Broadcasting Digital Migration implementation: briefing by Minister of Communications

Meeting report

Broadcasting Digital Migration (BDM) briefing by Minister & Department of Communications (DoC)
Minister for Communications, Mr Roy Padayachie, said that all the entities present at the meeting were appreciative that the Committee had convened this two day information session on the BDM programme that government was implementing. It was important to find a way to do oversight on its implementation, which had been going on for a long time in the country. The Director-General’s remarks would show the Committee how long the country had been struggling to execute the commitments made in terms of the international protocols to ensure that BDM took place, and the country was able to meet the timelines to switch off the analogue signal by 2013. The rest of the world had a target date committed to 2015, but South Africa had committed to a target of 31 December 2013 as switch-off date. The DoC was tasked with the responsibility to implement the Cabinet decision on BDM in the country. There was a holistic framework for BDM under-pinned by policy and effective regulation so migration could occur seamlessly, so people were not left without a television signal when the analogue signal was switched off. Parliament’s responsibility was to ensure that the DoC was doing its work properly and that the Ministry came to the party in delivering on governmental commitments. Today’s information session would allow Parliament to discharge its own responsibility of oversight. But, oversight should not be confused with who had the responsibility to ensure that the projects were implemented properly in the country. Oversight was done to ensure that the authorities responsible for implementation were accountable, and accounting to the highest office in the land, which was Parliament. The process of BDM and the establishment of the mechanism to ensure the television signal was available in the course of transitioning from analogue to digital was in itself a transitional phenomenon. The converter boxes converted digital signals to analogue so analogue televisions could still be used. The ultimate goal was to ensure that at some point in the future, people would get access to digital television, so there would be no need for intermediary mechanisms such as Set Top Boxes (STBs) or converter boxes. The DoC was mindful that it was managing a transition from one era of television sets to another. It was this transition that had to be executed smoothly with a good set of regulations. This was an immense task that required the collaboration of a number of important players such as broadcasters, regulators, distributors and consumers. A “governance board” had been established for the project to ensure coordination for the implementation of the project and the country’s commitments to stipulated timelines were met. The governance board and the structure of the DoC would sit as the decision-making centre and would attempt to coordinate and integrate the work of all the sectoral players as they move from one phase to another.

Background
Ms Rosey Sekese, DoC Director-General, gave a brief background, saying the history of the BDM programme had been quite a journey. The Digital Broadcasting Advisory Body (DBAB) was established by the DoC in March 2001 to advise the Minister of Communications on issues relevant to the introduction of digital broadcasting in South Africa. DBAB came up with recommendations on matters of policy and legislation, and matters of economic feasibility studies. Flowing from the 2002 tabling of the DBAB report, Cabinet resolved that the Minister develop policies for the digitisation of infrastructure and the infrastructure rollout. In April 2005 DBAB submitted a report to the Minister who established a Working Group led by the DoC and consisting of representatives from the public and private broadcasting sector. The Working Group’s job was to develop recommendations and contribute towards the development of a digital migration strategy. The DoC commissioned a BDM cost-benefit analysis, which dealt with the cost implications of the migration process. The Working Group submitted a report to the late Minister in November 2006. The Working Group’s recommendations were considered by the DoC and a BDM strategy was developed as well as a BDM rollout plan. In 2007 Cabinet announced the digital and analogue switch-off. In 2008, Cabinet approved the BDM policy, which also dealt with STB manufacturing and poor household subsidies. Cabinet also approved a policy to deal with the STBs and the establishment of an oversight committee called Dzonga. In 2009, the STB manufacturing strategy was developed and published for public comment and a workshop was held again on the strategy in April 2010. The DoC’s work in terms of BDM came from its participation in the International Telecommunications Union (ITU). South Africa was a member state of the ITU and was signatory to the Regional Radio Conference held in 2006, where they were part of a resolution adopted to migrate broadcasting services from analogue to digital. Part of the resolution was that from 17 June 2011, analogue transmission could not claim protection from digital interference.

