THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable

Case No: 1039/2015

In the matter between:

e.tv (PTY) LTD                                                                             FIRST APPELLANT

NATIONAL ASSOCIATION OF MANUFACTURERS
OF ELECTRONIC COMPONENTS (First Group)                  SECOND APPELLANT

SOS SUPPORT PUBLIC BROADCASTING
COALITION                                                                                 THIRD APPELLANT

MEDIA MONITORING AFRICA                                               FOURTH APPELLANT

and

MINISTER OF COMMUNICATIONS                                        FIRST RESPONDENT

MINISTER OF TELECOMMUNICATIONS
AND POSTAL SERVICES                                                   SECOND RESPONDENT

INDEPENDENT COMMUNICATIONS
AUTHORITY OF SOUTH AFRICA                                           THIRD RESPONDENT

UNIVERSAL SERVICE AND ACCESS
AGENCY OF SOUTH AFRICA

FOURTH RESPONDENT

SOUTH AFRICAN BROADCASTING
CORPORATION SOC LIMITED                                               FIFTH RESPONDENT

ELECTRONIC MEDIA NETWORK LTD                                   SIXTH RESPONDENT

ASSOCIATION OF COMMUNITY
TELEVISION – SA                                                             SEVENTH RESPONDENT

SOUTH AFRICAN COMMUNICATIONS FORUM                EIGHTH RESPONDENT

SENTECH SOC LTD                                                                NINTH RESPONDENT

CELL C (PTY) LTD                                                                 TENTH RESPONDENT

TELKOM SOC LTD                                                          ELEVENTH RESPONDENT

TELLUMAT (PTY) LTD                                                      TWELFTH RESPONDENT

NATIONAL ASSOCIATION OF
MANUFACTURERS OF ELECTRONIC
COMPONENTS (Second Group)                                THIRTEENTH RESPONDENT

Neutral Citation: e.tv (Pty) Ltd v Minister of Communications (1039/2015) [2016]
ZASCA 85 (31 May 2016)
Coram:
Lewis, Saldulker, Swain and Mbha JJA and Baartman AJA
Heard:
9 May 2016
Delivered:   31 May 2016
Summary:  Legality: an amendment by the Minister of Communications of the Digital
Broadcasting Migration Policy in 2015 that did not follow a process of consultation
was irrational and in breach of the principle of legality: amendment did not achieve
its purpose and was thus irrational and invalid on that basis too: the Minister
purported to bind regulatory authorities and broadcasters and thus acted ultra vires:
amendment reviewed and set aside.

___________________________________________________________________

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Prinsloo J sitting as
court of first instance).
1 The appeal is upheld with the costs of two counsel.
2 The respondents are ordered to pay the costs of the appeal jointly and severally.
3 The order of the court a quo is set aside and replaced with the following:
‘ (a) The application is granted with the costs of two counsel where so employed.
(b) Clause 5.1.2(B)(a) of the Digital Migration Policy is declared unlawful and invalid
and is accordingly set aside.’
___________________________________________________________________
JUDGMENT

Lewis JA (Saldulker, Swain and Mbha JJA and Baartman AJA  concurring)
[1] This appeal concerns the legality of an amendment to the Broadcasting Digital
Migration Policy (the policy), made by the Minister of Communications, Ms Faith
Muthambi, in March 2015. The policy has had a long gestation. It was first published
in 2008 by the then Minister, Ms Ivy Matsepe-Casaburri. It was amended in 2012 by
her successor, Ms Dina Pule, and again in 2013 by her successor, Mr Yunus Carrim.
The amendment in early 2015 by the present Minister is alleged to have been
effected unlawfully for a number of reasons, both substantive and procedural.

[2] The first appellant, e.tv (Pty) Ltd, a national television broadcaster, supported
by several other parties, has challenged the amendment, but the application to

review it and set it aside was opposed not only by the Minister, who is the first
respondent, but also by other broadcasters, including the South African Broadcasting
Corporation SOC Ltd (SABC), the fifth respondent, and Electronic Media Network
Ltd (M-Net), the sixth respondent, as well as a group of representatives of the
National Association of Manufacturers of Electronic Components (NAMEC), the
thirteenth respondent (the NAMEC second group). The first group in NAMEC, the
second appellant, supports e.tv’s application to set aside the amendment, as does
SOS Support Public Broadcasting Coalition (SOS), the third appellant, and Media
Monitoring Africa (MMA), the fourth appellant. The latter bodies are associations
formed in the public interest and have no financial interest in the outcome of the
dispute. None of the parties question the standing of the different groups
representing NAMEC which take different positions.

[3] The policy was published in terms of s 3(1) of the Electronic Communications
Act 36 of 2005 (ECA). Both the Constitution and the ECA empower the Minister of
Communications to make policy regarding broadcasting. The policy in question deals
with digital migration of broadcasting signals. The process of dealing with migration
to digital broadcasting of a television signal began in 2005, following a global trend.
At present, signals sent to television aerials (terrestrial television) are in analogue
form. This is the process through which the majority of the population in the country
receives their television broadcast.  There are only two free-to-air commercial
terrestrial broadcasters at present, the SABC and e.tv. There are also a number of
community broadcasters who use analogue signals, as does M-Net, but it charges a
fee to subscribers who use it. Other licensed broadcasters who charge a fee for
broadcasting use digital signals which are received through a satellite dish and a
decoder.

Digital Migration
[4] Terrestrial television, which is free-to-air, is presently available on four
channels, three run by the SABC, and one by e.tv. Analogue technology entails the
transmission of the television picture and the sound in their entirety. The policy was

designed to change this to require that all signals be broadcast digitally. Digital
broadcasting entails converting the picture and the sound into compressed digital
information and transmitting it so compressed. When the signal is received it is
converted by a device back into a full picture and sound on the viewer’s television
set. The reason for changing to digital technology is to free up signal space for other
purposes, and is universally acknowledged to be a necessary process. Indeed,
South Africa co-ordinates its use of the signal spectrum with other countries to
ensure that there is no interference between broadcasting signals. The International
Telecommunications Union, to which South Africa is a party, has agreed that there
should be a switch from analogue to digital broadcasting, the due date for which was
June 2015. That did not happen for a variety of reasons, not least of which is the
current litigation. The process in terms of which the shift from analogue signals to
digital signals will take place is referred to as the ‘digital migration process’ as all
terrestrial viewers will have to migrate from receiving analogue broadcasts to
receiving them in digital form. Digital migration has thus not yet occurred.

