CAK officials Francis Wangusi, Ngene Gituku and Ken Nyaundi on February 6, 2015
The Ministry of Information, Communications and Technology, in response to the Supreme Court orders, issued Policy Guidelines to pave way for the Communications Authority of Kenya to consider issuance of self-provisioning signal distribution licences.
The Authority, thereafter, commenced the process of issuance of a self-provisioning BSD licence and in the meantime issued African Digital Network (a consortium of the three media houses NMG, SMG and RMS) with temporary authorization to enable them start preparations.
On December 19th 2014, the Authority gazetted the application of African Digital Network together with two other applicants, GoTV and Lancia Digital Broadcast Ltd.
The Authority, on 21st January 2015 suspended the temporary authorization granted to Africa Digital Network Limited to roll out their self-provisioning digital signal distribution.
This administrative action was as a result of misleading advertisement carried by Nation Media Group, Standard Media Group and Royal Media Services from 16th to 20th January 2015 that implied Startimes and GOtv were illegally carrying their content thereby infringing on copyright and neighbouring rights.
The advertisement also dissuaded consumers from purchasing set top boxes of Startimes and GOtv to watch CITIZEN TV, NTV, KTN and QTV. Further, the advertisement alleged that the three media houses were the exclusive vendors of Free-To-Air set-top-boxes that could enable the public to view their channels.
The affected pay TV providers subsequently filed complaints with the Authority against the misleading adverts.
Upon review of the complaints, the Authority noted the following concerns which led to the suspension of the temporary authorization:
1. That the advertisement by the three media houses was misleading to the public and was offensive to the market, and was in violation of Section 46 I (1) (i) of KICA, 1998, which states that: All licensed broadcasters shall ensure that advertisements, either in terms of content, tone or treatment, are not deceptive or are not repugnant to good taste;
2. That the tone of the advertisement, its content and timing was intended to cause confusion and disrupt the digital migration process;
3. That the digital migration framework allowed for the distribution of the ‘Free-to-Air’ signals on the digital platform under the “must-carry principle”. This was supported by the ruling of the Supreme Court of Kenya in September 2014. It allowed for the availability of Free-to-Air channels to the public through all set-top-boxes (FTA and Pay TV). As a result, it portrayed the anti-competitive conduct by the three media houses as the consumers need not be constrained to purchase a specific set top box to view the content of the three broadcasters whose content is Free-to Air;
4. That the Authority has type-approved more than 65 set top boxes which are available in the market today. GOTV and Startimes set top boxes are duly type-approved by the Authority and are therefore authentic decoders in the local market authorized to carry the Free-to-Air Channels of the three media houses under the auspices of the “Must Carry” Principle;
5. That the sale of set top boxes in Kenya is a free market. Consumers can purchase type approved set top boxes from any vendor registered by the Authority. The full list of approved set top boxes and registered vendors can be freely accessed on the Authority’s website;
6. That the Authority has neither received any application nor granted any type-approval of any set top box model from the three broadcasters, individually or collectively, for sale in Kenya. It was therefore illegal on the part of the three media houses to purport to advertise set-top-boxes that have not been type-approved by the Authority;
7. That the Authority had received a formal complaint from GOtv and Startimes that the three media houses had refused to Air their digital-migration related advertisements which is potentially an anti-competitive conduct prohibited by law.
We also note that the Authority has been a victim of such refusal to carry digital migration advertisements both in the electronic and print media owned by the three media houses, yet the advertisements are aimed at educating the public on digital migration.
Upon receipt of an appeal from Africa Digital Network to reinstate their self-provisioning licence, the Authority’s Board of Directors has held deliberations on the matter and have agreed that the Authority shall lift the suspension and resume the processing of the self-provisioning Licence only after the Consortium meets four conditions within seven (7) calendar days with effect from today, 6th February 2015:
The conditions are as follows:
(i) That the Authority penalizes the three media houses: Nation Media Group, Royal Media Services Ltd, and Standard Media Group for the misleading advertisements. Considering that this is the first such breach, a penalty of Ksh. 500,000/- be imposed upon each of the media houses.
(ii) That the three media houses commit not to use their media platforms for selective and misleading advertisements including refusal to carry advertisement on digital migration.
(iii) That the three media houses commit not to engage in anti-competitive behavior and respect the laws and regulations governing competition in the ICT sector.
(iv) That the three media houses are required to note and comply with the requirement for type-approval of all electronic equipment.
Thank you for your attention.