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e.TV WINS APPEAL AGAINST DIGITAL MIGRATION POLICY

Supreme Court of Appeal found new digital migration policy ‘irrational’.

Free to air broadcaster e.tv has won its appeal against minister of communications Faith Muthambi’s controversial digital migration policy.

The Supreme Court of Appeal (SCA) found on Tuesday that Muthambi’s amendment of the policy “did not achieve its purpose and was thus irrational and invalid” and set it aside.

The judgement represents a further setback for South Africa’s digital migration project which has already missed several deadlines, the first being in 2011. South Africa also missed the June 2015 deadline set by the International Telecommunication Union.

The case started when Muthambi announced fundamental changes to the original digital migration policy announced in 2013. The original policy allowed for set-up boxes or decoders to recognise encrypted signals. This was deemed to be the best solution for free-to-air services.

In March last year, Muthambi announced a change in the policy to allow for non-encrypted decoders, which would be detrimental to free to air services, such as e.tv. The broadcaster took the matter to court, but late last year the North Gauteng High Court found in Muthambi’s favour. e.tv then appealed and the SCA has now ruled in its favour.

The judgment is rather scathing on Muthambi’s conduct, stating that she should have consulted industry players such as e.tv and that she misunderstood the potential impact on the market. “In my view, the failure by Minister Muthambi to consult ICASA (the Independent Communication Association of South Africa) and USAASA (Universal Services and Access Agency of South Africa) is even more egregious given their statutory duties. So too the failure to consult the appellants, all of whom had an interest in the policy, was quite simply irrational,” Judge CH Lewis wrote in the judgment.

The judgment also states that the policy of encryption has made it impossible for e.tv and other broadcasters to manufacture their own setup boxes and distribute these in addition to the government-subsidised setup boxes. In e.tv’s case it would have resulted in an expense of R3 billion or two years’ revenue.

The judgement also states that the new policy would make it impossible for e.tv to compete with high-definition content from pay-television broadcasts, which would stifle competition. “The Minister has thus not achieved her purpose and the amendment is irrational for that reason alone.”

It adds: “The Minister’s confusion as to the effect of the amendment shows its irrationality, and for that reason too it is in breach of the principle of legality and invalid. The appeal must succeed on the ground that the amendment was made in an irrational and thus unlawful manner and is inherently irrational as well.”

The minister and other respondents were also ordered to pay the costs of two council.

Read the full SCA judgement here.

In a statement released on Tuesday afternoon, e.tv welcomed the SCA ruling, adding that it hopes the “clarity provided by the ruling will aid in providing a proper approach to the implementation of the Digital Terrestrial Television (DTT) migration in South Africa.”

e.tv states: “The SCA also found that the Minister was not empowered to issue such a binding direction, and she acted beyond her legal authority.”

Mark Rosin, COO of e.tv, said: “We are committed to the DTT platform, but want it to happen in an inclusive and organized manner. This ruling allows the possibility of a strong and stable DTT platform to South African free-to-air television viewers….”

Source: Moneyweb – Ryk van Niekerk