[5] The migration process is unfortunately costly, because most people in South
Africa do not possess television sets that have an in-built device to convert signals
broadcast digitally: these are becoming increasingly common, but are unaffordable
at present by the majority of television viewers who are poor. Television sets that do
not have built-in devices to convert the digital signal will require set-top boxes (ST
boxes or STBs, as they are referred to in the policy) to receive  and convert the
digital signal. Such boxes will not be required indefinitely, but at least for the
foreseeable future while the majority of people in the country still possess television
sets that can receive only analogue signals.

[6] It is estimated that more than eight million households currently rely on
terrestrial television. Thus at least eight million ST boxes will have to be
manufactured and supplied at a cost of some R600 each. This amount is beyond the
reach of at least five million households. The government has resolved to subsidize
the cost of five million ST boxes and provide them at no cost to those who need
them.

Encryption/decryption or conditional access
[7] The contested issue is whether the subsidized ST boxes should be
manufactured so as to enable them to decrypt signals that are encrypted. e.tv wishes
to encrypt the signals that it transmits for a variety of reasons, and so considers that
the subsidized ST boxes should have decryption capability (referred to, generally as
‘encryption capability’). The first group of NAMEC, which will manufacture the ST
boxes, also argues that encryption is desirable, as do SOS and MMA. e.tv initially
took a different stance in 2008, but subsequently changed its approach. The SABC,
M-Net and the second group of NAMEC oppose the introduction of decryption
capability. It is not necessary to determine which approach is better, although the
debate has some bearing on the legality of the 2015 policy as amended, and I shall
turn to it in due course. Encryption is also referred to as conditional access.

[8] It is agreed by all concerned, however, that the ST boxes should have some
form of technological control. This would determine the extent to which ST boxes can
be managed from and interact with the point from which a broadcast emanates.  The
first policy, published in 2008, stated that the ST boxes would ‘have a control system
to prevent STBs from being used outside the borders of South Africa and to disable
the usage of stolen STBs’ (clause 5.1.2.2). It also provided that ST boxes would
have ‘capabilities to unscramble the encrypted broadcast signal so that only fully
compliant STBs made or authorized for use in South Africa can work on the network’
(clause 5.1.2.7).  In order for ST boxes to have decryption capability they must be
loaded with particular software, hardware and decryption keys.

[9] But there appears to be some confusion about the control requirement in
subsequent iterations of the digital migration policy. In February 2012, Minister Pule
published amendments to the policy, and clause 5.1.2.7 was changed. It provided
that ST boxes should:
‘include a STB control system that will protect the investment by government in its STB
subsidy scheme, as well as the electronic manufacturing industry. A robust STB control will
also benefit consumers by ensuring that they do not have to own multiple boxes.

Government believes that the needs of consumers should be at the forefront of the DTT
[digital terrestrial television] process; the STB control system provided will be interoperable
with other systems’.
There is no express reference to encryption. But the national standard for ST boxes,
formulated by the South African Bureau of Standards and published by Ms Pule in
June 2012, makes it clear that conditional access was intended.

[10] The standard states that:
‘The main functional elements specified for security are: a) a secure over-the-air software
and bootstrap loader; b) a mechanism to prevent STB decoders from functioning in non-RSA
DTT networks; c) STB control system that will enable mass messaging.
Detailed security requirements are not specified in this document. The STB decoder
manufacturer is responsible for the implementation of the security requirements specified by
the free-to-air individual broadcasting service licensees in South Africa and for the proper
configuration of the chipsets.
Manufacturers can obtain the security requirements from the free-to-air individual
broadcasting service licensees in South Africa . . . .’ (My emphasis.)

[11] Implicit in this is the requirement that ST boxes should have encryption
capability. It was thus understood by all parties that encryption, or conditional
access, was required in terms of the 2012 policy. That this was the position adopted
by Minister Pule is underscored by the answering affidavit in an application brought
by e.tv against the Minister in 2012 (e.tv v Minister of Communications & others
[2012] ZAGPJHC 268 per GC Pretorius AJ) in which e.tv challenged the validity of a
decision by Minister Pule that the ST boxes be manufactured and supplied by
Sentech Ltd. The deponent on behalf of the Minister stated, in relation to the
appointment of Sentech as the ST box manufacturer, that Sentech had over the
years operated a full conditional access system for encrypting content and gained
experience in operating such a system. It continued:

‘However, for the existing Conditional Access to meet the requirements of the STB control as
defined in the policy and subsequently in terms of the SABS (SANS 862) standard, there
was a need for Sentech’s system to be upgraded.’
I shall refer to the judgment of the high court as e.tv 2012 and discuss it more fully
later.

[12] It is to be noted that all pay television operators, like M-Net and Multichoice
(DSTv) (both owned by Naspers Ltd) broadcast using encryption technology to
ensure that only fee-paying subscribers can watch their broadcasts. e.tv argues that
it is necessary also for free-to-air broadcasters to prevent the importation or sale of
poor quality products. SOS and MMA argue in addition that, to ensure high quality
broadcasting (in high definition format), and to prevent piracy, encryption is
necessary for terrestrial television as broadcasters will not be able to acquire high-
quality programmes from studios unless they can assure them of the security of
broadcasts. This is necessary to meet the objectives for which they campaign –
open, competitive and high-quality broadcasting. The Minister, the SABC and M-Net
argue otherwise. Whether e.tv and the other appellants are correct is not, as I have
said, in issue. What is at issue is whether the policy was radically changed after
2012.

[13] In December 2013 a different Minister of Communications, Mr Yunus Carrim,
gave notice that he intended to change the policy. In his statement published for
comment, he said that the proposed amendments would ensure that the ‘extent of
monopolisation’ would be reduced and competition encouraged ‘by creating space
for new players in the pay television market’. This cannot be done without encrypting
broadcast signals. Cognisant of the decision in e.tv 2012, that held that an attempt
by Minister Pule to determine who would manufacture the ST boxes was invalid,
Minister Carrim said that while government has the right to make policy on ST Box
control, it could not prescribe the supplier, the operator of the control system, or the
type of control to be used. He said that ‘broadcasters are free to decide whether they
want to use control or not’. That was said in the context of denying that a decision
had been made about the management of a control system, and stating that

government was not prescribing encryption or conditional access. He also stated that
the cost per ST box for control would be about R20, and that broadcasters wanting
to use a control system would have to pay government for that cost. Minister Carrim
presented these proposals to cabinet on 18 February 2014.

