Progress Reports on the Digital Migration Policy and Implementation Strategy: briefings by the Minister, Department, ICASA, Sentech & SABC

Meeting report

The Chairperson welcomed the Minister of Communications, the members of a delegation from Japan and the representatives of the entities invited to brief the Committee on the progress made in the implementation of the Digital Broadcasting Migration (DBM) Policy.  DBM was of significant national importance, requiring substantial investment by the State.  DBM would have a significant impact on socio-economic development and the development of the information technology (IT) sector in South Africa.  The Committee had heard submissions on DBM on earlier occasions and the purpose of the meeting was to be briefed on the current status of implementation.

Introduction by the Minister of Communications
The Honourable Siphiwe Nyanda advised that the Department of Communications had prepared a comprehensive submission, as requested by the Committee.  The Department had been keeping civil society informed and had held extensive discussions with stakeholders in the sector.  He would present the briefing on recent developments and the media reports concerning the standards.

Briefing by the Department of Communications (DOC)
Mr Gift Buthelezi, Acting Deputy Director-General: ICT Policy and Mr S Manzini, Director: ICT Policy, DOC, presented the ICASA submission to the Committee (see attached document).

The presentation covered the background to BDM, the objectives of the BDM Policy, the benefits of migrating to digital terrestrial television (DTT) broadcasts, the key policy decisions taken, the key priorities identified, the establishment of the Digital Dzonga to oversee implementation, the manufacture of Set Top Boxes (STB), the formulation of the South African National Standard SANS 862 for STB’s, signal distribution and DTT broadcasting.

Mr Nyanda explained that the African continent and Europe were classified as Region 1 by the International Telecommunications Union (ITU) of the United Nations.  During the World Radio Conference held in 2006, agreement was reached that Region 1 would apply the DVB-T standard for digital television broadcasts.  Despite having some reservations, the Minister of Communications proposed to Cabinet in 2008 that the DVB-T standard was adopted by South Africa.

The DOC and Sentech proceeded with the implementation of DBM and conducted trials.  The target date of November 2008 was set for Sentech to commence with dual illumination (i.e. broadcasting in both analogue and digital format).  Sentech had invested in providing the infrastructure required, based on the DVB-T standard.

The DVB-T standard had evolved because of the limitations of the original standard and technological developments.  A new standard was formulated, i.e. DVB-T2.  Japan and Brazil had developed the ISDB-T standard.  The ISDB-T standard was open-sourced, could be adapted to local requirements and no royalties were payable by countries making use of the standard.

The DOC visited Brazil to investigate, briefed the Minister and suggested that the standards applicable to DTT broadcasting were reviewed with the participation of the affected State-owned Entities (SOE’s) and the broadcasting industry.  A symposium was held at which delegates from Europe, Japan and Brazil presented the three standards.  There was little difference between the standards.  Most of the differences concerned technical issues such as mast coverage and mobile television capability.

A Southern African Development Countries (SADC) Ministerial Conference was held in May 2010.  The issue of the standards was discussed and the Ministers were briefed on the features of the three standards by the representatives from Europe, Brazil and Japan.

The decision was taken to appoint a task team to conduct an investigation into which standard would be best suited for the region, was most compatible with the existing systems of the SADC countries, was best able to deliver on the developmental objectives and would best benefit socio-economic development.  The task team had to consider the extent of the investment that had already been made by stakeholders, in particular Sentech.  The investigation was expected to be completed within two months.

Regardless of which standard would be adopted, certain changes would be necessary.  The DOC wanted to ensure that no South Africans would be prejudiced and would be able to enjoy the maximum possible benefit.

Discussion
Mr N Van den Berg (DA) questioned why the standards were being reviewed at this late stage in the process.  He understood that Sentech had been working with the DVB-T standards, which operated at 8 MHz but the ISDB-T standard operated at 6 MHz.  He wanted to know what the cost of changing to the ISDB-T standard would be.  He understood that the cost of STB’s would be higher if the ISDB-T standard was adopted and that the retail price of the STB’s had not yet been determined.  If the STB’s were too expensive, it would have a major detrimental effect on the poor.  He felt that the decision to review the standard was a regression and had caused the digital migration process to be halted.

Mr Nyanda replied that South Africa had not yet formally adopted a standard.  The task team was merely reviewing the standards to determine which one made the best use of the broadcasting frequency spectrum and which standard offered the best financial benefits.  He had not yet informed Parliament and was waiting for the report on the results of the investigation.  He wanted to ensure that the best decision was taken for the long term and that South Africa was in a position to utilise its considerable marketing power.

