MultiChoice, the pay-TV company that operates South Africa’s largest direct broadcast satellite service, DStv, has hit out at calls by the SABC for the communications regulator to place a limit on advertising revenue received by subscription broadcasters.

The SABC is proposing that regulations be put in place limiting subscription services such as DStv to no more than 25% of the total television advertising revenue in the country. It says this will level the playing field and throw free-to-air broadcasters a lifeline in a tough operating environment.

Recall that back in June, the troubled SABC squared off with its rival MultiChoice at the communications regulator the Independent Communications Authority of South Africa (Icasa) over the requirement that the subscription broadcasting services carry three of its television channels for free.

The SA’s public broadcaster wants subscription broadcasting services such as MultiChoice and StarSat to no longer be allowed to carry its public broadcasting service channels, SABC1, SABC2 and SABC3, without entering into commercial agreements.

According to the SABC, its long-standing view has been that the current provisions of Icasa regulations, dictating that it should make its broadcasting content available at no cost and prescribing the public broadcaster to bear the costs of transmission to subscription broadcasting services, are ultra vires (beyond the powers).

The SABC has seven television channels authorised by Icasa – the “must carry” SABC1, SABC2 and SABC3 as well as SABC Encore, SABC News, SABC Parliament and SABC Sport – and fears that the authority’s draft regulations extend the ambit of the “must carry” concept to all the free-to-air public broadcasting service programmes comprising in a public broadcasting service channel.

“This would extend the SABC’s ’must carry’ obligations to SABC Sport, SABC Education and any other current channel or future channel to be developed,” the public broadcaster warned Icasa.

In its submission to Icasa dated May 21, the SABC insisted that the “must carry” channels are SABC1, SABC2 and SABC3 and do not include SABC Sport, SABC Education or any other SABC television channel either existing or to be developed.

The public broadcaster may, in its discretion, add the carriage of these additional channels, subject to commercial negotiations.

However, MultiChoice is opposed to the plan and has suggested that the move might be illegal despite the SABC obtaining legal opinion supporting its stance.

The SABC has been accused by MutliChoice of putting first its commercial interests that have now become more urgent in light of its continuing financial difficulties, which have nothing to do with its public service mandate of ensuring universal access to broadcasting services.

MultiChoice revealed that the SABC already earns R569 million a year in advertising revenue from the three channels carried on its DStv platforms.

“Contrary to the unsubstantiated allegations made by the SABC, no subscription or advertising revenue flows to MultiChoice as a result of the carriage of the ’must carry’ channels,” the company explained.

MultiChoice also charged that the public broadcaster failed to acknowledge that the company already makes a significant contribution towards the sustenance of public broadcasting by carrying all ’must carry’ transmission costs, incurring over R108m between 2008 and last year to comply with its obligations, and that Icasa has failed to recognise this.

”There is no legal basis for the SABC’s ’must carry/must pay’ proposal. Any suggestion that subscription broadcasters must pay the SABC for the ’must carry’ channels is completely at odds with the Electronic Communications Act 2005,” MultiChoice told Icasa.

The company insisted that subscription broadcasters cannot lawfully be required to provide the ’must carry’ channels to non-subscribers as such an obligation would not be legally permissible and is likely to be struck down as ultra vires and invalid on other grounds.