops.
“Therefore, it does not appear that it is necessary to make amendments to the existing legislation to make this idea effective,” he said.
“However, it raises a question about the retailers of these devices and the network service providers that provide the devices as part of a bundle to subscribers – should they in fact be insisting on viewing each customer’s TV license before supply the device? “
Does the SABC have the authority?
A question also arises about the SABC’s legal authority to delegate authority to collect license fees to private sector companies, Jacobsberg said.
In part of the media coverage of the proposal, the SABC is reported to have said that requiring subscription service providers to collect television license fees’ would be similar to municipalities charging traffic fines and discs motor vehicle licenses, ‘he said.
There may be a similarity in the fact that the duty to collect revenue due to a particular entity is delegated to another agency, but there the similarity ends, Jacobsberg said.
“The National Road Traffic Law and the regulations promulgated by virtue of it expressly allow the ‘shareholders’ committee’ designated in terms of the Road Traffic Management Corporation Law to designate local authorities as registration authorities.
“There is no such authority in terms of the Broadcasting Law; a provision allowing the SABC to delegate the collection of license fees was eliminated in 2003. “
There also doesn’t appear to be any global precedent for the proposed system, Jacobsberg said.
“In countries where television license fees are charged by a body other than the national broadcaster itself, they are generally billed together with fixed telephony services or electricity,” he said.
“Given the credibility issues surrounding the providers of both services in South Africa, it is unlikely that public resistance to paying TV license fees will be less if these precedents are followed.”
“The fact that very few, if any, countries have imposed an obligation on private sector service providers to collect license fees on behalf of the public broadcaster may well be an indication that legal obstacles , logistical and economic just don’t make it viable “
One issue that springs to mind immediately is cost, Jacobsberg said.
“Service providers will have to establish a completely new management layer to monitor billing and collection of fees.
“For the system to work effectively, that should include a provision for legal action against defaulters. Any private company is unlikely to react kindly to having to bear an additional layer of spending that it will not benefit from. “
Read: SABC wants to make radical changes, including more money from TV licenses and easy access to sports rights
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