In the venerable tradition of nicknaming communications ministers, the new appointee, Radakrishna Padayachie, has earned the hopeful moniker of Jewelweed. This is another name for Indian Balsam, which is reputedly a cure for Poison Ivy. Read the column.

As of this week, I will be writing a weekly column on technology and telecommunications for old friends at ITWeb — a top technology news site in South Africa with readership that slightly exceeds that of this blog, albeit by only a few orders of magnitude. The idea is to comment on issues that come up in ITWeb news stories, through my usual political or economic policy lens. It will initially be published on Thursdays. I’ll still write a separate monthly column, “Backbite & Sneerwell”, in Brainstorm magazine (link for subscribers). After all, it dates back to 2001, and is my longest-running effort at commentary. I will also continue to write columns on topics other than technology in Maverick magazine.

Last week I wrote a trial run for the new column, on the monstrously bad idea of having the state establish a local set-top box industry for digital television because “we’re loathe to rely on foreign suppliers”. This week, The Spike proper begins, with a final stab at one of cabinet’s most deserving members, Poison Ivy.

• This column was first published in ITWeb Brainstorm magazine, February 2008. This is how I earn my monthly ration of beer and cigarettes, dog and cat food, fuel and bread. Subscribing not only gets you these columns on time, but goes some way towards sustaining this starving blogger in health and happiness.

Squelching to court through a quagmire

In the heavily prescriptive television industry, one has to admire the effort the regulator, ICASA, puts into its work. It can’t be easy. But one sometimes wonders: why, why, why, oh why?

Several recent developments in the broadcasting sector are worthy of attention, even if each serves only to exposes a fundamental failing in our telecommunications law.

Three that caught my attention in the last couple of months are the ruling ANC’s call for the SABC (the public broadcaster) to be more tax-funded and less advertising-driven, the suit Black Entertainment Television (BET) is bringing against ICASA over its award of five pay-television licences (it didn’t get one), and the demand by the SABC that pay-TV operators pay it for content they are required to carry (they don’t want to).

The ANC is quite right. One of the most damaging aspects of the SABC’s historical dominance of the broadcasting space is its reliance on advertising for funding.

A public broadcaster, if such a thing is necessary in the first place, should have a specific public service mandate and should be funded by public money. TV licences are a regressive, clumsy and expensive method of generating insufficient revenue. By selling advertising, the SABC, though it is a state-owned institution, sucks a large proportion of potential revenue out of the market, which could sustain competing broadcasters. Diverting available spending to the state is an implicit threat to media freedom, media diversity, media quality and media specialisation.

So I’m right behind the ANC’s proposal, with one caveat. The knee-jerk reaction has been that this will threaten press freedom. I can’t really see how the SABC can be more beholden to the state than it already is. I mean, with extended live coverage of ruling-party birthday parties it is, frankly speaking, kissing arse. Besides, being beholden to advertisers raises the same problems. The solution is to create an inviolable layer of structural separation between editorial and owners (in this case, the state). The SABC should be answerable to an independent, disinterested editorial board appointed by Parliament, rather than being controlled by politically-appointed directors. Only then can its public service begin to be distinguished from government service or ruling party service.

BET is also quite right. Television licences (and, for that matter, any other licence) should not be limited according to some bureaucrat’s notion of what the market can bear. They have no way of knowing how big the market might be and have no motive to take the necessary risks. They can only make and implement their one guess, however educated, rather than letting many competing guesses duke it out. They’ll always underestimate market size (witness cellular licences) or over-estimate it (witness E.sat’s decision to provide content to Multichoice, rather than use its licence, citing lack of space in the market).

Markets are created when risk-taking investors spot gaps and exploit them. Competition is created when those investors can price products as they see fit. Cost-reduction happens when competitors consolidate their interests, and winners buy up losers.
Instead, we get cosy cartels, who are held to arbitrary pricing restrictions, such as that they must generate at least as much revenue from subscriptions as from advertising. What do they do in a good advertising month? Go to customers and say, “Sorry folks, but we’re making a fortune here, we’ll have to raise your rates”? For that matter, why should there be any legal distinction between how broadcasters earn their revenue? Surely that should be a strategic business decision, not a legal prescription?

Unlike the ANC and BET, the SABC is quite wrong. If pay-TV operators have to pay for their SABC content, they should have the choice whether or not to buy it. If they’re obliged by law to carry public service content, it is unjust to expect them to pay over and above the cost of distribution. This is sheer opportunism on the part of the SABC, which is one of the dangers of that curious, cancerous state-capitalist hybrid that is the profit-driven state-owned enterprise.

Solving these problems go to the root of our telecoms legislation. They require setting licence conditions, but not limiting the number in issue. They require that risk-taking investors themselves choose their business plans and pricing models, rather than having them imposed by the state. They require regulation that is purely administrative, rather than restrictive, prescriptive and protective.

