Digital migration – Supreme Court ruling requires regulators to consider public interest

The long-lasting tussle between the government, the regulator and the three media houses regarding the digital migration process finally came to an end following the recent Supreme Court ruling.  

Previous analysis on this blog has followed the case right from inception at the High Court, through the Court of Appeal. Now we have a chance to review the Supreme Court's take on the matter.

Previously, the Court of Appeal had largely ruled in favour of the media houses, agreeing with their contention that the communications regulator as currently constituted was not independent, and by extension was not the independent regulatory body envisioned in the new Constitution to mange the sector.

As such, the media houses argued that the regulator had no mandate to oversee the digital migration process given that they would be inherently biased due to their non-independence.

The Court of Appeal not only agreed, but went ahead to nullify the Broadcast Signal Distribution (BSD) licence initially issued to the digital signal distributors SIGNET and PANG. Further, it instructed the regulator to issue the media houses with their own BSD license.

AN INDEPENDENT REGULATOR

Both the government and the regulator disagreed with the ruling and mounted an appeal at the Supreme Court, which has the final say on the matter. The Supreme Court did not disappoint the appellants.

It found that the independent regulator cited in the Constitution with respect to the freedom of the media and/or freedom of expression was actually not the communications regulator, but rather the Media Council of Kenya. 

As such the argument against the communications regulator with respect to its independence was null and void.

Further, the Supreme Court found that even if the old communication regulator were the one cited for independence, it would have still had the mandate to oversee the sector given that the new Constitution does not anticipate a legal vacuum, but rather provides for transitional mechanisms.

Therefore, the old legal order would prevail, pending new legislation and/or regulatory modifications in light of the spirit of the new Constitution.

SEPARATION OF POWERS

Another blow awaited the media houses when the Supreme Court reversed the Court of Appeal's express directive that the regulator issue them their own BSD licence. This licence would have enabled the media houses to carry and distribute their own digital content, rather than use the infrastructure offered by either SIGNET or PANG.

The Supreme Court found that this order would be in violation of the separation of powers between the implementing authority, which is part of the Executive, and the judicial arm of government.

However, as a consolation, the Supreme Court directed that the regulator enter into negotiation with the media houses with a view to considering the merit of giving them a BSD licence. 

The regulator was also ordered to report back on this within 90 days, which is quite surprising since this amounts to the same violation of the principle of separation of powers between the courts and implementing agencies. Is the Supreme Court giving media houses a red herring to chase in vain?

BID BOND ERROR

Assuming the regulator reports back that the negotiations have failed, will the Supreme Court make the same error committed by the Court of Appeal by directing that the regulator forthwith issue the media houses a BSD licence?

Nevertheless, the Supreme Court also found that the BSD license for media houses was denied purely on technicalities; the media houses' bid was disqualified simply because they submitted a bid bond of 60 rather than 90 days, as per the bid document requirements.

The Supreme Court determined that whereas simply adhering to the letter of the procurement law was, in general, fine, it was not acceptable when weighed up against matters of significant public interest. The BSD licence process is of intense public interest, hence the standards for disqualifying bidders needed to be much more convincing.

SIGNET 'SURRENDERED ITS OPERATIONS'

Furthermore, the Supreme Court alarmingly found that SIGNET, which got its BSD license by virtue of a being a subsidiary of KBC, the public broadcaster, has since surrendered its operations to private players — defeating the whole rationale of public interest used by the regulator to issue the BSD licence.

One final determination for the court was that the media houses did not have their intellectual property rights infringed simply because a third party was transmitting or distributing their content on their behalf. This indeed is the market structure and the nature of distributing digital content where you have fewer distributors but more content providers or producers in order to maximize the use of the scarce spectrum resource.

In conclusion, the Supreme Court ruling was largely in favour of the government and the regulator. However, the media houses have made their point — they can and they will hold the digital migration process in legal abeyance until and unless both sides concede some space through consensus.

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