The Chairperson asked where the document was on the background given by Ms Sekese. This was not included. The information was very helpful to Members, so it had to be included in the document.

Ms Sekese apologised for not including the background information in the report. Her team would try to put something together for the Committee.

Digital Terrestrial Television (DTT) Implementation & Rollout Plan Milestones, Key Activities & Risks
Mr Norman Munzhelele, Acting Deputy Director-General: ICT Policy Development, said the purpose of the meeting was to brief the Committee on the Digital Migration Master Plan and the progress to date.

The DoC held a successful DTT implementation workshop with key stakeholders on 5-6 May 2011. The product of the workshop was widely consulted and a comprehensive DTT Rollout plan for the country's migration programme had been developed. The Plan provided the DoC with an implementation roadmap for executing its responsibility to deliver a successful digital migration.

“The Scope” focused on achieving a well coordinated and successful launch, and achieving a realistic and practical target date based on various activities that need to be performed prior to launch. It was intended to be a roadmap towards the launch and aimed to identify key projects, timelines and responsible entities.

The key drivers for the launch date included the finalisation of the amended BDM Policy and the ICASA Performance Period, finalising and gazetting the DTT standards by the South African Bureau of Standards (SABS), finalising the STB Control Solution by the South African Broadcasting Corporation (SABC) and eTV, establishing the time required to produce components by manufacturers and the time required to develop and test STBs, and the availability of the functional Conformance Lab.

In terms of the DTT Policy review, the Digital Migration Policy Amendments were gazetted for public comment on 19 August 2011. The Scheme for Ownership Support had been developed and had been presented to the Economic Sector and Employment cluster. The STB manufacturing strategy had also been developed and presented to the cluster. The Project Management Office (PMO) structure had been developed and the process to capacitate the structure was under-way. An interim PMO had been established to run and coordinate the implementation of the DTT Project Plan. PMO reported to the Governance Board chaired by the Minister, as an oversight mechanism for the DTT Project Plan implementation. In terms of the regulatory process, consultations were held with ICASA regarding the performance period. Once the BDM Policy amendments were finalised, ICASA was expected to gazette the performance period. The Southern African Digital Broadcasting Association (SADIBA) had finalised its initial research work on South African transmission parameters. Draft parameters showed that 60% of South African TV owning households would need outdoor antenna. The network coverage needed for the commercial launch of the DTT platform was 70% and Sentech was committed to reach that target at the time of the launch. The platform marketing plan, business plan and joint venture association had also been developed as well as the Digital Migration Public Awareness and Social Marketing Strategy. The rollout of the marketing plan would take place by the end of October 2011. A Conformance Lab should be operational by December 2011. A final working group had held several meetings to amend the STB standards. The final standard was projected to be ready by the end of November 2011.

The SABC and eTV had already issued a tender for the STB control system and the process was due to be finalised. There were also a few issues around the area of the STB control system that the DoC was trying to resolve with all the broadcasters. Some of the issues requiring urgent attention included finalising the Scope of the launch, the launch date, the scope for switch-off, the scope of the subsidy, and the approach for software conformance. The DoC also had to secure funding for the DTT Project Plan and launch. The DoC was in the process of finalising the “RFP's” for the transaction adviser and for the subsidised STBs.

The DTT launch milestone plan showed that the second half of 2011 had to be used to provide policy, regulatory, technical and funding certainty, and planning for viewer and technical support to enable rollout in 2012. The first half of 2012 would be used to finalise testing, prepare viewers through marketing and manufacturing of STBs in order to enable a third quarter 2012 DTT launch.

Discussion
The Chairperson noted that the Committee needed the DoC’s document for the background information on the BDM policy. It would be helpful to interrogate the presentation.