Because all this complicated lawyering and regulatory rigmarole, designed to balance the interests of producers, broadcasters and the state, forgets the most important interest: that of the public.

A calamity is unfolding. A disaster wrought, not surprisingly, by the lack of a free market in broadcasting in South Africa. I’ll quote from local rock DJ Benjy Mudie’s webpage:

Dear Rock of Ages listeners & fans,

Those of you that were listening to the show last Thursday would have heard the sad news that Rock of Ages is coming off the air at the end of March 2008. Radio 2000 has advised me that they are not going to extend the show’s contract and so after nearly 5 years of playing the best in classic and new ‘retro’ rock, both international and local, South Africa’s only rock show, Rock of Ages, will broadcast it’s last show on Thursday 27th March 2008.

There has been an outpouring of disappointment and anger at this decision and scores of listeners have emailed the station voicing their unhappiness and I understand that there are several petitions doing the rounds as well. If you would like to have your say on this please email the Program Manager of Radio 2000, Cuthbert Mashigo at cuthbert@radio2000.co.za. I would respectfully appeal to you to keep your comments polite, non-personal and non-political. I’m not sure if the protests will result in a reversal of this decision, all things are possible ….. however the important thing is that you have the right to speak out if you should choose, the SABC is a public broadcaster and as such is accountable to the people.

What is it with the SABC and rock music? Even PW Botha’s censors had more respect for rock. (Or maybe it just scared them.)

This is a disgrace. And a disappointment. It’s sad. And you and I pay with our tax and TV licence money for the SABC. You do pay your TV licence, don’t you?

But even if you don’t, it’s not like Benjy can get together with the likes of Chris Prior, Neil Johnson, Phil Wright, Rafe Levine, Leon Economides, and David Blood and start a rock/blues/jazz/metal station of their own. You can’t get frequency without the government’s permission. The state-owned SABC sits on most of it, and has no incentive to use it more efficiently.

You also can’t get a broadcasting licence without the government’s permission, and the government decides “what the market can bear”. Since when? Why shouldn’t the market decide what the market can bear? I’d reckon there’s a pretty reasonable niche market for rock, and it’d do just fine, especially if you spice it with some blues and jazz. You’d reach a pretty diverse audience, too, from teenage rockers to old hippies who would have remembered the sixties if they hadn’t been there, from avant-garde black professionals to angry white metalheads, from alternative and goth chicks to midlife-crisis bikers. But if I’m wrong, or these people have no money to spend on advertised products, why shouldn’t a rock station be allowed to go bust if it turns out there’s no market for it?

Here’s the text of my own e-mail to Mr Mashigo:

The last time I felt driven to write to a radio station I had to use a fax machine, because e-mail wasn’t around. That was in 1993, to express my disgust that Radio 5 was firing Chris Prior, who at that time had by far the best rock show on radio. I still enjoy the home-made tapes I made of his features as a teenager. In fact, the bulk of my education in music is thanks to Chris Prior, yet the SABC unceremoniously dumped him.

Then Benjy Mudie picked up the baton with his excellent Rock of Ages show, introducing listeners to excellent music, both old and new, that simply doesn’t get airplay anywhere else.

Now I hear his show may be cancelled.

Because of our restrictive licencing regime, it simply isn’t possible to create new genre-based radio stations in the vein of Classic FM, which means that SABC Radio, as the public-service broadcaster, has a responsibility to cater for all needs and tastes not covered by commercial stations. It also has the resources to do so on a channel like Radio 2000, which is usually given over to sport commentary or simply anonymous auto-queued music (good though it often is).

Other than the occasional news and talk radio, I do not listen to any music radio other than Benjy’s excellent show. I feel like I belong, there. It would be a great shame were it to be taken off air. It would also be contrary to the SABC’s public service mandate, I suspect. Since I pay tax and TV licences, and a private rock station won’t get licenced in a month of Sundays, this is most distressing.

Let’s help Benjy get back on air. Thursday evenings won’t be the same without him. E-mail Mashigo now.

Update: Leon Economides, who used to present the Priority Feature with Chris Prior in the good old days, commented to point out where radio rock hides these days in South Africa. It’s like the late 1960s in the States. AM only. Groovy, and all that. Thanks, Leon.

• This column was first published in ITWeb Brainstorm, a South African business technology magazine, on 1 October 2007. Do subscribe, if you prefer to read it the way it was intended to be read: in print.

In March 2003, this column was headlined Root out Poison Ivy. It wasn’t the first call for her dismissal, but it did coin the now-famous nickname for our Minister of Communications. It’s time for an escalation.

This magazine has documented every step in the failed politics of telecommunications reform in South Africa. Now the entire sorry saga is retold in a paper co-authored by Willie Currie of the Association for Progressive Communications and Robert B. Horwitz of the Department of Communication at the University of California in San Diego.