Ms P De Lille (ID) objected that the Members of the Committee had received the briefing documents immediately prior to the meeting and did not have sufficient time to study the information provided.  She suggested that the Committee invited the representatives from Europe, Japan and Brazil to brief the Members on the aspects of the various standards and that a framework was developed that included the costs, technology and STB requirements to assist the Committee to make an informed decision on which standard would be best.  She asked if it was compulsory for South Africa to adopt a particular standard and what the implications were if South Africa did not comply with the ITU agreement.

Mr Nyanda repeated the reasons for the decision to review the standards.  He advised that it was not compulsory for South Africa to adopt a particular standard but there would be certain constraints, for example the entire region should apply the same standards to ensure that there would be no interference with broadcast signals.

Mr E Kholwane (ANC) referred to the comments made by various stakeholders in the submissions made to the Committee.  The stakeholders had made financial investments in testing and in developing the infrastructure for digital migration. He was concerned over the additional costs that would be incurred if the applicable standard was changed.  He asked if the target date of November 2011 would be affected.

Mr Nyanda conceded that the target date would be delayed and suggested that ICASA provided a more detailed response to the question.  He pointed out that there were many other factors that had an impact on the target date.  Any change of standard would have to be approved by the Cabinet as well.

Ms J Killian (COPE) noted that half of the dual illumination period had already expired.  The Minister had indicated that implementation would be delayed and other interested parties had expressed doubt that the target date of November 2011 would be reached.  She asked what the cost implications were of changing the standard and how much had been spent to date on using the DVB-T standard.  She requested what was meant by the “developmental needs” of the SADC region.  She felt that South Africa could not afford to waste any resources and should stick to the standard that had been adopted.  She failed to understand why the adoption of a different standard was even contemplated and wondered about the justification for considering changing to the ISDB-T system developed by Japan.  She asked the Minister to provide sound reasons for considering changing the standards.  DBM was important and had to benefit all South Africans.

Mr Nyanda agreed that the target date would possible be changed and repeated that there were other factors applicable as well.  He had been informed by several stakeholders that the target date of November 2011 was unrealistic.  Implementation dates in other countries had been postponed.  He was adamant that the Ministry be allowed the opportunity to conduct a proper investigation and considered all the aspects.  In any event, the DVB-T2 standard currently applicable differed from the DVB-T standard adopted.  He expected that there would be challenges regardless of which standard was ultimately adopted.

Mr Nyanda agreed that Sentech had made a significant financial investment in infrastructure.  The expenditure already incurred was an important consideration.  Adopting a different standard might not have substantial cost implications as only software changes might be necessary and the infrastructure already in place could be used.  Many other standards have been developed and had to be considered when deciding which would be the best option for South Africa.  The task team was merely reviewing the standards had the decision to adopt another standard had not been made.  He expected that there would be s certain degree of dissent from stakeholders.

Mr Nyanda advised that there were different types of STB’s available and certain models were not expensive.  The Ministry took the South African sector into account and had to consider what would benefit the consumer the most.  The cost of STB’s was a major consideration as the boxes would be subsidised by Government.

Ms F Muthambi (ANC) asked for clarity on what progress had been made to date.  She wanted to know what progress had been made by ICASA on the regulations for satellite broadcasts and broadcasting hubs.

Ms R Morutoa (ANC) agreed that there was a need to review the standards.  She referred to the Digital Dzonga and reported that she had found that most people were not informed of what would happen if the analogue signal was switched off.  She wanted to know what mechanisms would be utilised to inform the populace.

Mr Buthelezi conceded that the activities of the Dzonga had been limited and agreed that much remained to be done.  The DOC had commenced extensive engagement with civil society and the industry on the technical requirements of DBM.  A wide-spread campaign would be necessary, similar to the campaigns launched to create awareness of the FIFA World Cup and Y2K.  The Dzonga would utilise the facilities of State-Owned Entities, the South African Post Office, clinics and police stations.

Briefing by the Independent Communications Authority of South Africa (ICASA)
Mr Paris Mashile, Chairperson, ICASA, introduced the delegates from ICASA.

Mr R Nkuna, Councillor, ICASA, presented the briefing to the Committee (see attached document).