Ms S Tsebe (ANC) addressed the scope on page 6 of the presentation. She noted that the DoC had very good intentions, but April 2012 was around the corner and they had to make a plan to ensure that all the objectives would be achieved. She asked what role the DoC would play in ensuring that the distribution of STBs reached the poorest of the poor in remote areas. What role would municipalities play in identifying the needs of the community? The DoC said that community development workers (CDW) would play an important role in the distribution, but what about ward councillors? Were ward councillors also going to be empowered so they could assist and respond where needed? If something went wrong, people were not going to blame the CDWs; they would blame the ward councillors.

Ms Tsebe noted the DoC said a structure for the PMO was being developed, but that an interim PMO had been established and people seconded from the DoC. She asked for more information on the composition of the structure and the terms of reference. Sentech was committed to reach the target of 70% network coverage needed for the launch of the DTT platform. Where was the 70% going to be in the nine provinces? The 70% target had to cut across all nine provinces. The Committee represented the rural poor. April 2012 was around the corner. She asked in which areas the DoC was going to pilot their awareness campaign.

The Minister explained that said that the standard developed by the South African Bureau of Standards (SABS) for Set Top Boxes (STBs) made provisions for both high and standard definition signals. The definition of the signal received depended on the TV set. The knowledge of sales people in the market and public awareness of digital, analogue, and high definition signals would need to be addressed. The Marketing and Information Campaign was intended to assist with this.

Mr Ruben Mohlaloga, Chief Director: E-Content Policy Development (DoC), replied that the target audience was critical for the success of the campaign. The provinces and local government played a very important part in the campaign. The DoC had taken this on board. They would also look towards their sister departments as well as Members of Parliament to assist with the campaign. The Members were ambassadors for DTT so the DoC appreciated their assistance with the awareness campaign.

In terms of piloting the awareness campaign, consultations were being held with various stakeholders. The DoC aimed to launch the awareness campaign at the end of October 2011 in one of the more rural provinces in the country. USAASA had begun to explore that area of work to find out how best the campaign could be launched. The DoC was thinking of launching the campaign in Mpumalanga, but this had not been settled.

Ms W Newhoudt-Druchen (ANC) said she was still waiting for a list of all the acronyms used in the presentation. She asked them to explain BDM, SADIBA, RFP, and TC74. She asked if the DoC’s public awareness campaigns would be accessible to the deaf and how the DoC would ensure the campaigns would be accessible to the deaf.

Mr Mohlaloga answered that BDM stood for Broadcasting Digital Migration, RFP meant Request for Proposal, and TC74 was for Technical Committee 74 of the South African Bureau of Standards (SABS).

Mr N van den Berg (DA) asked if the Committee could get a detailed plan for each of the sections of the DTT Launch Milestone Plan. He also wanted feedback on the DoC’s progress on the BDM programme on a regular basis. He wanted to know if the STBs would be “encrypted”. He did not know if this was the right term when talking about decoding the SABC’s signal. The SABC and eTV had already issued a tender for the STB control system and the process should be finalised soon. He asked for more information on this. Was the tender process the normal process that was followed? The day that the Committee was in Soweto, DSTV told the Committee they were ready to roll but the DoC was holding them back. He asked if it would be okay for DSTV to move forward so they could work out a lot of kinks regarding the migration. What was Digital Dzonga’s contribution to the BDM project? What would happen to the everyday antennae that people used for their houses? Would these have to be replaced? He wanted to know if issues regarding spectrum had been resolved. Did everyone know where they stood and what spectrum they were supposed to be using?

Ms Sekese replied that it would be a normal tendering process for the tender issued by SABC and eTV. This was not a process that the DoC was very involved in. The SABC would be able to respond to this matter when they came before the Committee.

Mr Linden Petzer, DoC Chief Director: Radio and Satellite, replied that the spectrum issues had been finalised. In 2006 the ITU developed an agreement for DTT covering the whole of Africa. Based on this, ICASA developed a National Frequency Plan that set out the long-term frequency assignments for all broadcasters. So all broadcasters were clear on which spectrum they could use.

