The silliness of policy silos: broadband and broadcast in South Africa.

Guy Berger, Rhodes University, Grahamstown, 6140, South Africa

Email:

Abstract

South Africa pretty much operates parallel universes in terms of broadcast and broadband policy and practice. The connections between these electronic communications arenas are mainly limited to seeing how the migration to digital broadcasting can free up spectrum for wireless broadband, and – to a very limited extent – how broadcasting can use broadband as another platform to reach audiences. The silos have prevented recognition of how broadcasting itself as a unidirectional information system changes once its audiences can communicate back to it, and they have left hidden the way that digital broadcast can also directly help facilitate broadband in terms of providing a connectivity download delivery path (i.e. a hybrid of broadcast and broadband communications). This paper tracks the history of these developments and attempts to explain why illogical policy and practice has come into being. It argues that a narrow conception of the Information Society, and government’s elevation of “managed liberalisation” as the related policy framework, along with reasons of politics and institutional bureaucracy, are at the heart of the problems.

1. Introduction:

“Do broadband networks raise new regulatory challenges that required new regulatory frameworks or are existing frameworks satisfactory?” This question was posed, rhetorically, by Gillwald a decade back (2001: 14). The converse question can also be posed: does digital broadcasting raise new challenges for communications policy and practice? Prima facie, the answer is that each development represents a major shift from analogue communications, and in fact the bigger question to ask therefore is whether the common fact of digitisation in each formerly distinct sphere means that the envisioned transition ought not to have prompted a holistic planning of new policies and regulatory practice altogether. As Gillwald (2003) noted, the role of the communications sector in a networked economy requires a high level of policy co-ordination. The reality, however, has been otherwise, as demonstrated in this paper.

De Lanerolle (2011) proposes that policy division in South Africa between broadcasting and what he calls “telecommunications” (subsuming internet in this) reflects a difference in the public interest ‘‘rationales’’, with the former domain attracting largely social and political regulation, and the latter primarily economic (see also Gillwald, 2003). Although this distinction alone does not wholly account for the extent of the policy field dichotomy, there is some merit in this view. On the ground, the disconnect is reinforced as a consequence of the way that private sector-led dynamism predominates in broadband provision (especially wireless), while there is state-driven change in the broadcasting space. Yet, the government has had a strong social rationale in its telecommunications policy (see Horwitz, 2000), and more to the point, the central authorities should least should have an overview of both transitions – and the interconnect between them. However, the reality is that while substantial policy attention and public resource is being mobilised for the move to digital terrestrial television (DTT), there is very little in this change about how it might relate to telecommunications and especially to broadband internet service provision. The converse equally applies: there is very little in the broadband policy (and related state-spending) that takes cognisance of the DTT developments.

There has been a failure of vision broadly on this issue. On the one hand, broadcasters themselves have not shown much interest in using DTT to do anything more than deliver video content, i.e. they have been slow to recognize, at least in public, the potential to transform themselves into multiple information and communication media players more broadly. Little thought has been evident about ideas like delivery of data services (for instance, copies of Wikipedia to each set-top box being availed by SABC), and even less into the interactive possibilities (including for example, VoD requests and transmissions, or stimulation and rebroadcast of User Generated Content (UGC)). On the other hand, the telecoms and internet service provider players have been conspicuously absent in regard to lobbying for the basic set top box (STB) specifications including both software and hardware that would allow for an open user Application Program Interface (API) and a sim-card based modem that could enable the boxes to become smart and connected devices. At root, it is the responsibility of a government to provide the leadership that would bridge unco-ordinated initiatives, and this is where the silo-ization of policy can be pinpointed as the deus-ex-machina of missed opportunities.

Explaining the extent of this, and how it all this came to pass, is the objective of this paper. It utilises a general political economy approach around policy to do so, as well as drawing on institutional theory. Various statutory policy documents and news reports are the materials of analysis. It is important to keep cognisant of the methodological limitations of drawing policy and practice conclusions solely from published documents and statements, but this qualification does not necessarily exclude salient points from being put forward. In this regard, the review suggests that the government’s so-called policy of “managed liberalisation” is deeply implicated in the silo-ization of policy.

