BOCRA quashes Multichoice
Dismissing the case in which Multichoice Botswana (Pty) Ltd (MCB) took Botswana Communications Regulatory Authority (BOCRA) to Court challenging its decision to regulate DSTV tariffs, Justice Motswagole said anyone in the business making profit in Botswana will have to be regulated by local laws.
As a result of the judgement, MCB, the local operator of DSTV will be forced to submit their proposed tariffs to BOCRA for approval before implementation. DSTV has been accused of charging Batswana exorbitant fees, taking advantage of the fact that it was not fully regulated by BOCRA.
Over and above the regulatory battles Multichoice is locked in another war over its market share as global online streaming giants like Netflix and Amazon, which are not subject to the jurisdictional regulatory regimes that now apply to Multichoice after the High Court’s judgment.
In South Africa DSTV is arguing with regulators that rather than imposing further regulations on MultiChoice, the government should liberalise the market and ensure that online services comply with the same trade regulations as local broadcasters. Netflix is expanding its footprint in the Botswana market, having partnered with Kwese TV, a licensed broadcaster that is upsetting the DSTV monopoly with cheaper subscription packages.
In South Africa Multichoice is threatening loss of jobs and taxation revenue if it pulls out and starts operating online streaming either from Mauritius, a tax haven where it is registered. Could the judgment passed in Botswana impact the broadcast giant in the same manner?
In June 2017, BOCRA enacted a new law, which compelled DSTV to submit all tariffs for approval by BOCRA before they were implemented. The new law meant that DSTV would no longer increase prices as and when it pleased, as has been the practice. BOCRA reserved, under the new law, the right to reject proposed tariffs if the regulator felt they were exorbitant.
Initially, while MCB contested BOCRA’s decision in court, it simultaneously hiked its prices, as per its norm.
BOCRA was aware of the price hikes by Multichoice Botswana. However, BOCRA was not able to regulate DSTv prices as Multichoice had initially challenged Clause 13 of their license which speaks to tariff regulation. The Court had directed that BOCRA should not invoke the provisions of clause 13 until the legal proceedings were finalized. BOCRA had to defend its new law in court so as to be able to fully implement it.
Accustomed to charging Batswana unregulated fees, MCB felt that the new law would limit its profit margin and interfere with its right to trade, resulting in the decision to launch the a legal proceedings.
The legal challenge arose when BOCRA, backed by section 90 of their Act insisted that all service providers under their licensing should submit their tariffs to it for approval before implementation. Multichoice challenged the regulators decision, arguing that it is under no obligation to submit such as they operate under the Multichoice Africa Group. BOCRA’s argument then was that as a licensed service provider in Botswana, Multichoice Botswana was bound to submit local tariffs for approval to the regulatory body.
Section 90 of the BOCRA Act states that, “A licensed service provider or supplier of a service or a product in a regulated sector shall submit a proposal in writing to the Authority in respect of the tariff which it intends to apply for the different services and or products.’’ In contrast Multichoice argues that Clause 13 of the Tariff Regulation (Subscription) ought to apply to them. The regulation provides that, “The Licensee shall submit to the Authority, in writing, a proposal in respect of subscription fees it intends to apply. In determining the subscription fees, the licensee shall follow the principle of cost orientation.’’ Further the clause says, the Licensee shall ensure that to a large extent, the services are sufficiently unbundled so that, the customers have diversified packages, the licensee shall adhere to the tariff principles and guidelines as may be prescribed by the Authority from time to time.
MCB applied Clause 13 and argued that its broadcasting services were issued by Multichoice Africa (MCA) which is domiciled in Mauritius and not MCB. In that respect, they were of the opinion that the services provided by MCB do not fall under the regulatory control of BOCRA.
In their arguments, MCB said that the company is not integral to the provision of the DSTV broadcasting services at all. MCB said its services are ancillary to its provision and relate only to consumer and administrative support. “Multichoice Botswana merely provides Multichoice Africa with information which Multichoice Africa requires for the purpose of activating subscriptions,” MCB revealed to the Court.
In its response, BOCRA argued that what Multichoice Botswana’s approach omits is that in order for it to carry out its task as Subscription Management Service (SMS) provider, it must do so in terms of an authorized service and it cannot, by so doing enable an illegal broadcast service. BOCRA said subject to the terms and conditions provided for its Licences, the licensee is authorized to provide SMS service for commercial broadcasting services authorized by BOCRA, failing which the license could be revoked.
In his judgement, Justice Motswagole said anyone who wants to have a stake in the broadcasting process that is intended to be received in Botswana and sets up a network that will make the broadcasting material accessible by the members of the public in Botswana, acting either alone or in cooperation with others would be caught up by the regulatory regime established for Botswana. “If anyone wants to make money out of the people of Botswana by engaging in a broadcasting activity in Botswana such person would bring himself or herself or itself if a corporate body, under the jurisdiction of the Botswana Regulatory Regime,” he held.
According to Justice Motswagole, the question is not where you are situated but that your deliberate and calculated actions are impacting the Botswana society and economy,” reads the Judgement. Motswagole dismissed the application in favour of BOCRA.
South African based company, Naspers Ltd, holds 100 percent of shares in both Mutlichoice Africa (MCA) Ltd which in turn holds 51 percent shareholding in MultiChoice Botswana (MCB) (PTY) Ltd, that provides subscription management service (SMS). The latter generates no income of its own.