Mr Petzer said the matter of antennae was a complex issue and would be dealt with in more detail at the next day’s meeting with Sentech. There were users that would be able to use their old antennae. However, in many areas users would have to use new antennae as frequencies had changed to accommodate DTT.

Ms N Michaels (DA) said the STBs were a great concern to her. One of the things that worried her was that there was a great deal of uncertainty amongst the public about what a STB is. She asked where people would be buying the STBs, what kind of TVs they would need, when the DoC was going to explain to the public what they would need for digital migration. The public were nervous about digital migration because they do not understand what it is. She wondered what would happen to someone who was not registered as an indigent and would not qualify for a free STB. Her understanding was that there was an allowance for a certain amount of free STBs for the public. But, if someone did not have access to a STB, would it mean they would not have access to TV anymore? She wanted to know who would be manufacturing the STBs. She assumed the appropriate tender process would be followed. She noted that there used to be a website that explained the BDM process to the public. However, the website had not been updated in two years, which meant all the information was outdated. She asked if the DoC was going to enter into an entirely new form of advertising or if they were going to take whatever they had already and update it. The DoC could use existing infrastructure to build on what they already had.

Ms Sekese answered that the usual, legitimate tender process would be followed to assign the task of manufacturing STBs. There was a need to appoint a transition adviser because of the magnitude of what it took to come up with such a process. The DoC could not pre-empt who was going to manufacture the STBs and who was not, but they knew it would have to be a legitimate process.

Mr Mohlaloga replied that the website had been launched, but it had to be revamped as part of the viewer support plan. The DoC would ensure that the website was updated consistently.

Mr Mohlaloga explained that the Scheme of Ownership Support for TV owning poor households was intended for poor. Cabinet had approved the subsidisation of 70% of the total cost of the STBs. The DoC would be going to Cabinet to discuss the various qualifying criteria and the level of subsidy. Television specifications for the STBs were being worked on. They would generally be high definition televisions.

Ms A Muthambi (ANC) noted that the PMO was replacing the Digital Dzonga because of the challenges the entity had. She asked what conflicts or challenges the entity experienced. She asked if the PMO would have all the same duties as the Digital Dzonga, who they would be funded by, and if it would have the same composition as the Digital Dzonga. The DoC had said the DTT business plan was close to completion. What did this mean? The Committee wanted exact dates. The DoC said the approach for the STB conformance scheme was being finalised. She asked them to elaborate. What issues surrounded the STB control system?

Ms Sekese responded to questions on the PMO. She asked the Committee to recall that the Doc presented the structure of the PMO when they presented their first quarter performance report. They showed members that there was a Digital Migration Branch in the DoC. This was the PMO structure they were talking about. The structure was approved and the DoC was in the process of appointing a Deputy Director-General and three Directors. The DoC also had to go through a process of amending the structure, which meant that they had to utilise internal resources to ensure that the process moved forward. The terms of reference for the interim PMO was to move forward with the delivery of the project on the scope agreed on, and the timeline. Once the PMO was populated, there would be a handover process where people assigned to other activities would move out and those appointed to the PMO would continue the work. There were a few people in the DoC that had the capacity to take over the PMO. This had already been discussed with the Minister. The PMO was intended to be an interim structure; it was not a permanent component of the DoC. Once the BDM project was completed, the PMO would be phased out.

Ms T Ndabeni (ANC) noted that the DoC said the Conformance Lab should be operational by December 2011. She asked what stage the project was at now. Could the Committee get the terms of reference for the interim PMO and the composition of the governance board? One of the weaknesses of the digital migration plan was the instability of the policy drivers for projects. She asked what policies could be put in place so that if the situation changed, the process would not be delayed, by introducing new measures. Amendments to the policies had created regulatory uncertainty. How would they ensure that the amendments were on par with regulations already there?

Mr Mohlaloba replied that the Conformance Lab would be operational by the specified date. The DoC was confident that this would happen on time.

