The Funding of a Public Service Broadcaster in View of Competition: A South African Perspective

Author:Matome Boaz Masuku
Position:Department of Mercantile Law,UNISA

This paper was originally published in Kierkegaard, S. (2009) Legal Discourse in Cyberlaw and Trade.IAITL.

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1 Introduction

Public service broadcasting, particularly television, is designed solely to improve the lives of the members of society (Tracey, 1998). It informs and gives feedback of all the activities to society. As a result, it is not only a platform for communication and the exchange of ideas, but also a way of influencing the public and developing the community. The Broadcasting Act 4 of 1999 provides for a charter which governs the public service broadcaster.

In view of the mandate given to the public service broadcaster (SABC or South African Broadcasting Corporation), the question is whether the current licensing and funding scheme will enable the public service broadcasters to survive the competition from other commercial broadcasters. This paper is inspired by the financial status of the SABC, the manner in which it is funded and the presence of competition within the broadcasting industry.

2 Public service and commercial broadcasters

Broadcasting in South Africa is regulated by a governing body (ICASA) established by the Independent Communications Authority of South Africa, Act 13 of 2000 as amended (ICASA Act). A broadcaster must be in possession of a broadcasting licence issued by ICASA before it can provide such service (s 4(5) of the Broadcasting Act). The licence can be for public (which is limited to the SABC), commercial, or community broadcasting services (s 5(1) of the Act). Further, ICASA prescribes the content or programming which may be broadcasted by both public and commercial broadcasters (Skinner & Limptlaw, 2009).

3 Forms of Funding

In terms of section 10 of the Broadcasting Act, public service broadcasting may be funded by revenues from advertising, sponsorships, donations, state grants and television license fees. This section enables the public service broadcaster to use all possible avenues to fund its services. Commercial broadcasters may draw their revenues from advertising and sponsorships. However, their main source of funding is advertising. So, both the Page 100 public service and commercial broadcasters need advertising revenue to fund their programming and broadcasting services.

3. 1 State Funding

In addition to any other method of funding the public broadcaster, a state grant is also available specifically to fund educational programmes and certain specified projects. However, the state grant constitutes only 2% of the public broadcaster's revenue (Mawson, 2009; Qunta, 2009). This pressurizes the public broadcaster to be more dependent on other methods of funding.

3. 2 Television License Fees
3.2. 1 The Position in terms of the Broadcasting Act

In terms of section 27 of the Broadcasting Act, no person can buy/own/possess or use a television set unless that person is in possession of a valid television license. A television set is defined as a device designed or adapted to be capable of receiving a broadcast television signal, including a personal computer fitted with a television tuner card, and a video cassette recorder (VCR) connected to a monitor or television screen (section 1 of the Broadcasting Act as amended). A television license fee is payable regardless of how the television set is used. However, a person is exempted from paying a television license fee if his or her television set is denatured (meaning that the tuner of the television set is removed so that it does not receive a signal). In fact, a television license fee is payable even if the television set is not used at all. Besides, a television set can be used for many things other than to watch public service broadcasting or to receive a television signal. This provision is so broad to ensure that everyone who possesses a television set pays a television license fee. However, there are circumstances under which a person will not be obliged to pay a television license fee.

3.2. 2 Exemption from Paying a Television Licence Fee

A person is exempted from paying a television licence fee if his or her television set is denatured. However, it is uncertain whether a High Definition (HD) Personal Video Recorder (PVR) Digital Satellite Television (DSTV) subscriber who uses a computer monitor to watch DSTV channels will be liable to pay a television license fee or not. The same applies in respect of a cellular phone pay television offered by Vodacom to Vodacom subscribers (cellular network provider). Further, since South Africa is migrating from analogue to digital television (Mochiko, 2009), after 2011 owners of analogue television sets will not be able to receive a television signal (except DSTV subscribers). They will have to purchase a set-top box (STB) in order to receive a digital television signal from the public service broadcaster. The big question is, will the analogue television set users who did not buy a STB be obliged to pay a...

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