E.TV on Thursday lost its challenge to the state’s digital migration policy, with the High Court stating firmly that the government should not have to pay for the private, commercial aims of individual broadcasters.

Unless it is appealed against, the judgment clears the way for the government to implement the migration from analogue to digital TV broadcasting, already behind schedule after the June 17 deadline was missed.

The case concerned set-top boxes that the government plans to subsidise so that households without a digital platform such as a pay-TV decoder, can receive the digital signal.

An amendment to the policy by Communications Minister Faith Muthambi said that the set-top boxes would not have the capacity to unscramble encrypted broadcasts.

E.tv argued that the amendment effectively barred it from ever being able to encrypt its broadcasts, because the cost of doing it at a later stage was prohibitive.

While encryption is not necessary for the reception of free-to-air broadcasts, e.tv said its ability to encrypt future broadcasts was “essential to its business plans” as without it viewers would end up with a second-rate viewing experience, unable to access premium shows.

This was hotly disputed by Multichoice’s M-Net and the South African Broadcasting Corporation (SABC). Pretoria High Court Judge Bill Prinsloo agreed.

E.tv had failed to explain adequately why it needed to encrypt its signal for free-to-air purposes, he said, adding that it was the only free-to-air broadcaster that supported the idea. “Encryption is not necessary for free-to-air broadcasting (and) it appears to have more negative features than positive ones.”

Referring to the arguments made by the SABC, he said there would be a one-off cost of “well over R100m” to equip the set-top boxes with encryption capacity and an estimated annual cost of R561,9m to maintain them.

The government should not have to bear the cost of facilitating the “private, commercially motivated objectives of individual broadcasters”, the judge said.

This was particularly so where they run counter to the public interest.

He referred to submissions made by community television organisation ACT-SA, which argued that the point of free-to-air broadcasting was to enhance access.

“Encryption is, by its very nature, aimed at restricting accessibility,” ACT-SA had said.

Judge Prinsloo said the legal test for rationality was not whether there were other, better ways for the government to achieve its purpose. The test was lower: whether the means selected were rationally related to the objective. The state had taken a decision to provide 5-million set-top boxes free of charge. Its view was that encryption was not necessary — either to protect its investment or to ensure a smooth transition — and it was expensive. “A choice by government not to subsidise an encryption capability in set-top-boxes is entirely rational and reasonable.”

Judge Prinsloo also rejected the argument that Ms Muthambi had failed to consult the public and crucial, interested parties. There had been extensive public consultation when a previous version of the policy had been published — during the tenure of Ms Muthambi’s predecessor Yunus Carrim — and during which round e.tv made extensive submissions. The new amendments did not turn the policy into something so “markedly different” to warrant a new round of consultation.

The judge found that, even under the Carrim incarnation of the policy, it had never said that the government-provided set-top boxes would have an encryption capacity. “E.tv has had a full bite at the cherry … It has made full use of its ample opportunity to express its views.”

It was clear the Independent Communications Authority of SA and the Universal Service and Access Agency of SA were involved at all times, he added.

Lawyer for e.tv Aslam Moosajee said they would meet on Friday on the judgment.

Source: BDLive – Franny Rabkin