The briefing by ICASA dealt with the current status of television services in South Africa, the objective of the Broadcasting Digital Migration policy, South Africa’s international obligations, the digital terrestrial television implementation plan, the regulatory framework for BDM and DTT, the Radio Frequency Spectrum Plan for DTT, the manufacture of Set Top Boxes and the time frames for implementation.

ICASA was the industry regulator and was responsible for implementing Government policy but the necessity to comply with the international agreements was emphasised.

Discussion
Mr Van den Berg found the presentation by ICASA more convincing than the argument put forward by the Minister.  It was apparent that a great deal of work had already been done and he remained doubtful that it was even necessary to review the standards.  There were clearly implications if a different standard was adopted, for example the manufacture of STB’s.  It would be necessary to start the entire process from the beginning if a new standard was adopted.  He asked how ICASA’s implementation plan would be affected. He wanted to know if ICASA favoured one of the standards over another.

Mr Mashile explained that ICASA was the regulator and was technologically neutral.  The Geneva 06 Agreement (GE06) required a common technology to be used in Africa.  ICASA did not recommend that South Africa deviated from the other countries in the region.  South Africa had agreed to GE06 and it was highly undesirable to violate international agreements.  Any standard or technology utilised by South Africa had to conform to the GE06 agreement.

The Chairperson requested clarity on the ITU agreement as the DOC had stated that the agreement had not been ratified by Parliament.

Mr Mashile explained that all the countries in the ITU Region 1 had met, discussed the standard that would apply and made an agreement to use the DVB-T standard.  A country did have the right to add a footnote to the agreement if the country chose to deviate.  If a country deviated from the agreement, there was no guarantee that broadcast signals would not be subject to interference.  If there was interference with broadcast signals, chaos would result.

Ms Killian thanked ICASA for a sober and factual presentation.  South Africa’s status in the geographical region had to be taken into consideration.  She thought that it would be grossly irresponsible if South Africa deviated from the GE06 agreement and criticised the DOC for giving the Minister unconsidered advice.  Many countries would be affected if South Africa applied a different standard and it would be a major problem if South Africa was isolated from the rest of the region.  She regretted that the Minister had left the meeting before listening to the briefing by ICASA.  She was aware of the tactics used by lobbyists but felt that the ISDB-T standard had not been proven to be better than the DVB-T standard.  She was suspicious of the motivation for considering a change to the standard originally agreed upon.

Mr Kholwane pointed out that the DVB-T standard had been adopted by the Cabinet and therefore there could be no disagreement over which standard was applicable.  ICASA had indicated that there were options available if South Africa wished to opt out of the original agreement.  The Minister had reported on the consultations that had taken place with the other SADC countries.

Mr Mashile advised that ICASA had participated in the discussions held by the DOC and SADC concerning the European, Japanese and Brazilian standards.  ICASA’s only requirement was that South Africa remained within the parameters of the GE06 agreement.  The DVB-T2 standard included an upgrade of compression techniques, which allowed for greater utilisation of the spectrum and made more channels available.  There were few technical differences between the two parameters.  He suggested that a detailed cost-benefit analysis was done.

Ms W Newhoudt-Druchen (ANC) asked if DSTV broadcasts would be affected and if DSTV clients would need an STB in addition to the DSTV decoder.  She understood that the new generation of television sets did not require an STB.

Mr Mashile explained that the STB converted digital broadcast signals to analogue and made it possible for older television sets to receive digital signals.  The new generation digital-enabled television sets (high-definition TV) were comparable to computers and no STB was required.  High-definition television was spectrum-hungry and required greater bandwidth.

Mr Nkuna explained that the ITU did not demand that agreements were ratified.  Each country had its own ratification processes.  The GE06 agreement was not ratified by the South African Parliament but the ITU accepted any type of agreement.  DSTV was a satellite transmission and not a terrestrial television broadcast.  DSTV transmissions were already in digital format.

Ms S Tsebe (ANC) asked for further details of the compression techniques provided for in the DVB-T2 standard.  She wanted more clarity on the implications if the applicable standard was changed.  She observed that ICASA had implied in the briefing that the Minister’s thinking was not in line with the GE06 agreement and wanted to know to what extent ICASA had participated in the discussions that were held.