[14] e.tv and other broadcasters made submissions to the department in early
2014. e.tv and SOS welcomed the compromise proposed – that broadcasters who
wished to encrypt their signals could do so at their own cost. SOS issued a press
statement noting that the Carrim proposals were a ‘valiant compromise’, the result of
which was that ‘STBs would have the capacity to have a control mechanism through
encrypted television signals, but that this potential would only be implemented if
broadcasters wish to do so’.

[15] The SABC and M-Net, on the other hand, opposed the proposed amendment.
The SABC said in its submission that, in the public interest, there should not be
conditional access for free-to-air broadcasting. It would detrimentally affect
consumers, driving up the cost of ST boxes, and the global trend was against it. M-
Net claimed that the Minister did not have the power to prescribe conditional access,
citing the decision in e.tv 2012 as authority in this regard. It is thus clear that the
2013 proposed amendments were understood by all concerned to permit encryption
capability on the subsidized ST boxes, albeit at the broadcaster’s expense.

[16] However, the proposed amendments were not made. After the general
elections in May 2014 the department of communication was divided into two
departments and Ms Faith Muthambi became Minister of Communications. (The
other department was that of Telecommunications and Postal Services).

[17] No progress was made in so far as digital migration was concerned
throughout 2014. But on 18 March 2015 the Minister published amendments to the
policy. In effect, encryption capability was dropped from the subsidized ST boxes.

The SABC and M-Net have argued that the amended clauses are no different in
substance from those in the 2012 policy and in the proposed 2013 amendments. The
provisions referred to earlier, and the responses to the Carrim proposals, show that
not to be correct.

[18] Clause 5 of the policy was amended by the insertion of new provisions. These
are:
‘5.1.2(A) In keeping with the objectives of ensuring universal access to broadcasting
services in South Africa and protecting government investment in subsidized STB market,
STB control system in the free-to-air DTT will be non-mandatory.
5.1.2(B) The STB control system for the free-to-air DTT STBs shall-
(a) not have capabilities to encrypt broadcast signals for the subsidized STBs; and
(b) be used to protect government investment in subsidized STB market thus supporting the
local electronic manufacturing sector.
5.1.2(C) Depending on the kind of broadcasting services broadcasters may want to provide
to their customers, individual broadcasters may at their own cost make decisions regarding
encryption of content.’ (My emphasis.)

[19] The result of this is that the subsidized ST boxes will not have encryption
capability. If e.tv or any other broadcaster wishes to broadcast encrypted signals it
shall have to bear the costs of supplying five million ST boxes at its cost, which is
prohibitive and defeats the object Minister Carrim sought to achieve. This new
approach has drawn different responses and interpretations, and the Minister herself
claims that it does not preclude e.tv from supplying the necessary software for
decryption after the ST boxes have been manufactured. I shall turn to that argument
shortly.

[20] The core of the appellants’ complaint is that, despite Minister Muthambi’s
statement, on publication of the amended policy, that she had taken into

consideration submissions made by stakeholders on the amendments proposed in
December 2013, she did not consult them, nor the statutory bodies charged with the
implementation of the ECA, ICASA (the Independent Communications Authority of
South Africa established by s 3 of the Independent Communications Authority Act 13
of 2000 and referred to in the ECA as ‘the Authority’) or USAASA (the Universal
Service and Access Agency of South Africa established by s 80 of the ECA, and
referred to in the ECA as the ‘Agency’). Both ICASA and USAASA were cited as
respondents by e.tv, but neither has opposed the relief sought and we do not know
what their respective positions are. They have been entirely silent in the litigation.

[21] The grounds of review raised by e.tv in its application before the court a quo
were that the amendment, not being preceded by a consultation process, was
unlawful and should be set aside; that although it was an amendment of a policy, it
nonetheless amounted to administrative action (the implementation of policy) and
should be set aside under the Promotion of Administrative Justice Act 3 of 2000
(PAJA); that it was irrational and thus breached the principle of legality, and that it
was ultra vires. Prinsloo J in the Gauteng Division of the High Court (Pretoria)
rejected all of e.tv’s arguments and refused the application. He based much of his
reasoning on the assumption that the 2015 amendment was not different in
substance from that adopted in 2012, and the proposed amendments advanced in
2013. The learned judge did, however, grant leave to appeal not only to e.tv but also
to SOS, the first NAMEC group, and MMA, which were cited as respondents by e.tv,
but which supported its application.

Was consultation necessary?
[22] Section 3 of the ECA is headed ‘Ministerial Policies and Policy Directions’.
Section 3(1) provides that:
‘[T]he Minister may make policies on matters of national policy applicable to the ICT
[information, communications and technology] sector, consistent with the objects of this Act
and of the related legislation in relation to-
. . .

(d) the application of new technologies pertaining to electronic communications services,
broadcasting services and electronic communication network services; . . .
Section 3(1A), inserted in the ECA in 2007, provides that:
‘The Minister may, after having obtained Cabinet approval, issue a policy direction in order
to-
(a) initiate and facilitate intervention by Government to ensure strategic ICT
infrastructure investment; and
(b) provide for a framework for the licensing of a public entity by the Authority [ICASA] . .
. .’
Section 3(2) deals with the issuing of policy directions to either ICASA or USAASA in
relation to certain matters.

[23] Section 3(5) is at the centre of the dispute. It reads:
‘When issuing a policy under subsection (1) or a policy direction under subsection (2) the
Minister-
(a) must consult the Authority or the Agency, as the case may be; and
(b) must, in order to obtain the views of interested persons, publish the text of such
policy or policy direction by notice in the Gazette-
(i)
declaring his or her intention to issue the policy or policy direction;
(ii)
inviting interested persons to submit written submissions in relation to the
policy or policy direction in the manner specified in such notice in not less
than 30 days from the date of the notice;
(c) must publish a final version of the policy or the policy direction in the Gazette.’

[24] Section 3(6) deals with amendments to policy directions. It reads:
‘The provisions of subsection (5) do not apply in respect of any amendment by the Minister
of a policy direction contemplated in subsection (2) as a result of representations received
and reviewed by him or her after consultation or publication in terms of subsection (5). (My
emphasis.)

[25] Interestingly, the requirement of publication and consultation in respect of
policies was introduced only in 2014. Yet previous policy amendments were in fact
published and there was consultation and submissions were made, as evidenced by
Minister Carrim’s proposed amendments published for comment in December 2013.