The ten-year retrospective makes for sobering and intensely depressing reading. The authors interviewed everybody who was anybody during this time. In its 44 pages are collected, with academic rigour, failure upon failure, which makes the most cogent case yet for the dismissal of the current Minister of Communications, Ivy Matsepe-Casaburri.

Moreover, I contend that it justifies the abolition of the ministry itself.

The headline of the report, “Another instance where privatisation trumped liberalisation,” perceptively highlights the core philosophical error underlying the policy of “managed liberalisation” that South Africa followed since Telkom was first granted its monopoly in 1997.

Read the rest of this entry »

Dene Smuts, the official opposition party’s spokesperson on communications, sure knows how to get quoted. Witness:

[Minister of Communications Ivy] Matsepe-Casaburri is simply not implementing recommendations. She seems to act as a law unto herself and an unguided missile. I intend to ask the committee to attend to this. The department is expected to appear before us this month and I intend to use this as an opportunity to tackle the matter and take it forward.

This was in response to the minister’s reported statement that said a Public Service Commission report which found “sufficient evidence” of several irregularities in the appointment of staff in her department was “incorrect”, and that she would take no action on its recommendations. This report lends support to recent allegations about fraud and corruption in the hiring practices of the Department of Communications (DOC).

The most elegant solution to these problems would be to fire the minister — you could pick from a smorgasbord of reasons — and merge her portfolio with that of the Department of Trade and Industry. Then require all current employees of the DOC to re-apply for positions in the new department. Two birds, one stone.

Chris Barron of the Sunday Times went in search of meaningful answers from the director-general in the Deparment of Communications. He found none, but published what he heard anyway. (Hat tip: politics.za.)
What he heard is quite staggering. About new undersea cables, which South Africa desperately needs, Lyndall Shope-Mafole, the DG in question, is quoted as saying:

There are those who assume they can come, wholly foreign-owned, and land in South Africa. We are saying, ‘no’.

When she says “we”, she’s not speaking for South African citizens, of course. Nor for South African businesses. They would benefit greatly from cheap international bandwidth provided by ruthless foreign competitors.

It therefore follows that she’s speaking for the crony capitalists that get all the sweet deals from the Department of Communications. Companies such as Sentech (wholly government owned), iBurst (which got a sweet-deal no-bid licence a decade ago), Infraco (the latest communist boondoggle, tasked with competing the private sector out of business), Telkom (of which the government still owns more than a third), and Neotel (whose shareholders were carefully selected and approved by government). They are the only ones that would be harmed by competition, after all.

Of course, the facts fall apart, since most proposed cables actually do have local participation. But no. Apparently, richer companies can offer lower prices, because “the globe is basically based on a capitalist system”, which is unfair. Not to South Africa, but to Ethiopia, which since last week falls within the Department of Communinvasion’s ambit. Therefore, the government will tell private investors to take a hike, and spend billions belonging to South African taxpayers instead.

Socialised bandwidth for all, she cries, while failing to deliver even basic services. “Infraco is there to ensure that we are served, the country as a whole,” she says, while “the majority of South African taxpayers ,” who “are not served by these private companies,” riot in the streets because they are not served by government.

“It is our responsibility to promote our sector and make sure that our sector is globally competitive.”

Nobody would argue with that. But if this is her department’s responsibility why is the local sector still so uncompetitive?

“It is actually doing very well,” she said, sounding offended. “We can be very proud of our achievements.”

Excuse me while I wipe the coffee off my screen. Clearly, she’s been at the Department of Cool Aid too long. That she expects us to just swallow this propaganda comes as no surprise when you find that she’s busy with a third reading of Ronald Suresh Robert’s sycophantic paean to Thabo Mbeki, Fit to Govern.

The reasons for abolishing the Department of Collectivist Cretins are piling up fast.

ITWeb reports that a letter has been sent to the police, half the government oversight committees and the presidency, in which fraud and kickback accusations related to the hiring of staff in South Africa’s Department of Communications are alleged.

It quotes the official opposition’s Dene Smuts:

It has been clear for some time that the quality and qualifications of many of the department’s personnel – with notable exceptions like Dr Harold Wesso – is not up to the standard one expects from a key government department which can make or break SA’s communications sector. If [the allegations] are found to be true, it would explain the poor quality of the appointments.

The department’s heavy-handed management of the telecommunications sector has failed dismally. It has led to sky-high pricing, underdevelopment, and lack of service to poor areas, largely because it confused mere privatisation with free market competition, as described in this damning report by Robert B. Horwitz and Willie Currie.

It may once have been worth giving the policy of “managed liberalisation” a chance, but it’s been clear for some years now that the system is broken, and that big-bang liberalisation couldn’t possibly be worse than the mess the Department of Communication has wrought. Let the regulator do basic jobs like policing spectrum use, and leave both existing and new operators free to build whatever networks they want.

The story notes that the department has a 37% vacancy rate. Here’s hoping that this scandal will make it 100% by Christmas.