E.tv is pressing ahead with its lawsuit against the minister of communications, challenging a decision that it warns could set up state-owned Sentech to charge whatever it wants for access to the control system for digital terrestrial television.

Communications minister Dina Pule should not be surprised by e.tv’s decision to take her to court over her “unlawful” and “impugned” decision to appoint Sentech as the manager of the crucial control system for digital terrestrial television, the free-to-air broadcaster’s chief operating officer Bronwyn Keene-Young says in new court papers.

E.tv filed suit against Pule in September, accusing her of exercising powers she doesn’t have when, in May, she appointed Sentech, a state-owned enterprise, to be the party responsible for managing the set-top box control system for digital television. Among other things, the control system will ensure compliance with a minimum set of specifications for set-top boxes and prevent grey imports.

In a new affidavit, filed in the high court in Johannesburg in response to an answering affidavit from communications department director-general Rosey Sekese, Keene-Young rubbishes a suggestion that appointing Sentech would fast-track the move to digital television and also save the country money. Pule had argued, through Sekese’s affidavit, that because Sentech already has a control system in place (for satellite television), the costs would amount to about R7m. According to Sekese, Pule was told by her advisers that the cost of acquiring a new system would be about R35m.

“The costs envisaged by the minister — apparently on the basis of discussions with Sentech — are far higher than the SABC and e.tv were anticipating pursuant to their own tender process,” Keene-Young says.

It had been originally proposed that the SABC and e.tv be responsible for the control system.

According to Keene-Young, Cisco subsidiary NDS — the preferred bidder of the SABC and e.tv to manage the control system — quoted less than R3m for the supply of a system. “Even when operating expenditure and inflation for five years is taken into account, the total, including capital expenditure, is approximately R13m,” she says in the new affidavit.

“Notwithstanding what is contained in … the director-general’s affidavit, Sentech’s record in managing its conditional access system leaves e.tv — and presumably the SABC — with real concerns regarding the location of decision-making powers over the management of set-top box control in the event that Sentech [does] not perform adequately,” she adds. Sentech has experienced serious security problems with the control system of its Vivid satellite platform, leading to litigation.

“If the set-top box control system fails, the greatest prejudice will be to [free-to-air broadcasters, which] therefore have a material interest in assuming responsibility for set-top box control as an integral part of discharging their licence obligations.”

In addition, e.tv says there is “simply no basis” to a suggestion by Pule that e.tv’s lawsuit is undermining the digital migration process.

“To suggest that the SABC and e.tv can procure their own set-top boxes to supply to non-subsidised viewers is manifestly against the public interest and contrary to the broadcasting digital migration policy,” Keene-Young says.

She also rubbishes the suggestion that if the free-to-air broadcasters don’t want to use Sentech’s control system that they can use their own in set-top boxes that won’t be subsidised. Government has agreed to subsidise the cost of the boxes for the poorest 5m households in SA.

The fact that set-top boxes will be sold in the retail market and not by broadcasters makes it “critical” that all of the boxes sold are compliant with the same control system, Keene-Young argues. If not, each set-top box control system would provide its own unique user interface and viewer experience. “It would weaken the digital terrestrial television platform for there to be ‘government’ boxes and ‘free-to-air broadcaster’ boxes containing different features and applications.”

E.tv has also taken Pule to task over her contention that she acted lawfully in making an executive decision in terms of the country’s constitution.

Keene-Young says it is “notable” that Pule has offered “no statute or regulation which empowered her to issue the instruction concerned” beyond agreements the country has with the International Telecommunications Union (ITU). “I deny that the ITU agreements provide any lawful basis for the decision concerned,” she says.

The reliance by the minister on the ITU agreements is “misconceived”, she adds. “I am unaware of any provision of the ITU agreements which deals with set-top box control.”

She says that much of Sekese’s affidavit represents a “fundamental misunderstanding of the nature of set-top box control. In particular, the director-general appears to focus on the purpose of protecting the state’s once-off investment in subsidised boxes rather than recognising — as she ought to have done — that set-top box control is critically about the needs and requirements of broadcasters and viewers”.

“Of central concern to e.tv, as a free-to-air broadcaster, is who will take responsibility for upgrading the set-top box control system — potentially at the cost of millions — if security is compromised or the control software fails. As my founding affidavit made clear, the approach of the minister and Sentech appears to be that Sentech is responsible for the control system and the free-to-air broadcasters must simply pay whatever is asked of them. That cannot be correct as a matter of logic or law,” Keene-Young says.

The high court is due to hear the matter later this month.

Source: NewsCentral Media – Duncan McLeod