[26] The question thus arises as to whether Minister Muthambi was obliged by the
ECA to publish the amendment she introduced and to consult about it before it was
‘enacted’. She does not deny that consultation was necessary. Rather, in the
Department’s answering affidavit, the Acting Director-General of the Department of
Communications asserted that the submissions of e.tv and other stakeholders made
in response to Minister Carrim’s proposed amendments were taken into account by
the current Minister and that she had ‘met with various stakeholders on aspects of
the BDM policy to attempt to reach agreement’. Those stakeholders were not
identified, however, and e.tv states, without any contradiction, that it was not
consulted about the difference in approach taken by Minister Muthambi.

[27] The Minister also maintains that it is still open to e.tv to provide technology for
decryption in the subsidized ST boxes, at its expense, despite the wording of clause
5.1.2(B)(a) which states that the ST boxes ‘shall not have capabilities to encrypt
broadcast signals’. The answering affidavit also states that it is open to free-to-air
broadcasters to ‘invest in whatever technology they want in their own STBs and the
relevant manufacturers will manufacture such STBs to meet their requirements’. This
would require the television viewer to use at least two ST boxes which is what the
previous versions of the policy wished to avoid. The appellants point out that it is not
possible to ‘retrofit’ the subsidized STBs with decryption capability, and that the
Minister had adopted contradictory positions in this regard. Which option is the
Minister saying is possible? Providing an additional ST box for each viewer, or,
despite the express wording of the amended policy, fitting the subsidized ST boxes
with encryption capability?

[28] The contradictory positions adopted show, as e.tv points out, considerable
confusion, first as to the effect of her amendment, and second as to the meaning of
the previous policy and proposed amendments to that, which I discussed earlier, the
last of which was that free-to-air broadcasters could provide encryption capability on
the government subsidized STBs at their expense. Had the Minister consulted
interested parties such as the appellants she might have understood the position
better and dispelled the confusion. I shall discuss the varied responses of Minister
Muthambi, and her apparent confusion, in relation to the review ground of
irrationality.

[29] Accepting, as I do, that the amendment does introduce a completely different
provision in relation to conditional access in the policy, what required the Minister to
consult interested parties and, especially, ICASA and USAASA? The court a quo
found that even if s 3(5) of the ECA obliged the Minister to have consulted on an
amendment to the policy, she had done so by considering the submissions made
pursuant to the proposed amendments in 2013. But that conclusion was premised on
the assumption that the encryption amendment in 2015 was not markedly different
from the proposed amendment in 2013, which in my view is not correct.

The interpretation of s 3(5) of the ECA
[30] e.tv argues that one must interpret the word ‘issue’ in s 3(5) so as to include
‘amend’. The word should not be confined to the original ‘enactment’ of the policy.
This would achieve the purpose of s 3(5), which is to promote openness and proper
consultation in the process of shaping policy that affects the public. All the more so, it
would not undermine the roles to be played by ICASA and USAASA. Such an
interpretation would also, it is argued, give effect to the fundamental values of the
Constitution – openness, transparency and accountability (Doctors for Life
International v Speaker of the National Assembly & others [2006] ZACC 11; 2006 (6)
SA 416 (CC) paras 110-116).

[31] Although a fundamental tenet of statutory interpretation is that words should
be given their ordinary linguistic meaning, this is subject to certain ‘riders’: statutory
provisions should be interpreted to give effect to the purpose of the statute; they
must be properly contextualized; and they must be construed consistently with the
Constitution: Cool Ideas 1186 CC v Hubbard & another [2014] ZACC 16; 2014 (SA)
474 (CC) para 28.

[32] Requiring consultation prior to effecting an amendment would also, argue the
appellants, facilitate the involvement of ICASA and USAASA: s 3(4) of the ECA
provides that both bodies, in exercising their powers and duties under the Act and
related legislation, must consider both policies and policy directions made by the
Minister. And s 3(9) provides that ICASA may make recommendations to the
Minister on policy matters in accordance with the Act. Section 4 of the ECA
empowers ICASA to make regulations on a variety of matters including technical
matters necessary or expedient for the regulation of certain services. It makes no
sense for significant policy amendments to be made by the Minister with no
obligation to consult ICASA, USAASA or other interested parties.

[33] The legislature expressly provided in s 3(6) that amendments to policy
directions need not be published or be subject to a consultation process if they were
the result of submissions made after publication or consultation. It is silent as to
policy amendments. The court a quo held that the inference to be drawn from the
distinction is that amendments to a policy, as opposed to a policy direction (which
would usually be a direction to one of the statutory bodies), need not be published or
made subject to a consultation process in terms of the ECA. The finding is puzzling,
for it seems to me to be quintessentially a situation where a member of the Executive
should be consulting on important matters of public concern.

[34] In my view, s 3(6) simply excludes the need to publish amendments to policy
directions. That means that amendments to policies must be published. The default
position is that policy amendments must be published for comment and there must

be consultation about them. There is no need to strain at the construction of the word
‘issue’. Section 3(6) makes it quite clear that only amendments of policy directions,
made as a result of representations received, need not be published again for
comment. Policy amendments, on the other hand, must be published for comment
and a process of consultation followed. This construction gives effect to the
constitutional values of openness, participation and accountability and thus achieves
the purpose of s 3 of the ECA. In any event, the principle of legality itself imposes the
obligation.

The principle of legality
[35] In Kouga Municipality v Bellingan & others [2011] ZASCA 222; 2012 (2) SA 95
(SCA) this court held that a bylaw determining liquor trading hours passed in 2006
was invalid because it had not been published as required by s 160(4)(b) of the
Constitution and s 12(3)(b) of the Local Government: Municipal Systems Act 32 of
2000. The argument of the Municipality was that it had published the bylaw in 2004
for comment. This court rejected the argument since the version published for
comment in 2004 was markedly different from that enacted in 2006. Cloete JA said
(para 9) that the significant differences between the two versions:
‘lead to the inevitable conclusion that the Municipality did not comply with the provisions of
the Constitution or the Systems Act . . . . The Municipality contended that the 2004 and 2006
publications were part of one continuous process. But the changes to the bylaws made
available pursuant to the first publication in 2004 were far-reaching.  . . . [N]ot every change
has to be advertised otherwise the legislative process would become difficult to implement;
but here the two sets of proposed bylaws were so markedly different that republication of the
revised draft was necessary to meet the legislative requirements of the Constitution and the
Systems Act. That did not happen. The second publication in 2006 could not have served to
alert the public that the Municipality intended to adopt an amended bylaw to regulate liquor
trading hours.’