Ms Sekese replied that the Governance Board was a structure chaired by the Minister and deputised by the Deputy Minister. Its main function was to ensure that the turnaround time to resolve issues was reduced. A number of challenges had been encountered throughout the BDM process; therefore, it made a lot of sense to have the Governance Board in place to address these.

Mr Munzhelele added that the Governance Board consisted of the Minister, Deputy Minister, the DG, the project manager of the PMO and the DDG responsible for policy. The PMO would also provide secretariat to the Governance Board. The Minister, Deputy Minister and DG were on the Board while the others were being appointed.

The Chairperson warned the DoC that just because the Minister and DG were already on the Board, did not mean that a proper structure was in place. There was a difference.

The Minister pointed out that the question had been about the composition of the Governance Board and Mr Munzhelele had replied to this. If the question was whether the structure had been established, then the answer would be yes. The structure had been established and had had three sittings. The purpose for the structure and its role was very clear; it was a coordinating structure to give some cohesion to the BDM implementation process. For example, it had taken the DoC very long to get the broadcasters to come to some consensus on matters relating to the STB control access system. There were obvious reasons why this had happened, such as having divergent interests. In such a case, the state had had to take the over-riding interests of the project and the nation to heart to determine the best policy. It was the Governance Board that was saddled with this responsibility. So, the structure was in place and it met regularly.

Ms Sekese addressed the question on policy amendments. She said that the DoC had to consult with the regulator on the matter, obviously, when the initial policy was finalised. ICASA also finalised the regulations. Therefore, in amending the policies, ICASA also had to be consulted so the regulations could speak to the amended policies. ICASA would be able to deal with this when they presented to the Committee.

Ms R Morutoa (ANC) said that people did not understand what DTT was or the broadband rollout. She wanted to hear from the DoC that it had a plan for disseminating this information to the public. In terms of the viewer support plan, she asked how this affected people in deep rural areas who did not even know about call centres or websites. How was the DoC going to be working with the GCIS on this matter?

Mr Mohlaloga said that the DoC had been struggling with this particular matter for a number of years. Many of the Members had raised concern about whether the public was aware of the BDM programme. The DoC reported that it had developed a public awareness and social marketing strategy, which had been shared with stakeholders already. A stakeholder task team was established that consisted of the SABC, eTV, ICASA and other communication and marketing specialists. This would ensure commonality in terms of the message and the campaign. This project was going to rise or fall on the shoulders of an effective public awareness campaign for the take-up of STBs. He understood that the people in rural areas did not have access to the website, but there were DTT ambassadors and CDWs that could be trained on DTT to spread the message, and answer questions that people had.

Mr Mohlaloga said consultations had been held with GCIS and they welcomed its comments. This was going to be a massive project, but they wanted to inspire everyone to be an ambassador for DTT and help spread the word.

The Chairperson stated that the challenge with the DoC’s presentation was that it did not help the Committee to do its oversight work because there were no timelines included in the document. Many of the DoC’s objectives were not clearly defined and the presentation did not say when they would be finalised.

Mr Robert Nkuna, Special Advisor to the Minister, said that STBs were intended to revive the electronic industry. The DoC had proposed a model to Cabinet for the criteria to be used for preferred stakeholders to partner government in attaining its goal and for transformation of the sector in terms of gender and race. On the regulations side, DoC had tried to minimise changes to meet deadlines and not delay the ICASA regulatory processes. A project booklet outlining milestones and time frames would be distributed to Members.

Minister Padayachie noted that a number of detailed questions had been asked. More clarity was needed on the establishment of the PMO office, its structure and whether the PMO replaced the Digital Dzonga in its entirety. The second area of great concern had to do with DoC’s awareness campaign. Members needed more clarity on this because there was very little information on the BDM process in the public domain. Thirdly, the Committee needed more information on the standard of the STB control mechanisms and how it would impact on the implementation of the process. Members also needed clarity on the manufacturing of the STBs, in particular, the process by which manufacturers would be selected, and how consumers would obtain the STBs. The Committee needed more information on the state of readiness of broadcasters with respect to channel line-ups.