2. South Africa and the Information Society

South Africa is a country whose government has seen itself as a leading proponent of Information and Communications Technologies (ICT) even prior to the World Summit on the Information Society. For example, it embraced the associated paradigm with earnestness by hosting the Information Society and Development (ISAD) conference in 1996 (see Van Audenhove, 2003; Van Audenhove et al, 2003). Subsequently, then-president Thabo Mbeki set up a group of global ICT leaders that met annually to advise on policy and strategy. He also created the Presidential National Commission on ISAD, as a unit attached to the Department of Communications. The PNC-ISAD’s mandate has been to develop a national ICT vision and to integrate ICT initiatives across government – although its performance has been rather low-key. The thrust continues, with the Department of Communications (DoC) convening an “Information Society and Development Multi-stakeholder Forum” from 31March to 1 April 2011. The DoC Strategic Plan 2011-2014 lists amongst its key strategic pillars that of “building a people centred inclusive Information Society and Knowledge-Based Economy”. [1] And in 2011, the ITU nominated current president Jacob Zuma to receive the World and Information Society Award for South Africa’s role in using ICT as a tool for ensuring rural development and bridging the digital divide. In announcing this, the South African Minister of Communications, Radhakrishna Padayachie, stated: “I also wish to take this opportunity to state our commitment to the Declaration of the World Summit on Information Society concluded in Geneva and Tunis and adopted by Heads of State and Government in 2005. We are indeed committed to work towards the establishment of a people centred, inclusive information society, turning the digital divide into digital opportunity.”[2] He went on add: “We recognise that we still need to do more by delivering more infrastructure and efficient ICT services to our people. It is estimated that about eight percent of our people do not have access to television and radio. In addition, internet penetration remains low at about 10 percent. We have committed ourselves to increase our broadband penetration from 2 percent to 15 percent by 2019.” The notion of Information Society here is a wide one, but does not explicitly prioritise communication-enabled citizenship as distinct from information-empowerment. This view has repercussions in the sense that broadcasting as an informational medium has been given preferential attention in terms of policy and practice, in comparison to broadband as a communicational medium. As will be seen, this preference has been evident in the timing of policy development (broadcasting first, broadband second), and the resourcing made available to these two components of the Information Society.

While addressing both broadcast and broadband issues in the remarks cited above, Padayachie’s ministry nevertheless has a history of treating these as separate matters at many levels. But at one level, the Department of Communications has operated across all spheres with a singular approach – which it calls a “policy” of “managed liberalisation”. This label and its claimed status as a policy appears to have originated around 2001 in the cluster of ministries dealing with economics and investment, and was proposed in regard to telecommunications by the then Minister Ivy Matsepe-Casaburri the same year. (She added, on a different occasion, that this approach was provided for within the 1996 Telecommunications Act).[3] Even from this early stage, however, one observer remarked in 2001 that “… the policy debate has begun to illustrate the uncoordinated efforts by various government departments to develop a national ICT framework.”[4] This point is not necessarily incompatible with the fact nevertheless that “managed liberalisation” began to characterise the ministry’s general approach to the communications landscape – often with more of an emphasis on the management side, rather than the liberalisation part of the equation. A common approach does not automatically translate into a co-ordinated or integrated one, especially if it is a problematic approach as this one is. Rather than being an elaborated policy, “managed liberalisation” has served more as a mantra to justify an ad hoc treading a fraught path between, on the one hand, government controlling the ICT sector completely, and full-scale privatisation on the other (see Berger, 2010). Notwithstanding this role in the politics of policy rhetoric (rather than substance), the phrase does nevertheless characterise a common governmental approach that has spanned at least a decade of both broadcasting telecommunications/internet policy and practice.

On the “managed” side of the coin, the state has retained significant ownership and control of what have historically been the largest players in each sector – the SABC (dominant broadcaster), Telkom (dominant fixed line operator) and Sentech (dominant signal distributor). It has also instituted various forms of protectionism to safeguard the viability of these institutions, describing them as key levers for government programmes within their respective sectors. This stance has corresponded with the rise of “developmental state” thinking within government, an approach that departs in some respects from the neo-liberalism implicit in the early GEAR (Growth, Employment and Redistribution), the strategic path initially advanced by the Mbeki administration (see Horwitz and Curry, 2010).