[36] The same view was taken in relation to publication and consultation in
Earthlife Africa (Cape Town) v Director-General: Department of Environmental
Affairs and Tourism & another 2005 (3) SA 156 (C) paras 62 and 63. There Griesel J

held that where a decision-maker is apprised of new information before making the
decision, an interested party ought to be afforded a hearing in respect of that new
fact.

[37] There are of course differences between bylaws, administrative decisions and
policies. But the same principle underlies the requirement of publication of a policy
for comment: openness and accountability, the foundations of a democratic State,
require the participation of those affected. The court a quo recognized this principle
but considered that the 2015 encryption amendment was not markedly different from
the 2013 proposals published for comment. As I have indicated, that was simply
incorrect. The SABC and M-Net also do not contend that the principle in Kouga is not
applicable when dealing with policy amendments. They argue that the court a quo
correctly found that there was no marked difference between the 2015 amendments
and previous versions of the policy. That argument cannot be sustained.

[38] Where a policy or policy amendment impacts on rights (and in this case on
powers and duties in the case of ICASA and USAASA) it is only fair that those
affected be consulted. Fairness in procedure, and rationality, are at the heart of the
principle of legality. In Albutt v Centre for the Study of Violence and Reconciliation &
others [2010] ZACC 4; 2010 (3) SA 293 (CC) the Constitutional Court dealt with the
President’s power to pardon offenders in terms of s 84(2)(j) of the Constitution. The
President had announced a special pardoning dispensation for offenders convicted
of politically motivated crimes, but who had not participated in the Truth and
Reconciliation Commission process. One of the questions raised was whether,
before exercising the power to pardon, the President was required to afford a
hearing to the victims of the offences. Ngcobo CJ said that the question to be asked
was whether such a hearing was rationally related to the achievement of the objects
of the process. He said (paras 50-51):
‘All this flows from the supremacy of the Constitution. The President derives the
power to grant pardon from the Constitution and that instrument proclaims its own
supremacy and defines the limits of the powers it grants. To pass constitutional muster
therefore, the President’s decision to undertake the special dispensation process, without

affording victims the opportunity to be heard, must be rationally related to the achievement of
the objectives of the process. If it is not, it falls short of the standard demanded by the
Constitution.
The Executive has a wide discretion in selecting the means to achieve its
constitutionally permissible objectives. Courts may not interfere with the means selected
simply because they do not like them, or because there are more appropriate means that
could have been selected. But, where the decision is challenged on the grounds of
rationality, courts are obliged to examine the means selected to determine whether they are
rationally related to the objective sought to be achieved. What must be stressed is that the
purpose of the enquiry is to determine not whether there are other means that could have
been used, but whether the means selected are rationally related to the objective sought to
be achieved. And if, objectively speaking, they are not, they fall short of the standard
demanded by the Constitution.’

[39] In Minister of Home Affairs & others v Scalabrini Centre & others [2013]
ZASCA 134; 2013 (6) 421 (SCA) Nugent JA (para 69) said that the process by which
a decision is taken, in contradistinction to the merits of the decision, might be
‘impeached for want of rationality’. That was the view too of the Constitutional Court
in Democratic Alliance v President of the Republic of South Africa & others [2012]
ZACC; 2013 (1) SA 248 (CC), where Yacoob ADCJ said (para 34):

‘It follows that both the process by which a decision is made and the decision itself
must be rational. Albutt is authority for the same proposition.’
And (para 36):
‘The means for achieving the purpose for which the power was conferred must include
everything that is done to achieve that purpose. Not only the decision employed to achieve
the purpose, but also everything done in the process of taking that decision, constitutes
means towards the attainment of the purpose for which the power was conferred.’

[40] In Scalabrini, the Director-General of Home Affairs had taken a decision to
close down a refugee reception office in Cape Town. He had done so without
consulting the Standing Committee for Refugee Affairs, as he was obliged to do. He

had in fact simply informed the Standing Committee of the decision which he had
already taken. Moreover, his representative in Cape Town, although charged
specifically with consulting various stakeholders, including the respondent, an
organization that assists refugees, did not do so properly.

[41] This court concluded that the failure to consult was not rational. Not all
decisions taken without consulting interested parties would be irrational, said Nugent
JA (para 72). But in this case the duty had arisen because of the particular
circumstances.
‘Such a duty will arise only in circumstances where it would be irrational to take the decision
without such consultation, because of the special knowledge of the person or organization to
be consulted, of which the decision-maker is aware. Here the irrationality arises because the
Director-General, through his representatives, at the meeting . . . acknowledged the
necessity for such consultation. That he did so is not surprising, bearing in mind that the
organisations represented at that meeting included not only the Scalabrini Centre, with its
close links to the refugee community, but also the United Nations High Commissioner for
Refugees, and organisations close to the challenges relating to alleged refugees.’

[42] The duty to consult arises from the value of fairness underlying the principle of
legality. It is recognized in English law too. In R (on the application of Moseley) v
Haringey London Borough Council [2014] UKSC 56 the court held that a public
authority’s duty to consult before making a decision could arise in several ways
including the common law duty to act fairly. The court (para 25) repeated the
requirements of fairness in the consultation process set out in the earlier decision of
R v Brent London Borough Council, ex p Gunning (1985) 84 LGR 168:
‘First, that consultation must be at a time when proposals are still at a formative stage.
Second, that the proposer must give sufficient reasons for any proposal to permit of
intelligent consideration and response. Third, . . . that adequate time must be given for
consideration and response, and, finally, fourth, that the product of consultation must be
conscientiously taken into account in finalizing any statutory proposals.’

[43] Failure to consult where a marked change in policy is made, and the
Minister’s failure to consult ICASA and USAASA is, e.tv argues, especially serious
because the encryption amendment has implications for the statutory and regulatory
mandates of the two bodies. As the independent authority created to regulate
broadcasting, ICASA’s independence is enshrined in the Constitution (s 192). It
licenses broadcasters and determines the terms of their licences. If a broadcasting
licensee, such as e.tv, encrypts its signal, and the five million ST boxes subsidized
by government do not have encryption capability, then e.tv might breach the
conditions of its licence, and the digital migration regulations passed in 2012 (GN
R1070, GG 36000, 14 December 2012).