Ms Rosey Sekese, DoC Director General, concluded that the critical milestones for full-blown implementation of the project were: Cabinet approval on the scheme of ownership for the Set Top Box Manufacturing Strategy and thereafter requests for proposals; and finalisation of the policy and regulations by ICASA.

Ms S Tsebe (ANC) said that although the composition of the Governance Board had been answered, there had not been a response to the question on the composition of the PMO. She then asked what DoC’s plan was to address the milestone of recruitment of human resources when there was no funding available.

Ms Sekese replied that even though there was an approved structure for PMO, DoC was awaiting approval from National Treasury for funding the Project Management Office. In terms of recruitment, DoC had reprioritised allocation of funding resources for key strategic projects.

Ms T Ndabeni (ANC) commented that she did not understand why the DoC would need to go through advertising for positions when it was stated in the document - under performance achievement - that the PMO structure had already been developed.

Ms A Muthambi (ANC) asked if all entities were aligned with DoC for DTT implementation and if DoC had started any capacity building programmes for those who would be responsible for implementing the project.

Ms Tsebe asked what the role of the DoC entities would be and how they were represented on the Governance Board.

Ms Ndabeni asked if DoC had started any capacity building programmes for those who would be responsible for implementing the project.

Ms Sekese replied that DoC would play an integrative role of oversight on implementation of each entity’s project, similar to the role DoC played for the FIFA 2010 World Cup. DoC engaged entities on a regular basis on the status of their projects. The magnitude of the project involved risk and challenges both to entities and DoC. What was important was close collaboration to ensure management of risks and more importantly to ensure delivery.

Mr Nkuna added that the Governance Board dealt with many issues pertaining to DTT and entities were only invited to present to the Governance Board when there was a need for them to attend meetings on matters which affected them.

Mr Munzhelele added that the administrative component would be dealt with by the PMO. Over and above that, the Governance Board provided oversight on what needed to be done. Within this structure, a reference group, composed of local and international experts, advised the Minister when required. The Stakeholder Forum catered for broadcasters to meet monthly.

The Minister explained that the PMO was a unique structure and was implemented differently to the way in which projects in the past had been implemented. DoC in the past had allowed project implementation to be decentralised and oversight on entities was centred inside DoC through its stakeholder management units. This proved to be ineffective and projects were hampered by deadlines and delays. The readiness of the country to ensure that effective Digital Migration took place by December 31 required far more extraordinary measures. For this reason, DoC could not rely on the Digital Dzonga, which in the previous dispensation had about three sets of responsibilities. Firstly, it was an advisory body on Digital Migration to the Minister, secondly it was responsible for coordinating implementation and thirdly, it had to bring awareness and ensure that the information campaign was adequately spread. DoC was not satisfied that it was functioning adequately and the Minister took the decision to scrap it and establish a dedicated PMO in the DoC which could take responsibility for execution of the project and advise the Minister. It was a temporary structure in the DoC and was created, staffed and funded for as long as the project was implemented. It would cease to exist once the project was completed within the required time line. It was accountable and reported directly to the Governance Board, which was chaired by the Minister. It was composed of the Minister, Deputy Minister, DG, DDG responsible for policy, project coordinator of the PMO management office, CFO of PMO, technical advisor of PMO. From time to time the specific entities responsible would respond to the Governance Board on their progress in the implementation process. Where necessary, as with the broadcasters and SABC, the Governance Body would engage with entities to resolve problems and would address regulatory challenges with respect to policy amendments and regulations. The Governance Body would also ensure that the stakeholders were adequately informed on the progress of the entities responsible for their particular work in terms of the time scale and rollout of the programme. There was no intention for the Governance Board to take over the function of the entities. However, where an entity was failing to deliver, the Governance Board would intervene. Currently, the Governance Board was focusing on resolving a number of serious challenges collectively.

