Our freedom and a little black box

The small black box at the heart of the move from analogue to digital is about South Africans’ freedom, which communications minister Yunus Carrim’s decision will either narrow or enlarge. By Leon G Marincowitz.

Leon G Marincowitz

Leon G Marincowitz

The small black box at the heart of the move from analogue to digital is about South Africans’ freedom, which communications minister Yunus Carrim’s decision will either narrow or enlarge.

This is unfortunate since technology and markets function best when given the widest possible freedom. This is clearly evident with disruptive technologies, which are precisely what their name implies — disruptive. This disruption is magnified when public policy is involved in what essentially should occur at the dictates of the market.

This has happened in our local television industry, with MultiChoice and e.tv building large profitable businesses through creative and disruptive engagement in the open market. Even the SABC is attempting to broaden its appeal by launching new channels on different platforms. This natural process is complicated when government intervenes.

To be sure, this is not Carrim’s fault. In a very short period, he has rectified many of the incompetent decisions and plain wrongs that under previous ministers were afflicting the industries under his purview. However, he still has an important decision to make: whether a small black box that converts a digital signal to an analogue one should be encrypted or not.

Yet this little box implies so much more. It is the difference between a closed arena controlled by government and an open, free market where the most energetic and creative (and thus profitable) will survive, much as DStv did with satellite and e.tv did with 24-hour news — both of which have outdone the SABC.

By mandating an encrypted black box, the minister would be effectively closing the market. The claims that such a choice will be protecting the local manufacturing industry with an encrypted system by preventing cheap Chinese products from flooding the market is unfounded. Is Carrim saying that our young engineers trained at our universities are not capable of developing a competitive business model?

More importantly, if the minister decides in favour of encryption, then who will be the gatekeeper to this locked system? Government?

Carrim has shown himself to be a man of integrity, but can he guarantee that he will head the ministry in the following government? Can he guarantee that greater errors and political opportunists will not hijack the ministry again, and again hold the industry to ransom?

South Africans are tired of hearing how a foreign (usually European) firm’s profits will be magnificently rewarded when a South African project comes online. Who will own this encryption? Probably a foreign company and, even if not, we must ask the question, who will be awarded the tender? After the e-tolls disaster, this information is far too important for us as South African consumers to allow to be kept from us until after a decision is made. These factors must be made known prior to the decision making takes place.

By closing the system, we don’t do anyone any favours. South African companies will not be protected. Instead, the implication will be that they don’t have to be more efficient and more cost effective, and that they definitely don’t have to create a better, faster, smaller set-top box on the next iteration. The result will be a poorer service and product. This is what happens with protection: it removes the energy from healthy competition. And this country’s creative young engineers won’t win the tender because they aren’t politically connected.

It is extremely worrying when access to a market is controlled by a government department. Before any potential new player even thinks of switching on their broadcasts, they will need to have established a close relationship with government for access to the TV airwaves.

The decision for an encrypted set-top box is about much more than a silly little box. It is deciding to institute a gatekeeper for the TV industry that effectively threatens to eliminate any potential new entrants. It is committing government to the never-ending tendering of set-top boxes. Will government subsidise these boxes forever? Why do the indigent only receive a state subsidy and not actual taxpayers?

Besides the subsidy, there is something far more insidious at play.

For all the good intentions, the central issue is one of dictating to consumers and to the markets that serve those consumers. And this strikes against our ability to make choices and spend our money where we think it’s best spent. This small black box is about freedom and the minister’s decision will either narrow or enlarge it.

Here is an opportunity for the minister to make a lasting public policy decision, the effects of which will last for a very long time. Let us hope that his choice will be to the benefit of South African companies, the existing ones and the ones yet to be created, and of course the South African citizens who are usually forgotten amid the rancour of public policy decision making.

  • Leon G Marincowitz is projects manager at the Free Market Foundation

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  • Joe Black

    The most saddening point is that many experts believe that the closest we can get to a definition for intelligence is any entity that makes decisions or exhibit behavior that promotes as many future possibilities as possible.

    By that definition SA’s regulatory bodies are at the same level as rocks on the intelligence scale.

    The iron grip they are so fond of is a total sedative for the economy.

  • COyZAn

    The flooding of the market with inferior Chinese products is not unfounded. Tanzania are still paying the price for having allowed unencrypted boxes. It almost destroyed their conversion from analogue to digital

  • Andrew Fraser

    Strong emotive words. How did it “almost destroy” their migration? Which has happened, by the way, unlike in SA. If you hav some data/case study to back up your assertion?

    Poor quality is self limiting when it comes to electronics. People will vote with their own wallets over time, and poor quality products will fail in the market. That is what is good about free trade, competition drives up quality and drives down prices.