[44] USAASA also has a role to play in implementing the policy. The ST boxes will
be subsidized out of its budget, in turn allocated by the Department of
Telecommunications and Postal Services. It would be the body procuring the ST
boxes and it is most curious that the Minister did not consult that body where the
costs were of great importance. The Minister did not claim to have consulted either
ICASA or USAASA. And as I have indicated earlier, they did not play any role in this
dispute and we do not know what their stance is.

[45] In my view, the failure by Minister Muthambi to consult ICASA and USAASA is
even more egregious given their statutory duties. (The court a quo considered that
they must in fact have been consulted. But it based this conclusion on flimsy
evidence and the Minister says nothing in response to the e.tv allegations about
failure to consult these bodies.) So too the failure to consult the appellants, all of
whom had an interest in the policy, was quite simply irrational. Thus the ECA’s
silence on the requirement of consultation in respect of the amendment of the policy
is of no moment. The Minister was required by the principle of legality, which
encompasses the obligation to act rationally, to consult the statutory bodies and all
broadcasters with an interest in the digital migration process. Minister Muthambi’s
failure to consult, based upon her misunderstanding of what the 2015 amendment
signified, was taken in a procedurally unfair manner, and was irrational.

Irrationality in the amendment itself
[46] Minister Muthambi sought to achieve two goals that were not consonant with
the amended policy itself.  She intended to indicate that government would not
subsidize encryption, but that free-to-air broadcasters would have the right to encrypt
their broadcasts. This would have been no different from the proposals made by
Minister Carrim in 2013. But that is not what the amendment states nor what it
achieves. Her response to the appellants’ objections is that the only issue that e.tv
did not want to accept was that it pay for encryption facilities itself. But in fact the
amended clause 5.1.2(B)(a) expressly prohibits encryption for the subsidized ST
boxes, despite the further clause inserted (5.1.2(C)) which states that ‘individual
broadcasters may at their own cost make decisions regarding encryption of content’.
Government had made a ‘political decision’, she said, that it would not bear the costs
of encryption, and thus would not permit encryption capability of the subsidized ST
boxes.

[47] Yet, the policy permitted broadcasters to broadcast their signals in encrypted
form. So the poorest members of society would not have access to television of high
quality, including high definition display. (The SABC and M-Net deny that this
assertion is correct, but as I have said, this appeal is not concerned with whether the
one view or the other is right.) The result is that if e.tv or any other broadcaster
wishes to encrypt its signal it will have to provide additional ST boxes to the five
million households that are given ST boxes by government. That does not achieve
the purpose of the policy. Rationality review is ‘about testing whether there is a
sufficient connection between the means chosen and the objective sought to be
achieved’: Minister of Defence and Military Veterans v Motau & others [2014] ZACC
18; 2014 (5) SA 69 (CC) para 69 fn 101.

[48] The rationality of the 2015 amendment must be determined at the time when
it was made. The court a quo’s view that the advantages or disadvantages of
encryption in some way impacted the rationality enquiry was thus at odds with the
requirement of objective rationality underlying the decision itself. Minister Muthambi

did not object to e.tv’s wish to encrypt its signals. She wished to ensure that
broadcasters were free to decide whether or not they wanted to encrypt signals, but
not at government’s expense. But the policy does not achieve this.

[49] By precluding the subsidized ST boxes from having encryption capability the
Minister has made it impossible for e.tv and other broadcasters to broadcast
encrypted signals to television viewers who have subsidized ST boxes. This may
place e.tv in breach of its licence conditions. It is not possible for e.tv – or anybody
else – to fit these ST boxes with encryption capability after manufacture. It would be
required to manufacture additional ST boxes for the five million households that
cannot afford them and distribute them at no charge. It cannot do that. The cost
would exceed two years of its revenue, some R3 billion.

[50] The effect of this, as pointed out by the first group of NAMEC, is that once the
analogue signal is switched off, free-to-air broadcasters will not be able to encrypt
their signals and all those with television sets that do not have ST boxes with
encryption capability will not be able to access high-definition content that can
compete with the pay-television broadcasts. This is the view also of the Competition
Commission, which advocates conditional access, as well as that of SOS and MMA.
All the appellants advocate encryption in order, inter alia, to facilitate competition
amongst broadcasters. The effect of the amendment is that high-quality television
will not be available to the poorest in our society, and competition will be stifled. The
ability of free-to-air broadcasters to encrypt their signals, as allowed for in in clause
5.1.2(C), is thus illusory. The Minister has thus not achieved her purpose and the
amendment is irrational for that reason alone.

[51] That irrationality is exacerbated by the Minister’s own misunderstanding of the
effect of the amendment. The appellants, the SABC and M-Net agree that the five
million subsidized ST boxes will not have encryption capability. The result is that if
e.tv encrypts its signal, its broadcasts will not be seen by those who have only the
subsidized ST boxes. If e.tv wishes to avoid that result it will have to spend some R3

billion in providing additional ST boxes with encryption capability to five million
households at no cost to them.

[52] The Minister recognized this in responding to e.tv’s founding affidavit. The
Acting Director-General stated that e.tv misunderstood the effect of the amendment.
He said:
‘Paragraph 5.1.2(B)(a) is a policy statement that in respect of the free STBs government
shall not incur the costs of providing encryption capabilities. In 5.1.2(C), it is made clear that
the FTA broadcaster is free to provide encryption broadcasts at its own cost. This means
that the FTA broadcasters would bear the cost of providing encryption capabilities. It is up to
the FTA broadcaster to elect the means for providing such encryption capabilities, and the
manufacturer to supply them, to ensure that its broadcasts are received.’
The Acting Director-General stated later:
‘It is correct that the 5 million subsidized STBs shall not be able to decrypt encrypted signals.
This is due to the fact that the government will not spend money to install encryption
capabilities in such STBs. The reason for this is simply that encryption capability is not
required for purposes of broadcasting digital migration policy for which the government is
providing subsidized STBs.’

[53] On the other hand he stated elsewhere:
‘As I understand it, there is nothing preventing the applicant from developing its own
software that would enable its viewers to receive and view encrypted broadcast signals. The
applicant may even investigate the possibility of doing so through the government subsidized
STBs as long as it pays for it.
It is correct that the encryption amendment was intended to clarify government’s
position that government subsidized STBs will not have encryption capability. The need for
this clarification came as a result of the submissions made to the Minister despite the fact
that encryption capability was removed from the Policy in February 2012.’

