The Digital Migration ruling - who really won?

The Court of Appeal has finally made its ruling on the digital migration issues.  Unfortunately, the actual ruling is not yet available online, but on reviewing the earlier ruling that led to the appeal and the media reports on the same, one can be sure that some earth-shaking precedent has been set by the Court of Appeal.

You may wish to go through our earlier discussions on the real issues behind digital migration, just to get up to speed with the issues.  But in summary, the government has been trying to migrate TV viewers from the current analogue system onto the newer and better digital TV system.

The market structure for digital TV transmission required that one or two players are licensed as Broadcast Digital Signal (BSD) distributors while the rest generate the TV content to be relayed by the digital signal distributors. The regulator, Communication Commission of Kenya, now Communication Authority of Kenya (CAK) had already issued the signal distribution licenses to Signet (subsidiary of KBC) and PANG (a Chinese firm) towards this objective.

With the two signal distributors in place, the government through CAK ordered that all analogue transmission be switched off and their corresponding digital content be channelled through the two entities, Signet and PANG. The three leading media houses objected. To drive the point home, they switched off their analogue transmission without offering their content to the digital distributors and subsequently petitioned the courts accordingly.

The High Court dismissed their petition, forcing the media houses to move to the Court of Appeal. In a fairly surprising judgment to both contenting parties, the Court of Appeal seems to have granted the media houses all their prayers and gone further by finding that the regulator, CAK as currently constituted is not the body expected to regulate broadcasting matters.  The constitution requires an independent body. CAK, given the heavy presence of government appointees on their board is considered not to have met the threshold of independence.

Whereas that may be true, the other finding is rather perplexing. The Court of Appeal found that given the heavy investment the media houses have made in the sector, they are entitled to being issued with a digital signal distribution license to distribute their digital content. In a classic biblical case of those who have being given more, the court seems to have tilted towards competition in favour of incumbent players at the risk of stifling competition.

OVERSTEPPING MANDATE

From the media reports, it seems the court went further and ordered that the regulator issues the media houses with the said signal distribution license while revoking the one issued earlier to PANG. This has caused a stormy debate on one of the local ICT online forums, with analysts wondering whether the court had not overstepped its mandate by getting entangled into procurement issues.

Whereas there are genuine concerns about having all TV content being transmitted by the government-owned broadcaster, there is also little comfort in knowing that all your TV content is being transmitted by commercial, private sector entities. A monopoly is a monopoly – whether government-owned or commercially owned, it will eventually exhibit its bad manners.

Consumer Federation of Kenya (COFEK), one of the interested parties in the petition felt the consumer will benefit from the postponed migration date that has now been pushed to September.  This supposedly gives consumers time to save funds in order to buy the requisite Set-Top Boxes (STB).

It remains to be seen if this will happen, but experience shows that if analogue TV broadcast remains available as an option, the incentive to incur STB costs -however small they may become- will disappear and users will continue in their comfort zone of being analogue. A deliberate “switch-off” of analogue signals is likely to be the biggest incentive to switch-over from analogue to digital TV.

So who really won from the recent ruling?  Definitely the media houses, and they won big time. Specifically, they have won the rights to be awarded a digital signal distribution license, thus avoiding the need to transmit their content through the existing Signet or PANG distributors. How or if this distorts the broadcast market will be a debate for another blog.

Ironically, the second winner is the regulator. By finding the regulator not independent as currently constituted, the Court of Appeal has raised the bar and set new standards for what it takes for a regulatory agency to be considered truly independent. There are technocrats within the regulatory body who would prefer to work under a less politically charged environment, often precipitated by the majority government appointees. A more independent regulator would eventually benefit the user as well since decisions taken would be more balanced to all interested parties as opposed to being biased towards political expediencies.

Perhaps the formation of the next board of the Communication Authority of Kenya may now follow the Judicial Service Commission (JSC) format; whereby board membership is contributed from stakeholder bodies representing Government, ICT Professionals, ICT industry, Media, Consumers, Information Security professionals amongst others. But as the government heads to the Supreme Court to protest the current ruling, the digital migration game is certainly far from being over.

Mr Walubengo is a lecturer at the Multimedia University of Kenya, Faculty of Computing and IT. Twitter : @jwalu