Media diversity and its inherent role in ensuring the right to freedom of expression stands a better chance of surviving in South Africa than in the United States.
The Independent Communications Authority of South Africa (Icasa) regulates local media in accordance with legislation that hasn’t changed much in 10 years.
At the core of the Independent Broadcasting Authority (IBA) Act of 1993 are the laws that entrench South African media diversity: the 20% ceiling on foreign ownership; the limitations on ownership of two AM radio licences, two FM licences and one television licence; and the restriction on newspaper owners possessing both a radio and television licence.
Although local media owners have long been arguing that these limitations compromise the industry’s economic growth, Icasa is not about to make any hasty decisions.
The process of reviewing the laws began almost three years ago, and last year culminated in a discussion paper, which is yet to be finalised before the Department of Communications is approached on amendments to the Act. The delay is explained by an ideological conflict that Icasa chairperson Mandla Langa terms “consolidation versus constellation”.
In contrast, as The Media magazine’s New York correspondent Tim Spira writes, it took Icasa’s US counterpart, the Federal Communications Commission (FCC), only a few months to effect some of the most sweeping changes in US media history.
“In June after a 3-2 vote that went along party lines, the Republican-dominated FCC raised the cap on national television reach, increased the number of television stations a company may own in one city, and all but did away with a rule proscribing cross-ownership of newspapers and television stations in a single market,” Spira points out.
“Many dissenters see the FCC’s new regulations as a blatant attempt by the Republican Party to curry favour with big media before next year’s presidential elections, with some even suggesting that FCC chairman Michael Powell, son of the more famous Colin, is hustling to put himself in line for a Cabinet position ahead of George W Bush’s virtually certain re-election.”
However the political motivations are read, it’s no surprise that the FCC has given top-tier media giants official permission to get even bigger.
An editorial in December 2002’s issue of The Media argues that following the passing of the Telecommunications Act of 1996 — a watershed statute removing barriers to consolidation in the telecommunications, media and information industries — the US regulator has consistently ignored acquisitive media conglomerates and has instead concentrated on censoring offensive speech and harassing rap stars. This led to Eminem singing: “The FCC won’t let me be / or let me be me so let me see / they tried to shut me down on MTV / but it feels so empty without me.” The editorial speculated that the FCC is reimbursing the American public for killing any hope of media diversity by protecting them from profanity.
Compared with the FCC, our regulator looks pretty healthy. Last week’s edition of this column opened with the assumption that the bids for the assets of New Africa Investments Limited (Nail) renders consolidation in the media sector likely. At the column’s end, I implied that Icasa will be watching closely.
Taking its cue from the ownership restrictions in the IBA Act, the MIH/Naspers group, with its vast newspaper and television holdings, won’t even contemplate bidding for stakes in Nail’s radio brands Jacaranda, Kaya FM and Kfm.
The other big groups that have entered the bidding fray — Johnnic, Primedia, Kagiso Media and e.tv’s owners Hosken Consolidated Investments (HCI) — are less encumbered.
But some of them could come up against another of Icasa’s mandates: ensuring that proposed shifts in the ownership landscape are suitably empowered.
When Icasa blocked the Nail-Kagiso merger in 2001, it effectively pre-empted the government’s new broad-based, black economic empowerment (BEE) policy by defining empowerment according to equity interests.
Although the voting arrangement on Nail’s board was at the time controlled by the empowered Phaphama Holdings through N-share strucutures, Icasa wasn’t impressed. The regulator saw Nail’s true empowerment in economic terms — 5% equity.
So after the successful bid for Nail is announced, Icasa will probably have its eye on the government’s “strategy document” for broad-based BEE, which defines a black-empowered company as one that is 25,1%-owned by black interests.
HCI, which is 46%-owned by the South African Clothing and Textile Workers Union, will easily make it. Ironically Kagiso Media is just short at 24% through the Kagiso Trust’s equity stake, as is Primedia through the 19,5% stake of the Mineworkers Investments Company (MIC).
The Tiso consortium, which includes Safika and MIC, won’t have a problem on the empowerment score but as it’s likely to sell off Nail’s assets, the ownership regulations will come back into play.
And again where media diversity is concerned, it’s got to be a good thing that Langa sees the challenge of regulation as one of “consolidation versus constellation”.
As we put it in the December 2002 editorial, if he is ever swayed by the example of the FCC and drops the latter from the equation, we could have local rapper Mandoza rifling through the dictionary for words that rhyme with Icasa.
Media Weekly is produced for the Mail & Guardian by The Media magazine and is edited by The Media’s editor Kevin Bloom.