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Broadcasting Regulation and BEE in terms of ECA

Broadcasting Regulation and BEE in terms of ECA. Brenda B Ntombela. Background. 2004 Position Paper – Key Elements A need to encourage greater investment Promote empowerment at all levels Ensure that commercial broadcasters operate in climate of certainty and stability.

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Broadcasting Regulation and BEE in terms of ECA

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  1. Broadcasting Regulation and BEE in terms of ECA Brenda B Ntombela

  2. Background 2004 Position Paper – Key Elements • A need to encourage greater investment • Promote empowerment at all levels • Ensure that commercial broadcasters operate in climate of certainty and stability. • Increase in foreign ownership from 20% to 25% • The Authority forwarded its recommendations to Minister of Communications • An indication was that there was a potential to change the landscape of the broadcasting industry in the country thereby creating new opportunities for the broadcasters • At the same time there was a legislative review underway which led to a promulgation of a new ECA.

  3. Background (cont...) • The Section dealing with issues related to ownership and control was transposed as is from the IBA Act, under Sections 2, 13(3)(4), 64, 65 and 66 of the ECA. • The ECA Continued to allocate the Authority powers to review and approve certain broadcasting transactions. • These would look at the impact of such transaction on the attainment of core cultural objectives and how these would affect or impact on the levels of competition in the broadcasting market • The above Sections of the ECA apply to individual licences for commercial television and radio broadcasting and subscription television broadcasting

  4. Background (cont...) • The Sections are intended to continue enabling the Authority to promote orderliness in the manner in which concentration of ownership, broadcasting and newspaper cross media ownership and foreign ownership is handled. • This will ensure the following: • fair competition in the market, • providing incentives to potential investors, • applying checks and balances to ensure that broadcasters are not controlled by the same company, and • contributing to diversity through the increased participation of various groups of South Africans in the industry

  5. Transformation and Legislative Framework • The issue of restriction of ownership and control within broadcasting was previously regulated by sections 48, 49 and 50 of the Independent Broadcasting Act (IBA). • The IBA was subsequently repealed but ownership and control finds exact verbatim expression in the Electronic Communications Act (ECA). • Section 2(g) of the ECA: “promote an environment of open, fair and non-discriminatory access to broadcasting services, electronic communication networks and to electronic communications services” • Section 2 (h) of the ECA: “promote the empowerment of historically disadvantaged persons, including Black people, with particular attention to the needs of women, opportunities for youth and challenges for people with disabilities”

  6. Transformation and Legislative Framework (cont...) • Accordingly, the Authority always strives to ensure that the statutory mechanisms for regulating broadcasting activities serve the public interest. • It is against this backdrop that sections 65(1)(a)(b)(c) and 2(a)(b) of the ECA finds expression. • Section 2(a)(b) of the ECA: • promote and facilitate the convergence of telecommunications, broadcasting, information technologies and other services • promote and facilitate the development of interoperable and interconnected electronic networks

  7. Transformation and Legislative Framework (cont...) • Section 65(1)(a)(b)(c) – Makes reference to TV Broadcasting service No person may – • (a) directly or indirectly exercise control over more than one commercial broadcasting service licence (BSL) in the television broadcasting service; • (b) be a director of company which is, or of two or more companies which between them are, in a position to exercise control over more than one commercial BSL, or • (c) be in a position to exercise control over a commercial broadcasting service licence and be a director of any company which is in a position to exercise control over any other commercial BSL. • FM – Cannot exercise control over more than two commercial BSL in the FM sound broadcasting service • AM - Cannot exercise control over more than two commercial BSL in the AM sound broadcasting service

  8. Transformation and Legislative Framework (cont...) • The legislature makes clear its intention to maintain limits of control by individuals over commercial broadcasting services by ensuring that one individual does not have monopolistic right over commercial broadcasting services. • Section 13 (3) and (4) of the EC Act provide that the Authority may restrict the ownership or control of an individual licence. • Section 13(3): “The Authority may by regulation set a limit on, or restrict, the ownership or control of an individual licence, in order to – • Promote the ownership and control of electronic communications services by historically disadvantaged groups; • Promote competition in the ICT sector.” • Section 13(3) deals with the imposition of limitations for the pursuance of empowerment of historically disadvantaged groups.

  9. Transformation and Legislative Framework (cont...) • Section 13(4): “The Authority may, by regulation, set a limit on, or restrict, the ownership or control of an individual licence for broadcasting services in order to promote a diversity of views and opinions.” • Section 13(5): “Regulations must be made – • (a) with due regard to the objects of the Act, the related legislation and where applicable, any other relevant legislation; and • (b) after the Authority has conducted an inquiry in terms of section 4B of the ICASA Act, which may include but is not limited to, a market study.” • Section 4(3)(k) of the ICASA Act: “... The Authority - • may make regulations on empowerment requirements in terms of Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)” • The provisions of section 13(5) do suggest that ownership and control is not viewed lightly.

  10. Transformation and Legislative Framework (cont...) • The process sets a more extensive process for regulation making requiring a 60 day comment period. • The recommendations for these regulations must be tabled in the National Assembly by the Minister • Section 66(5) of the ECA makes a critical point as it declares that a twenty percent (20%) shareholding in a commercial broadcasting service licence in either a television or sound broadcasting service is sufficient to constitute control.

  11. HDI Shareholding

  12. HDI Shareholding (cont...)

  13. Regulations Regarding The Processes And Procedures For An Individual Licence To Provide ECNS, ECS And Broadcasting Services

  14. Purpose of Regulations • To regulate and prescribe the process and procedures for: • amending, • transferring, • surrendering and • renewing licences

  15. Restrictions on transfer and renewal of licences • The Authority may refuse to renew or transfer a licence: • Where the Transferee’s ownership and control by historically disadvantaged persons is less than 30% • Indicate the extent to which any ownership interest referred to above is held by an historically disadvantaged person or group (including black people, women and disabled persons) or youth organisation

  16. Ownership and Management of applicant and transferee • Indicate the extent to which any ownership interest referred to above is held by an historically disadvantaged person • Indicate whether any person holding an ownership interest in the applicant holds a licence issued in terms of the Act or holds an ownership interest in any other licensee licensed to provide a service similar to that to which the application relates • Indicate the extent to which any ownership interest referred to above is held by historically disadvantaged persons.

  17. Compliance with Chapter 9 of the Act • This section is only applicable where the licence to be transferred is in respect of a broadcasting service. • Indicate whether the transferee controls a newspaper, and, if so, provide details of: • Newspaper’s circulation figures • Area in which the newspaper is distributed • Newspaper’s market share

  18. Regulations Regarding The Process And Procedures For Registration, Amendment, Renewal Transfer And Surrender Of A Class Licence

  19. Registration for a class licence to provide a community broadcasting service • Community • Where the community to be served by the registrant is a geographically founded community, provide details of the community to be served, including: • Whether the community is urban, peri-urban or rural • The number of people in the community • Gender, language, income and demographic statistics in relation to the community

  20. Registration for a class licenceto provide a community service • Ownership and Management • Provide details of all ownership interests in the registrant and the identity of each holder of an ownership interest in the registrant • Where a registrant is a juristic person, only shareholdings (or equivalent) of 5 % or more of the total issued shares (or equivalent) in the registrant are relevant.

  21. Conclusion • The Authority has conducted a study on O&C. • A discussion document on O&C will be published soon for comments. • ITA – consider issues of O&C

  22. Q & A

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