Plan to collect TV licence fees for smartphones and laptops in South Africa could face major problems

The SABC’s licensing proposal involving Netflix, MultiChoice and DStv has proved divisive among some South Africans – but could also run into legal hurdles, say experts.

In October, deputy minister of Communications, Pinky Kekana put forward a number of proposed legislative measures aimed at improving the SABC’s revenue shortfalls.

The proposed regulations include:

  • Requiring pay-TV service providers like MultiChoice (DStv) and Netflix to collect TV licences on behalf of the public broadcaster;
  • Expanding the range of devices on which licence fees would be payable to include, inter alia, smartphones and tablets, and not only conventional television sets.

However, these measures could run into some legal challenges, says Ian Jacobsberg, director for Corporate, Mergers & Acquisitions, and Competition at Tabacks Attorneys.

The duty on members of the public to obtain and pay for television licences arises from section 27 of the Broadcasting Act, 4 of 1999.

“In terms of the section, the liability to pay a licence fee arises from owning and using a TV set – in other words, it is purely related to the hardware – and not what program content you are accessing,” Jacobsberg said.

“A TV set owner who is subscribed to a pay-TV channel has the same obligation to obtain and pay for a TV licence as one who only watches the SABC’s programmes.”

Jacobsberg said that in terms of section 27(1)(b), dealers are not allowed to sell TV sets to anyone who is not in possession of a licence and are therefore effectively made part of the enforcement mechanism.

“It would be easy enough to introduce a similar regulation obliging a subscription service provider to ensure that a potential subscriber has a licence before making the service available,” he said.

“The more difficult issue arises if the SABC is actually going to try and compel the service providers to collect the licence fee and pay it over to the SABC.”

Jacobsberg said that the reality of the way in which internet services are typically provided, some challenges arise as to how the proposals are to be implemented in practice:

Month-to-month

In the case of many, if not most, subscription services, the contracts between the subscriber and the service provider run from month to month, said Jacobsberg

Will a service provider have to confirm once a month that every subscriber has a licence ? Or will they have to keep a record of how long each subscriber’s TV licence has left to run when their subscriptions commence and ensure that it is renewed prior to expiry, before continuing to provide the subscription service?

Who bears the onus? 

If a subscriber receives content from several service providers, which one will bear the primary responsibility of collecting the licence fee?

Device-based licencing? 

The obligation to obtain a TV licence arises when a person owns and uses a “television set”, said Jacobsberg.

“Amongst the minister’s proposals is that the range of devices on which licence fees will be payable should be expanded to include laptops, smartphones and others on which video content can be received and viewed,” he said.

However, Jacobsberg said that this is ‘a bit of a red herring’.

The Television licence Fees Regulations published in terms of the Broadcasting Act define a ‘television set’ for which a licence is required, as ‘any apparatus designed or adapted to be capable of receiving transmissions broadcast in the course of a television broadcasting service’, a definition wide enough to include smartphones, tablets and laptops.

“So, no amendments to the existing legislation actually seem to be necessary to give effect to this idea,” he said.

“However, it does raise a question regarding retailers of these devices, and network service providers who provide the devices as part of a package to subscribers – should they in fact be insisting on seeing every customer’s TV licence before they supply the device?”


Does the SABC have the authority?

A question also arises as to the legal authority of the SABC to delegate the authority to collect licence fees to businesses in the private sector, said Jacobsberg.

In some of the media coverage of the proposal, it has been reported that the SABC has said that requiring the providers of subscription services to collect TV licence fees ‘would be similar to municipalities collecting traffic fines and motor vehicle licence disks’, he said.

There may be a similarity in that the duty to collect revenue due to a particular entity is delegated to another body, but there the similarity ends, Jacobsberg said.

“The National Road Traffic Act and the regulations promulgated under it expressly allow the ‘shareholders committee’ appointed in terms of the Road Traffic Management Corporation Act to designate local authorities as registering authorities.

“No such authority exists in terms of the Broadcasting Act; a provision permitting the SABC to delegate the collection of licence fees was actually deleted in 2003.”

There also does not appear to be any global precedent for the proposed system, said Jacobsberg.

“In countries where television licence fees are collected by a body other than the national broadcaster itself, they are generally billed along with fixed-line telephone services or electricity,” he said.

“Given the credibility issues around the providers of both of those services in South Africa, it is unlikely that public resistance to paying television licence fees is going to be any less if those precedents are followed.”

“The fact that very few, if any, other countries have imposed a duty on private sector service providers to collect licence fees on behalf of the public broadcaster may well be an indication that the legal, logistical and economic obstacles simply do not make it viable.”

One issue that immediately comes to mind is the cost, Jacobsberg said.

“The service providers will have to establish an entirely new layer of administration to monitor the invoicing and collection of fees.

“In order for the system to run effectively, that would have to include provision for legal action against defaulters. It is unlikely that any private business will react kindly to having to bear an additional layer of expense from which they will not benefit.”


Read: SABC wants to make radical changes – including more money from TV licences and easy access to sports rights

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Plan to collect TV licence fees for smartphones and laptops in South Africa could face major problems