Thus, only in 2011 did the government eventually allow the expiry of its “golden share” in part-privately owned Telkom, although first having appointed a new chair to head the board of the company. In 2010, the government also stood surety for a huge commercial loan obtained by SABC (a corporatized entity in which the state is sole share-holder). This was after the broadcaster had come close to bankruptcy as a result of politicisation and mismanagement. Other interventions operate through various statutory bodies. One is the Universal Service and Access Agency of South Africa (USAASA, which is funded out of levies on telecoms licencees, and since 2009, also on broadcast licencees). Another body is the (relatively autonomous) Media Development and Diversity Agency (MDDA), which funds small broadcast and print ventures, via a public-private partnership. A third structure is Broadband Infraco, a state-owned enterprise set up to provide wholesale broadband to underserved markets (via supplying the privately-owned second fixed line operator Neotel). There are also several government programmes that seek to promote e-schools and e-skilling.

On the “liberalisation” side, the government has also permitted fairly extensive private sector and non-governmental activity in both broadcasting and telecommunications markets, including part privatisation in regard to Telkom and selling off some SABC radio stations in the 1990s. Private and community broadcasters have flourished within a regulated environment. Telecoms and internet companies have been less regulated (eg. with regard to interconnect charges), but were constrained right up till 2010 by having to utilise Telkom’s infrastructure. These “liberalised” developments and subsequent ones have been presided over by the Independent Communications Authority of South Africa (ICASA), a licensing and regulatory body whose council is nominated through a parliamentary process rather by than the executive arm of government, and which operates relatively autonomously although within broad government policy priorities. This dispensation has seen SABC retaining a national monopoly on radio licences, but having to face one national competitor (privately-owned e.tv) in the television space as well as numerous local/metropolitan commercial and community radio outlets. In 2006, the finally-licensed Neotel became the second national operator of fixed line services (competing with Telkom). Three mainly privately-owned cellphone networks compete with Telkom which launched its own wholly-owned service only in 2010. The private cellphone networks now constitute the biggest Internet Service Providers (ISPs) in the country. Thousands of other ISPs (some of them wireless) have been licensed, and one went to court in 2010 to successfully win the right for the sector to self-provide their connectivity infrastructure, rather than be hostage to Telkom – even though government had strongly resisted this scenario.

The “managed liberalisation” approach has been justified partly as a way to deal with market failure which wholesale liberalisation is deemed to entail (Gillwald 2007, Berger 2011). Accordingly, Telkom was granted a monopoly on fixed-line services for five years after being part-privatised, on the basis that it should roll out landlines to underserved areas. Although well-intentioned, the initiative failed – with communities being connected, and then disconnected for non-payment of services on the then monthly-subscription post-service payment model (Gillwald 2005, 2007; Horwitz and Currie 2010). Another failed initiative has been using USAASA funds to subsidise emerging black-owned companies to supply rural areas with telecoms services (Comninos et al 2010). Initiatives at provincial level such as the Gauteng Blue IQ have also run into problems of cost, maintenance and security of equipment and connectivity.

However, government’s “managed liberalisation” approach has not been revised in the light of such “state failure” experiences. Thus, for example, state-owned Sentech remains the government’s preferred (and subsidised) vehicle to roll out digital broadcast infrastructure, and the company even announced a plan in 2011 to become a major wireless ISP (despite the collapse of an earlier service it offered) – with the apparent support of its principal, i.e. the government. At the same time, government has maintained its record of continuously seeking to increase its direction of private sector activity in both broadcast and telecoms spheres. This record dates back even to the original merger of two prior separate regulatory bodies to create ICASA in 2000, when the government sought to do so along the model of the telecoms body – which involved direct governmental appointment of the regulatory council (unlike the broadcasting counterpart authority, which was insulated by parliamentary involvement). Although this position was blocked by civil society and industry opposition, the new regulator was still set up to allow for far greater intervention by government in telecommunications, as compared to the licensing of broadcasters.[5] Subsequently, government has also regularly sought to increase its powers over broadcast regulation. In 2008, it drafted legislation to give it greater control of the regulator as a whole, and it succeeded in gaining some greater leverage in this regard. This was through replacing presidential appointment power with that of the minister (in regard to the ICASA council), and through instituting a performance management system to be controlled by the minister. The ICASA Amendment Bill in 2010 would have seen direct ministerial powers in the appointment of the Complaints and Compliance Committee of the council. In 2009-10, a draft bill on public service broadcasting would have given the minister substantial power over the SABC and community broadcasters but this was withdrawn after significant social opposition. The government-appointed Film and Publications Board meanwhile has come to embrace regulation of online content as part of its remit.