Ms Ndabeni said it was not clear whether there was duplication of roles.

The Minister replied that entities were the implementing arms of the DoC and each of them were assigned specific responsibilities. It would be clear from the reports the Committee received from Sentech that they understood the role of Sentech in the DDT programme and also clear from quarterly reports what the role of Universal Service and Access Agency of South Africa (USAASA) was, which centered mainly around the support scheme mechanisms and assisting DoC to identify and manage poor households deserving of the subsidised STBs. Quarterly reports also explained the role of the Regulator. The separate roles of the entities should be clear.

Ms Muthambi asked if the PMO, which replaced Digital Dzonga, complied with public participation requirements.

Mr Nkuna replied that the Digital Dzonga had a global council which was supposed to build administrative capacity but there had been problems of conflict of interest and administrative capacity. Those appointed to work for PMO would not be nominated but would be appointed to the DoC through advertisement to the public.

Ms Ndabeni asked if DoC as driver of Digital Terrestrial Television (DTT) had established what the total cost was for migration from analogue to digital television.

Mr Munzhelele replied that the entire migration project (2006), including the cost-benefit to clusters, stakeholders and consumers, was expected to cost R4.2 billion over a three-year period. This figure would need to be updated.

Ms Tsebe asked if the antenna would be subsidized for those who did not have money.

Mr Munzhelele replied that USAASA would explain the qualifying criteria for subsidies the following day and these criteria would be shared with the Committee.

Ms Muthambi asked if the DoC already had TV owners’ data to know how to budget for those who qualified for subsidies.

Mr Munzhelele replied that DoC did have SABC TV’s database which would indicate who were beneficiaries of social grants but USAASA would offer further detail on the issue.

Ms Tsebe asked why some households would need additional outside antennae when it was possible for households to receive signal without it.

Mr Linden Petzer, DoC Chief Director: Radio & Satellite; ICT Infrastructure, said that the ideal situation would be to do away with receiving-antennaes entirely. Unfortunately this was not possible because the Sentech network was designed for analogue television and was not dense enough for signal to provide coverage for use of indoor antennaes only. If one were to try to implement indoor for everyone, one would have to build a substantial number of costly new transmitting stations, and this would not meet timeline for Digital Migration.

Ms W Newhout-Druchen (ANC) asked for clarity on whether a sticker on the TV would distinguish whether a TV was compliant with the Set Top Box.

Mr Petzer replied that one needed to distinguish between HD compliance TV sets and Integrated Digital TV receivers. The Integrated Digital TV set would require marking to indicate that it would not need a STB but was capable of receiving the digital signal directly. All analogue TV sets, no matter how old they were, would all be capable of receiving the digital signal when using the STB.

Ms Ndabeni asked how much Black business was involved in the manufacturing of STBs.

The Chairperson added that the Committee was sensitive to policy on empowerment and the previously disadvantaged. They wanted to see diversity in terms of manufacturing and ownership.

The Minister replied that it had never been the policy of DoC to exclude Black business involvement in the ICT sector. Credible policy ensured that DoC approach was all-inclusive and used a particular strategy to involve the business community. DoC had succeeded in scoring enormous successes in the mobilisation of the business sector and had established a forum with the top ICT companies in the country, which happened to be largely White-dominated. This was a reality in the economic world in SA. They had signed a compact to strive towards the President’s call for job creation in the ICT sector of one million jobs by 2020. They had also signed a compact that by 2020 the ICT industry would be a R250 billion industry; and that the ICT industry would deliver 100% broadband and internet penetration in the country. DoC was conscious that it was dealing with the tip of the pyramid and had put in place a second plank of mobilisation whereby the Deputy Minister had engaged with the SMME sector to include ICT enterprise opportunities and 180 representatives of the business sector had subscribed to the same commitment. The third principal strand for Black business was DoC’s role in trying to accelerate the BEE Charter for ICT. The conflict between Department of Trade and Industry and DoC on the 25% versus 30% stipulation was being finalised. These strands provided the framework by which DoC attempted to bring the Black business community – Indian, Coloured and African - into the opportunity pot within the ICT sector and DoC was very encouraged by the responses.