  • Greg Mahlknecht

    That sounded like BS, so I looked it up.. it appears the problem with Tanzania is that the government didn’t make enough effort to educate the public, and didn’t appear to help the public get them cheaper – it was only after they fell behind in the roll-out they made them tax-free. Eventually they made a massive effort in educating the people in their capital, got >90% penetration with the consumers, then switched off analogue in that city, and after that word spread and it looks like it’s fairly smooth sailing.

    Another significant factor was “the high cost of decoders and antennas” – so we can learn that lesson from them, and having an unencrypted STB will help drive the price down.

    For all their mistakes and bungling, the STB subsidy is a good move from the ZA government, and once they actually decide what the hell they want to push out there, it should go far smoother than our African friends to the North.

  • LawRoy

    If you not involved in the broadcasting industry then keep your dumb comments to yourself. Tanzania, Kenya and Mauritius have all had major problems with cheap STBs flooding their markets. Check the internet yourself for the facts. No other country in Africa , except SA has a local electronics industry to protect…so the government will protect it ..of course you as person with a job does’nt give a fck for the poor so you lament the government…people like Multichoice also want to protect their self interest so they make stupid and ignorant comments which they know are lies…any engineer with his self worth will know they are lying …

  • LawRoy

    And by the way this entire article by Leon Marincowitz is absolute bull****. He is not in the broadcasting industry and his “sources” are aslo bull****.
    SA is not tying itself into any propriety system for the analogue to digital migration project. Not with STB/Decoders , Conditional Access or iDTV’s. All the systems the country will be using are “open” standards e.g. DVB-T2, CI+, DVB-S2, MHEG-5 etc. Multichoice claims the government will force TV manufacturers to build a “unique” iDTV for SA….bull fcking ****…any iDTV that is built for the European market will work in SA…NO EXTERNAL Set Top Box required. All Free To Air channels will pass through the TV transparently and CI+ interface will allow the viewer to choose his favorite PayTV operator to watch pay subscription TV. So pls if you don’t know the facts don’t comment with bull****…

  • Greg Mahlknecht

    >Tanzania, Kenya and Mauritius have all had major problems with cheap STBs flooding their markets
    I checked the internet and couldn’t find any mention to this. They had many problems that many articles covered, but cheap STB’s weren’t mentioned in even one of them.

  • Greg Mahlknecht

    Got any sources? You moan about the author not providing credible sources, yet provide none of your own. Would you mind pointing out which parts of my comment are BS, as all the facts are lifted directly from reports of what actually happened in Tanzania.

    The largest motivating factor for CA/Encryption seems to be protecting the local STB industry – now, if, as you say, you can actually use any box to pick up the signal, this means we’re back to being able to import cheap boxes… which you seem to be against? What am I missing?

    … and why are we using DVB-S2 for terrestrial TV?

  • LawRoy

    Use the SABS SANS862 standard for STB information for SA.

    go to http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX////;32002L0022 this will give you all the iDTV info.
    The government has NOT called for encryption. The policy says broadcasters can CHOOSE to USE encryption or not.

    The Control system and the SA SANS862 standard will ensure that any “cheap” STBs are no longer “cheap and nasty…they will have to comply with the SANS standard to meet SA requirements and have the same Control system in them…this will allow the local industry to compete on a “fair” basis i.e. like for like. Cheap STB’s will not have 11 language capability ( SA languages), no EPG ( which for viewers , as you know is a great feature), No SA user interface , etc etc…
    The point is to try and protect our local industry by putting in standards and trying to even the playing field…bottom line pls buy local…but if you want to support other foreign countries , thats your call…

  • Andrew Fraser

    Again with the emotion. Quite apart from the ad hominem attack, you have conveniently not shared any supporting information or data. Your argument doesn’t seem to hold much water. The introduction of encryption to the STB offers very few benefits to South Africa and many negatives. Those arguing for its inclusion generally fall into two camps, those that want an easy entry into pay tv without having to build a delivery platform, and those in the manufacturing industry that wish to have additional protection for their uncompetitive manufacturing business. (Please note that there are already massive protective tarrifs on TV reception equipment to protect this industry).

    The outcome of including a localised encryption system in South Africa will be higher prices, a technically moribund system, and a few manufacturers profiting at the expense of the consumer and the taxpayer.

    And before you say that I know nothing, I have more than 20 years experience in Broadcast and Consumer electronics.

  • Greg Mahlknecht

    I really hope what you say is correct – that would be a good thing. But too many concerns from the past conflict. Then again, things change so much, who knows what’s current? Do you have a link to SANS862? I can only find old drafts online and would like to see what’s current.

    One of the hot topics was the concern citizens would take government-sponsored decoders and sell them over the border (to protect taxpayer money)… is that not still a concern?

    The EPG/Languages are a red herring – that’s just a firmware flash on any cheap Chinese import, it’ll set up exactly the wrong kind of STB industry – import, flash, repackage, ship out.