Mr Mashile explained that DVB-T2 included an Advanced Video Coding (AVC) feature, which allowed for more channels to be available.  He stated that ICASA did not differ from the Minister and the DOC but agreed with the observation made by Mr Kholwane that only one standard had been agreed.  He reiterated the Minister’s statement that the task team was merely reviewing the standards and that no decision had been taken to adopt a different standard.  Although ICASA and the DOC did not always agree, the two organisations worked closely together. The DOC was fully aware on ICASA’s position concerning adherence to international agreements. ICASA could only provide information, which can be used by the Committee to reach a conclusion.

Mr Nkuna pointed out that the Minister was the custodian of policy.  ICASA had to implement policy decisions.  If the policy changed, ICASA had no choice but to apply the new policy direction.  He suggested that the Committee verified if the GE06 agreement was valid and clarified the issue with the Minister.

Ms Morutoa was uncertain if it would be a problem if the GE06 agreement was not ratified by Parliament.

The Chairperson explained that certain international agreements and protocols had to be ratified by Parliament.  The GE06 agreement had not been formally ratified and it would be necessary to determine if Parliamentary ratification was required for the agreement to be valid.  He understood that the ITU considered acceptance of the agreement to be sufficient.

Mr Kholwane understood that the DOC and Sentech would be meeting on Friday, 4 June 2010 in an attempt to resolve the problems concerning the infrastructure provided by Sentech that did not conform to the ICASA regulations.  He noted that the DTT regulations had been issued.  He suspected that the reason for the review of the standards was based on political rather than practical considerations.  The entire process needed to be followed through to ensure that all parties benefited from the BDM process.  He asked if the current deadline of November 2011 would be met.

Mr Mashile advised that testing was still underway and STB’s were not yet commercially available.  Everything depended on the STB’s being widely available before analogue broadcasts could be discontinued. The minimum cost of a digitally-enabled television set was R5,000, which was not affordable by most people.  The dual illumination phase had not commenced.  The interim target dates were already exceeded.  The implementation date of digital broadcasts was extended by the United States of America and Brazil as well.  There were major negative social and economic consequences if everything was not in place and a significant portion of the population was unable to receive television broadcasts.

The Chairperson asked how long it would take to be ready if a new standard was decided upon.

Mr Mashile estimated that an additional period of six months would be required but the timeframe would be affected by the extent of the changes.

Mr Nkuna pointed out that the systems of the neighbouring countries had to be in line as well.  All stakeholders had to be involved in determining the timeframe for implementation.

Briefing by the South African Broadcasting Corporation (SABC)
Ms P Nzimande, Chief Procurement Officer, SABC introduced the delegates from the SABC and advised that the Corporation had been actively involved in the DTT implementation process.  The presentation to the Committee included the experienced gained to date.

Mr Yusuf Nabee, DTT Project Leader, SABC presented the submission from the SABC (see attached document).

The briefing by the SABC included the five critical success factors identified, i.e. more channels, the affordability of Set Top Boxes, education and marketing, customer support and coverage.  The presentation explained the DTT value chain, the phases of the digital migration process, the pilot programme undertaken by the SABC, the lessons learnt from the pilot programme, the impact of delays in implementation and the critical issues that had to be resolved prior to the implementation date.

Mr Zweli Mthembu, Advisor, SABC expressed concern over the threat to the financial viability of the SABC if the implementation of DTT was delayed.  The SABC already faced increased competition from other broadcasting entities.

Discussion
Ms De Lille understood that STB’s would be manufactured in South Africa.  She asked which STB’s were used in the pilot project, where the STB’s were manufactured and what the cost of the STB’s was.  She wanted to know if the timeframes included the manufacture of STB’s, which had been identified as a key factor in the implementation of DTT.

Mr Nabee advised that STB’s were being manufactured by two South African companies.  The STB’s were in accordance with the DVB-T standard and the cost of the STB’s used in the pilot programme was R700 each.  The STB’s had to conform to the SANS 862 standard developed by the South African Bureau of Standards (SABS).  He understood that production for retail purposes could commence within six to nine months.  The STB’s were not yet available for retail purposes.

Ms Newhoudt-Druchen asked for more information on the pilot project.  She asked what services would be available and were tested.  She wanted to know what services for disabled persons were included.  She remarked that there was a problem with receiving television signals in certain remote areas of the country, for example the Northern Cape, and asked why the pilot project was not tested in remote locations.

Mr Nabee confirmed that the pilot project included services for disabled persons.  Extensive research had been conducted into the requirements of disabled persons and the feedback received had been taken into consideration.  Certain services were tested during the pilot project.  DTT offered more services for disabled persons, for example multiple sub-titles.

