Dear Minister

RE : BROADCASTING AMENDMENT BILL 15 AUGUST 2002 ("THE BILL"))

We respectfully, and urgently, address you in connection with the Bill published in the Government Gazette on 15 August 2002, of which we have only now become aware.

We have a serious concern regarding possible ambiguity in the Bill which, if construed against us, could prejudice our business operation, relative to our competitors. This would certainly result in closure of our business, which has been in existence for almost 30 years. Should this happen, the livelihood of over 600 people who are employed by us and our technical service agents would obviously be affected. Moreover, a further consequence may be that some 50 000 of our customers may no longer be able to afford TV viewing.

The ambiguity relates particularly to clause 21 under the heading: "Substitution of Section 27 of Act 4 of 1999", as read with the changes in definition. The definition clauses to which we refer are: (e), (i), (n), (x) and (y).

Our contention is as follows:

The current Act provides for a television viewers licence, in terms of which a domestic user may have as many sets as he/she wishes provided that he/she has at least one licence for the household.

A dealer is obliged, upon supplying a TV set to a domestic user, to ensure that that person has a TV licence. Once the TV licence is produced, the dealer is entitled to supply a TV set to that customer.

A TV dealer may be a retailer, rental company or possibly a financial institution. A person wishing to obtain a TV set has the option to purchase it either for cash or on hire purchase or alternatively to rent the TV set. The decision as to which choice is made depends purely on price and the availability of credit.

Rental is merely an alternative means of acquiring the use of a TV set. In general, most customers prefer to purchase but opt for the rental alternative where the monthly installment is lower than the HP installment. Rental is highly price-sensitive.

Teljoy is a TV rental company which competes with retailers. Over the period since 1975, the rental proportion of the total market has diminished considerably. The decline has been in line with the availability of credit through financial institutions and retailers in a highly competitive environment.

We understand that the effect of the Bill may be construed as meaning that a TV rental company is differentiated from any other dealer in TV with the following consequences:

The TV rental company may be required to obtain a separate licence for every set which it owns;
The licence may be payable irrespective of whether the set is in stock or supplied to a customer;
If the set is supplied to a customer, who already has a TV licence for other sets in use in his home, he nevertheless has to pay for a second TV licence.
If a customer buys four TV sets, for four different rooms in his house from Ellerines, Protea, Hi Fi Corporation, or any of the other thousands of retailers, that customer requires only one TV licence. On the other hand, if that same customer were to rent four sets from Teljoy, he would require four separate licences.
Clearly, it is iniquitous and illogical for a situation to prevail where a customer purchasing TV sets needs only one licence to cover the household, but a customer renting TV sets needs separate licences for every set.

As indicated above, TV rental is selected when the monthly installment required to be paid by a customer is less than the equivalent installment required on hire purchase. If the rental company and/or the customer were required to pay an additional amount for a TV licence, then clearly rental would not be viable and we will be forced out of business.

The effect of the Bill is a radical change from the current position whereby householders require one licence notwithstanding more than one television set.

From the above, we are sure that you will appreciate that the Bill as drafted, discriminates against Teljoy relative to its competitors. It also prejudices consumers and members of the public who, by virtue of the new proposals in the Bill, may be deprived of the opportunity of viewing television broadcasts at more affordable prices.

We are sure that you will agree that it is iniquitous that a customer should require only one licence when purchasing the TV set but multiple licences when renting a set. We are also sure that there would be no intention to discriminate against a business which was instrumental in bringing television to the public in an affordable way since the very introduction of television in South Africa. We accordingly respectfully request that you review the Bill to ensure that any discrimination against us is removed.

We believe that the legislation could be remedied by:
stipulating that a television rental company is a dealer, in the same way as any other retailer;
that the obligation to hold a licence rests with the viewer whether he purchases or rents his/her television set;
the dealer (whether a renter or retailer) should ensure that the customer is in possession of a TV licence before agreeing to supply a TV set to the customer, and
renewal of the licence should always be the obligation of the viewer as is currently the case.

All that we are requesting is that we be placed on equal footing with every other dealer in TV sets and that our customers should not be unfairly treated by being faced with additional costs to view television broadcasts.

Should you require any further information or access to any of our records, kindly communicate with us and we will be happy to oblige. If you wish us to propose specific wording, we would be happy to invoke assistance from our legal advisors and suggest the wording to you.

Preliminary discussions with our legal advisors indicate that it is difficult to deal meaningfully with the Bill in the absence of regulations. We are advised that there are no regulations under the Broadcasting Act, 1999. Our legal advisors suggest that we urge you to postpone debate on the Bill until draft regulations are available for comment so that the entire situation may be considered by all stakeholders.

We trust that this earnest representation will receive your favourable consideration and hope to hear from you in the near future.

Thanking you.

Yours sincerely
TELJOY GROUP (PTY) LTD.






T B RUTSTEIN
EXECUTIVE CHAIRMAN