That is not correct, as I have shown. On this interpretation e.tv could encrypt the
government subsidized boxes at a cost of only R100 million, which would be
commercially feasible.

[54] Which position of the Minister are we to accept? They are at variance and the
commercial implications are stark. The Minister’s confusion as to the effect of the
amendment shows its irrationality, and for that reason too it is in breach of the
principle of legality and invalid. The appeal must succeed on the ground that the
amendment was made in an irrational and thus unlawful manner and is inherently
irrational as well.

The ultra vires challenge
[55] In addition to the rationality challenge, e.tv contends that the encryption
amendment is ultra vires in terms of the ECA. This is because the Minister is not
permitted to make binding decisions on ST box control issues that affect free-to-air
broadcasters. The Minister is empowered by the ECA and the Constitution to make
policies, but she cannot regulate. The regulatory authority is ICASA. e.tv argues that
by purporting to prohibit subsidized ST boxes from having encryption capability
(‘shall not have capabilities to encrypt broadcast signals for the subsidized STBs’)
the Minister has transgressed her policy-making powers.

[56] Section 192 of the Constitution requires national legislation to ‘establish an
independent authority to regulate broadcasting in the public interest, and to ensure
fairness and a diversity of views broadly representing South African society’. That
legislation is the ICASA Act referred to above, section 4 of which determines
ICASA’s functions and powers. In Trinity Broadcasting (Ciskei) v Independent
Communications Authority of South Africa [2003] ZASCA 119; 2004 (3) SA 346
(SCA) Howie P confirmed that ICASA is ‘an independent arbiter and it must be left to
act independently, without governmental pressure, real or apparent, of any kind’
(para 32).

[57] ICASA is given regulation-making powers by s 4 of the ECA. It is specifically
given the power to regulate broadcasting services in chapter 9 of the ECA. The
Minister, by contrast, is given no regulatory powers in respect of broadcasting by the
ECA, nor can she make binding determinations. That was the effect of the decision
in e.tv 2012, which held that the Minister does not have the power to prescribe to
free-to-air broadcasters how they should manage ST boxes, or to prescribe or make
binding decisions relating to ST box control. The decision of Pretorius AJ in e.tv 2012
was not appealed against by Minister Pule, who announced that the department
accepted the decision. So too did the SABC and M-Net.

[58] The court in e.tv 2012 stated (paras 37 and 38):
‘If one has regard to the clear distinction in the ECA between the authority and power
of the Minister to make policy, and the power and obligation of ICASA to consider such
policy when regulating the broadcasting industry, it is clear to me that the Minister does not
have the power to prescribe to free-to-air broadcasters how they should manage set top
boxes. Even if she had such powers, her decision would have been administrative action as
part of policy execution rather than policy formation.

It follows from what I have set out that the Minister has no legal power to prescribe or
make binding decisions relating to set top box control.’

[59] The SABC, M-Net and the second group of NAMEC argue that the policy
amendment is different from the direction to appoint Sentech as the manufacturer
and supplier of the ST boxes. That is correct. But Minister Muthambi purported to
bind free-to-air broadcasters. M-Net argues that the amendment must be interpreted
in its context: the policy provides that it is the framework for digital migration, and is
published to inform and guide the process. It aims to establish a policy environment
within which the migration process is implemented and will assist government to
meet its commitments to the ‘people of South Africa as well as the global community,
especially the developing world’. M-Net points out that the words ‘will’ and ‘shall’ are
used interchangeably, and that the use of ‘shall’ in this context does not impose any
duty.

[60] But the effect of the encryption amendment, as the Minister states in response
to the application, is that the government will not subsidize the costs of encryption.
The subsidized ST boxes will have no such capability. That has the effect of
requiring free-to-air broadcasters to procure ST boxes with encryption capability for
the eight million households that rely on terrestrial television. It will not be able to
recover the costs from the five million households that cannot afford them. That
seems to me to be a decision that has binding effect.

[61] e.tv relies for its argument that the amendment is ultra vires on Minister of
Education v Harris [2001] ZACC 25; 2001 (4) SA 1297 (CC). That matter concerned
a challenge to a policy enacted in terms of the National Education Policy Act 27 of
1996. The policy purported to determine the age at which children could first attend
an independent school. Harris challenged the validity of the policy on the ground that
the Minister did not have decision-making powers in terms of that Act. The
Constitutional Court held that the Act did not confer on the Minister the power to
make decisions.

[62] The policy stated that it gave notice of the ‘age requirements for the
admission of learners to an independent school or different grades at such a school’.
It continued: ‘A learner must be admitted to grade 1 if he or she turns seven in the
course of’ a calendar year. ‘A learner who is younger than this age may not be
admitted to grade 1. . . .’

[63] Sachs J said (para 11):
‘Policy made by the Minister in terms of the National Policy Act does not create obligations of
law that bind provinces, or for that matter parents or independent schools. . . . There is
nothing in the Act which suggests that the power to determine policy in this regard confers a
power to impose binding obligations. In the light of the division of powers contemplated by
the Constitution and the relationship between the Schools Act  [The South African Schools
Act 84 of 1996] and the National Policy Act, the Minister’s powers under section 3(4) are

limited to making a policy determination and he has no power to issue an edict enforceable
against schools and learners. Yet the manifest purpose of the notice is to do just that.’

[64] M-Net seeks to distinguish Harris on the basis of the peremptory language in
the notice; the objective of the notice, which was to achieve uniformity between
independent and state schools by extending a rule in the Schools Act to independent
schools and the fact that the Minister did not dispute that he purported to bind
independent schools.

[65] The SABC argues that ICASA, like the authorities regulating schools, must
consider policies but does not have to follow them. The policy, it argues, does not
fetter ICASA. Nothing in the policy prevents ICASA from making a decision that the
subsidized ST boxes would have encryption capability.

[66] In my view, Minister Muthambi has issued an edict. She has decreed that the
subsidized ST boxes shall not have encryption capability. USAASA has said nothing
on this score. It cannot make a financial decision that is not consonant with the
policy. The Minister’s decision does purport to bind. And that is borne out by the
statements in the answering affidavit that say that government will not bear the costs
of encryption and that if e.tv wishes to broadcast an encrypted signal it must provide
the ST boxes to consumers at its cost. That, as has already been said, makes it
commercially impossible for e.tv to encrypt its broadcast signals despite the
statement in clause 5.1.2(C) that it is free to do so.