    >if you want to support other foreign countries , thats your call

    I support whoever gives the best value… I happily pay a few more % to support local, but I wouldn’t pay significantly more just to support a local company. They have to be competitive.

  • Andrew Fraser

    All the MHEG5 features of the middleware are programmable features. Any device can be flashed to support the EPG (futher than DVB-T2 included support) and language requirements. It is not value added by local manufacture. Once the roll out begins TV manufacturers will build this into their sets for SA. Encryption, however, is a different issue completely.

  • LawRoy

    Andrew…I think thats the point I want to make.i.e. MHEG being able to be “flashed” at any point…iDTVs being “open access” etc…..Multichoice is trying to push that the Minister, by including a Control system is tying SA into a propriety, closed system which would require specially manufactured devices for SA. This is not so……the government wants to use the Control system for a number of applications e.g. Messaging services ( by the way also used in countries like Tanzania, Malawi, Namibia, Ukraine, Spain, Italy France, Swededn etc…) to send e-government information to all citizens, but especially the poor households in any language to reach that particular group of people and “switch off/disable” stolen STB’s…and more services….but the comments from M/Choice is that it will cost millions…not true…R20 per STB…no royalties as espoused by the big M…imagine what another type of communications system would cost the government…this “communications system is R20 per STB once off and can be used forever…anycase, I think this thread has run its course…Greg..you can get the SANS spec from the SABS counter in Groenkloof at the SABS building…

  • Greg Mahlknecht

    >comments from M/Choice is that it will cost millions…not true…R20 per STB…no royalties as espoused by the big M

    5 million STB’s x R20 = R100mil. That R20 looks too low, though – these guys are talking Nagravision, on Alibaba, even the cheapest Chinese Nagravision DVB-T2 box is $10-$15 more than a non-Nagravision one.

    I didn’t realise Nagravision was a royalty-free system, and had no running costs.

    I don’t think anyone’s against CA and Encryption, we’re against the government subsidizing and controlling it. If it’s sooooo cheap, and anyone can make STB’s, why doesn’t eTV just do that and stop trying to get government hand-outs?

  • Marcan

    Strong words from what looks like a new entrant on this forum, but your further comments make clear that you are well informed. Your name, viewpoints, temper and emotions reminded me immediately of the short encounter I had once with the DoC Technical Adviser Roy Kruger. He (you) came immediately across as somebody with the same political ideology as Jeremy Cronin and Patrick Craven. Bet you are the one.
    It is of course a sign of deep intolerance and insecurity, when you immediately want to exclude somebody from a discussion, because you assume he is not in the broadcasting industry.I am not in broadcasting, electronics or IT, just a very interested consumer, who followed the Digital Disaster closely and feel completely entitled just like the writer of this article should be, to give a strong opinion on the matter . I believe actually that in many ways the whole process lacked common sense and the interests of the average consumer/ citizen was overlooked, in favour of small interest groups as the broadcasters and the few hundred persons in the local electronic industry.
    The Gov should not at all try to micro manage this whole process, keeping itself busy with minute details, manufacturing, subsidy and distribution of STBs, in a semi communist, neurotic control freak, Big Brother like fashion. It could easily leave much more to the private sector and individual TV owner. Like in Tanzania, it should allow free, unrestricted import of all STBs without import duties, with the only requirement that they should be electrically safe. I completely agree with Andrew, that the free market system will sort out which STB, the consumer prefers. Just like in the UK with the Freeview system, where there is a wide array of DVB-T2 receivers available.
    The idea that the taxpayers should pay for the 70 % subsidy of the STBs for the poor is more than misguided, as an opposition MP and spokes person on communication once mentioned. This SOS, Scheme for Ownership Support, as the DoC calls it, is totally ludicrous. TV is not an essential human right or necessity, the poor can survive without Muvhango, Isidingo, Laduma. Supplying it for close to mahala is not an core Gov function. You will directly accuse me that I’ve got a job and don’t have an understanding of or empathy for the poor. Total rubbish.
    There is no need to support to protect the electronic industry.The core, underlying reason that manufacturing in SA is struggling so much lies deeper.
    But no doubt, we will differ fundamentally on this one.
    Please read my views on economic matters as expressed in a previous post below this article on IOL, or check my profile on Disqus. news/politics/anc-s-policies-are-aiding-the-poor-1.1665084#comment-1301439927
    And referrals to online articles on the DTT change over in other African countries would be appreciated.

  • Andrew Fraser

    Which brings us back to the beginning, If CA is not required, and all imported devices will work… why is it included in the standard?

    The inclusion of proprietary encryption (which must have some license fee) is purely a bid to protect the local industry by government. Unfortunately nobody in government seems to understand (or those that do, may have some incentive to ignore the results) what the impact of the decision will have on the rollout and on the ability of South Africa to complete the process in the most efficient manner.

    Ideally, in these kinds of implementations, government should make the most basic of regulations based on safety and international treaty and then get the hell out of the way.

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