Regarding STB manufacturing opportunities, DoC had been involved in discussions with NUMSA and the Electronics Engineering Association and a Working Group had been set up to look at the Manufacturing Strategy as it had been proposed by DoC. Their view was that DoC had a narrow approach in defining its manufacturing opportunities and DoC had re-looked at it, resulting in delays in the Manufacturing Strategy approval. Opportunities for manufacturing in the Digital Migration Programme cut across the entire value chain - from manufacturing of STBs and aerials to installations, cabling and servicing arrangements for the establishment of the STBs.

There would be a credible process of tendering for manufacturing of STBs and companies would have to tender on a competitive basis to be selected. Cabinet had stipulated that there had to be a manufacturing industrial government partnership in the manufacturing of STBs. Currently there were about four to six manufacturers who met the requirements specified in policy for local manufacturing. The arguments raised in consideration of the Manufacturing Strategy was that DoC should not define an approach which confined opportunities to only those who were established in the industry and who had a legacy but should rather open up the sector to new entrants and participants. Debate inside the DoC was on whether to expand the number of entrants from four to eight to allow for four new entrants but criteria for new entrants had not yet been defined. Skills transfer from established companies and the opportunity for partnerships to affirm new entrants would be included in the strategy so that new entrants were not hostage to those which dominated. Another consideration was that opportunity for jobs had to be decentralised so that factories were not only based in Gauteng.

The first area of difficulty was STB access control and who would own and operate the access control system. Issues were:
1. STB access control – the question of whether there was a need for encryption or not and the impact that the cost of encryption would have on the cost of the STB - a possible extra $4 per STB. DoC was discussing the issue with SABC, eTV, Multichoice and Sentech.
2. Ownership of the system of access control - discussion in the Governance Board was that ownership should be in the hands of state to ensure that new broadcasters were not disadvantaged going forward.
3. Who should operate the system of access control – broadcasters had proposed that a non-profit entity be set up with Sentech managing it.

The second major area was the Marketing and Information Campaign. Very few people in the communities knew about Digital Migration and this was as a result of a failed campaign by a contractor. DoC was putting in place a measure to implement marketing strategies and would put out a new tender for the marketing campaign.

The third major area was the question of manufacturing – the right mix and make-up of consortium to be brought into play. It was a question of lead times, supply of components and strategy towards costs-to-value chain and not just confined to the STB.

The greatest area of challenge was USAASA’s task of administration and implementation of the subsidy support scheme - identifying the poor households and having a fool-proof and fraud-proof system of distribution, guaranteeing the right beneficiary would receive the boxes that were subsidised.

On matters of policy and regulations, ICASA had an important role to play in assisting DoC to speed up the process for the regulatory environment to be more certain than what it currently was and USAASA standards had to be finalised.

Finances were available for filling the top layer of the PMO structure and DoC intended to advertise for filling of posts.

Lastly, DoC would provide the Committee with a better ‘road map’ and define each phase more clearly, with timelines, for clearer monitoring of the progress on implementation of Digital Migration.

Questions not answered:
Ms Ndabeni asked who would be responsible for the funding of the DTT project.
Ms Tsebe commented that it appeared that the number of outstanding issues were due to ‘awaiting approval’, either from DOC or the Minister. Why were these not addressed as a matter of urgency?
Ms Tsebe asked what MNet’s reasons were for objection to digital control systems.
Ms Newhout-Druchen noted that on oversight visits with Multichoice, Members found that the public were reluctant to call the call-centre as they had to use air-time. She asked if a toll-free number would be offered.

The meeting was adjourned.