[67] In my view Minister Muthambi did purport to issue a binding direction, which
she was not entitled or empowered to do. For this reason too the encryption
amendment is invalid. The court a quo thus incorrectly found that the amendment
was not ultra vires. The appeal must succeed on this ground as well.

The PAJA challenge
[68] e.tv, in the court a quo, challenged the policy amendment on the basis that it
amounted to administrative action (implementation of a policy). It failed in this
respect as well. On appeal, it maintains the challenge, but did not argue it at the
hearing. In view of the findings that I have made as to the irrationality of the
amendment, and as to it being ultra vires, it is not necessary to consider this ground
of review as well.

Costs
[69] The last issue is that of costs. The four appellants are entitled to the costs of
the appeal, including those occasioned by the employment of two counsel. The
respondents should bear joint and several liability for these costs. The appellants are
also entitled to the costs of the application in the court a quo.

Order
[70] For these reasons I order that:
1 The appeal is upheld with the costs of two counsel.
2 The respondents are ordered to pay the costs of the appeal jointly and severally.
3 The order of the court a quo is set aside and replaced with the following:
‘ (a) The application is granted with the costs of two counsel where so employed.
(b) Clause 5.1.2(B)(a) of the Digital Migration Policy is declared unlawful and invalid
and is accordingly set aside.’

_______________________
C H Lewis
Judge of Appeal

APPEARANCES

For the First Appellant:
S Budlender (with him J Berger and R
Tshetlo)

Instructed by:

Norton Rose Fulbright South Africa Inc.,
Sandton
Webbers, Bloemfontein

For the Second to Fourth Appellants:
M du Plessis (with him L Kelly)

Instructed by:

Nortons Inc, Sandton

McIntyre & Van der Post, Bloemfontein

For the First Respondent:

N H  Maenetje SC (with him K Tsatsawane)
Instructed by:
Gildenhuys Malatji Inc, Pretoria
Honey Attorneys, Bloemfontein

For the Fifth Respondent:
A R Bhana SC (with him J Mitchell) (Heads
of Argument also prepared by A Friedman)
Instructed by:

Ncube Incorporated Attorneys, Rosebank
Phatshoane
Henney
Attorneys,
Bloemfontein

For the Sixth Respondent:

D N Unterhalter SC (with him M Norton SC)
Instructed by:

Werksmans Attorneys, Sandton

Matsepes Inc, Bloemfontein

For the Thirteenth Respondent:

T Motau SC (with him L Kutumela)
Instructed by:

Mota Attorneys, Waterkloof Glen

Motaung Attorneys, Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT
OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

31 May 2016

STATUS

Immediate

e.tv (Pty) Ltd v Minister of Communications [2016] ZASCA 85

Please note that the media summary is intended for the benefit of the media
and does not form part of the judgment of the Supreme Court of Appeal.

In a judgment handed down today, the SCA found that, in amending the
Broadcasting
Digital
Migration
Policy
in
2015,
the
Minister
of
Communications, Ms Faith Muthambi, had acted irrationally both procedurally
and substantively. It thus reviewed and set aside the amendment, and upheld
the appeal aginst the decision of the Gauteng Division of the High Court.

The policy was first published in 2008. It was designed to facilitate South
Africa’s shift from analogue terrestrial television to digital terrestrial television
which is necessary to free up signal space. Viewers who presently receive
analogue broadcast signals (via aerials) will require set top boxes (STBs) to
watch television in the digital terrestrial environment. The majority of viewers
in the country will need STBs to convert the digital signal on their televisions.
The poorest television viewers will not be able to afford STBs, which will cost
some R600 each.

The government proposes to subsidize the procurement of STBs required by
five million households. It is estimated that there are eight million viewers who
still rely on terrestrial television. (Other viewers use a satellite dish and
decoder which can decrypt encryted signals.) The amendment to the policy
precluded free-to-air broadcasters from encrypting their television signals as it
stated that the subsidized STBs would not have encryption capability. An STB
that is equipped with encryption technology can decrypt signals that are
encrypted. This is the technology used by pay television broadcasters such as
M-Net and DSTv.

There is a debate as to whether encyption is desirable for free-to-air
broadcasts. The appeal did not concern the merits of that debate, but the
process that preceded the amendment and its rationality were at issue. The
amendment constituted a fundamental departure from previous iterations of
the policy. The policy first published in 2008 was that the subsidized set top
boxes would have encryption technology. It was amended in 2012 but there
was no change in this regard. In 2013 the then Minister, Mr Yunus Carrim,
published various amendments for comment. He proposed that free-to-air
broadcasters such as the first appellant, e.tv (Pty) Ltd, pay for encryption
technology on the subsidized STBs. e.tv welcomed the 2013 amendments.
The SABC, M-Net and DSTv opposed them. Encryption capability would
enable free-to-air broadcasters such as e.tv to offer paid subscription services
in competition with M-Net and DSTv. Encryption was supported by two public
interest organizations, SOS Support Public Broadcasting Coalition and Media
Monitoring Africa, as well as some members of the National Association of
Manufacturers of Electronic Components.  The proposed amendments were
not effected.

In early 2015 Minister Muthambi published the encryption amendment which
precludes the subsidized STBs from having encrytion technology. She did this
without consulting interested persons and the two bodies established to
regulate and distribute television, the Independent Communications Authority
of South Africa (ICASA) and the Universal Service and Access Agency of
South Africa (USAASA).

e.tv brought an urgent application for an order reviewing and setting aside the
encryption amendment on the basis that there had been no consultation and
that the amendment was inherently irrational. It stated that the subsidized
STBs ‘shall not have capabilities to encrypt broadcast signals’ and that
‘individual broadcasters may at their own cost make decisions regarding
encryption of content’.

The Gauteng Division refused the application on the basis that the Minister
had consulted about the 2013 proposed amendments, and that the
amendment was not irrational. e.tv, supported by a group of NAMEC, SOS
and MMA, appealed against this decision. The Minister, the SABC, M-Net and
a second group of NAMEC opposed the appeal.

The SCA found that the amendment was a fundamental departure from
previous policy; that the Minister was required by the Electronic
Communications Act 36 of 2005 to consult ICASA, USAASA, and
broadcasters before changing policy, and that she had not done so. The
amendment was thus made unlawfully. It was also irrational as it sought to
achieve two purposes: avoid government paying for the encryption of the
subsidized STBs and allow free-to-air broadcasters to pay for encryption. By
precluding encryption of the subsidized STBs she did not achieve that result.
The SCA also held that the Minister had exceeded her powers