Mr Mthembu offered to provide a copy of the report on the pilot project to the Committee.  He conceded that the spectrum in the Northern Cape was limited as a result of financial constraints.

The Chairperson asked if the pilot programme would have to be repeated if the standard was changed. He asked what the SABC would need to do if a different standard became applicable and what length of time would be required.

Mr Mthembu replied that all depended on the nature of the changes required.  The results of the task team review were required before the implications could be determined.

Ms Morutoa asked if the SABC had informed the Minister of the results of the pilot project.  She wanted to know how the manufacturers of the STB’s were appointed.

Mr Nabee confirmed that the report on the pilot project was submitted to the DOC.  The SABC was submitting regular progress reports as well.  The appointment of the STB manufacturers was made after following the prescribed tender processes.

Briefing by Sentech
Mr Qurash Patel, Chairperson, Sentech introduced the delegates from Sentech and gave an overview of the purpose and objectives of the submission.

Mr Dingane Dube, Sentech presented the briefing by Sentech (see attached document).

The briefing covered the utilisation of the funds made available to date (R625 million of the total allocation of R1.3 billion), the regulatory, technological, commercial and financial challenges, the mitigating factors applied and the progress made to date.  Currently, coverage was provided for 33% of the population and Sentech planned to increase coverage to 60% by March 2011.

The presentation highlighted the differences in the interpretation of the relevant provisions in the Electronic Communications Act and the Sentech Act between ICASA and Sentech.  Sentech was perturbed by the implications of the regulations published by ICASA, which differed from the standards applied by Sentech for the infrastructure already provided.

The presentation was concluded with a summary of the achievements to date and the outstanding challenges.

Discussion
Mr Van den Berg expressed concern over the differences between Sentech and ICASA.  He did not understand why the two entities had not communicated with each other and resolved the issues.  The implementation of BDM was of national importance and Sentech had only managed to achieve a 33% coverage rate.  He felt that the situation needed to be resolved as a matter of urgency and asked what Sentech planned to do about the matter.

Mr Dube explained that Sentech had requested the frequency plan from ICASA in 2007, when Cabinet had determined the target date of November 2008.  Sentech was advised by ICASA that the Authority was unable to assist as a policy had not been formulated.  Sentech subsequently made a written submission to the Minister to request his intervention, as access to the frequency plan was essential if the target date of November 2008 was to be met. 

Mr Patel advised that the DOC was facilitating a meeting on 4 June 2010 in an attempt to resolve the issues.

Ms De Lille observed that the matter extended beyond a mere disagreement between Sentech and ICASA.  It would appear that the legal interpretation of the ECA and the Sentech Act differed between the two entities.  The matter could have been referred to the court for adjudication.  Sentech can not assume that the ICASA interpretation was incorrect because of the impact on Sentech.

The Chairperson understood that the infrastructure provided by Sentech was found not to conform to the regulations subsequently issued by ICASA.  He asked what the implications of non-conformance were.

Mr Kholwane commented that if there was a problem with the interpretation of the applicable legislation, the Acts could be amended if necessary.  SOE’s were required to carry out Cabinet decisions and policies.  Sentech had started to provide infrastructure before the policy and regulations were finalised and found that the requirements differed from what was anticipated.  The DOC could not be expected to take responsibility for the problem between Sentech and ICASA.  He asked how much would have to be spent changing the infrastructure already in place to conform to the requirements. He was concerned over the continued financial viability of Sentech.

Mr Patel explained that the ICASA plan required additional sites, which would require additional capital expenditure.  He suggested that the plan developed by Sentech was retained.

Mr Dube added that the BDM policy required Sentech to comply with a different model than was originally developed.

Ms De Lille understood that Sentech’s problem was the result of proceeding with the infrastructure before the policy and regulations were finalised.  Sentech found that the infrastructure was non-compliant when the regulations were issued and should have informed Parliament at the time.  It was essential that a solution was found to resolve the issues as legislative amendments could not be applied retrospectively.

The Chairperson said that the problem could not be solved during the meeting.  It was an important issue and Sentech had to comply with any standard that was adopted.  He suggested that the Committee awaited the outcome of the meeting between the DOC, Sentech and ICASA scheduled for 4 June 2010.  He thanked the delegates for their participation in the briefing to the Committee.

The meeting was adjourned.