REPORT OF THE AD-HOC COMMITTEE TO INVESTIGATE THE PROCESS OF DIGITAL (BROADCAST) SWITCH OVER (DSO) IN NIGERIA.

EXECUTIVE SUMMARY

 

On 22 June 2016, the Ad-Hoc Committee to investigate the process of digital broadcast switch over in Nigeria was constituted following the adoption of House Resolution (HR.24/2016) on a motion titled “urgent need to investigate the process of digital (Broadcast) switch over in Nigeria now slated for June 2017”

 

The Ad-Hoc Committee was mandated to investigate all Stakeholders involved in the DSO programme with a view to ensuring it meets deadline, guarantees quality and cost effective services to Nigerians. The Committee was also mandated to investigate the sale of the 700MHz bandwidth to MTN and the concession of the GUI to Inview Technology of UK as well as to ascertain whether the aggregators paid Millions of Naira for the delivery of 20 Million boxes were capable of meeting the deadline

 

The Committee collated information through regular meetings, Public Hearing, interactive sessions and oversight visits to STB Manufacturing Plants across the country.

 

The Committee, in the course of the investigation observed that the DSO process was not implemented in line with Federal Government White Paper report on digital transition in Nigeria and that the Process was not driven by any legal or legislative framework as recommended by the International Telecommunication Union (ITU).

 

The Committee observed further that Lack of political will by successive Governments and ineffective collaborations among the key stakeholders on the DSO platform accounted for the delay in the switch over as scheduled. The investigation also shows that publicity on the switch over was abysmally low to generate any meaningful awareness in the country. Other findings include proliferation of the process by Middlemen not envisaged in the DSO policy framework and undue focus of the DSO in urban areas.  The Committee also discovered that the sale of the 700 MHz bandwidth to MTN was not formally approved by the former President.

 

The Committee, on the basis of the above findings and intrigues that characterized the current DSO process, concluded that digital broadcasting as currently scheduled was unachievable. The report highlighted the need to create an enabling environment for a hitch free digital transition in the country. The Committee further recommended that analogue broadcasting should not be switched off until 95% DSO coverage is achieved in the Country.

 

2.0       INTRODUCTION

The House of Representatives adopted a Resolution on Tuesday, 22 June, 2016 to set up an Ad-hoc Committee to investigate the current process of digital switch over (DSO) from analogue transmission to digital terrestrial transmission in Nigeria now slated for June, 2017.

 

2.1    Terms of Reference of the Ad Hoc Committee

  1. To invite all the Stakeholders involved in the DSO programme with a view to ensuring that the process will meet the deadline, ensure quality and cost effective services to Nigerians
  2. To investigate the sale of the harvested 700 MHz bandwidth to MTN and the concession of the GUI value added services to Inview Technologies of the United Kingdom
  3. To ascertain whether the aggregators that were paid millions of Naira to supply over 20million Set top boxes (STB) were capable of meeting the deadline.

2.2       Membership of the Committee

The Honourable Speaker announced membership of the Ad –Hoc Committee on Thursday, 21 July, 2016 as follows:

           

  1. Sunday Marshall Katung Chairman
  2. Solomon B. Maren Member
  3. Chris Azubogu “
  4. Adekoya Abdel-Majid “
  5. Ayodele Oladimeji “
  6. Ezekiel A. Adaji “
  7. Simon Y. Arabo “
  8. T. A. Aina                                                                         “
  9. Segun Odebunmi Dokun             “
  10. Sani Mohammed Zoro “
  11. Tony Nwulu “
  12. Dozie Nwankwo “
  13. Kenneth A. Chikere “
  14. Zakari Mohammed Ningi “

 

2.3      SECRETARIAT

  1. Ipaye Abimbola R. (Mrs) Clerk

 

3.0       METHODOLOGY

The following methods were adopted by the Ad-Hoc Committee in carrying out the assignment:

  1. Regular meetings were held to discuss all matters related to the assignment.
  2. Interactive sessions and Public hearing held with Stakeholders/General Public as well as oversight visits.
  • Identified the following Federal Ministries/Agencies and Private organisations and Associations involved in the digital transition programme:
  1. The Ministry of Information and Culture
  2. National Broadcasting Commission (NBC)
  3. Nigerian Communication Commission(NCC)
  4. National Television Authority (NTA)
  5. MTN Telecommunications Ltd
  6. Radio Television And Theatre Workers Union.( RATTAWU)
  7. Nigerian Union Journalists (NUJ)
  8. Broadcasting Organisation of Nigeria (BON)
  9. Plateau Radio and Television Corporation (PRTVC)
  10. Nigeria Communication Satellite (NIGCOMSAT)
  11. Nigerian Film Corporation
  12. Digiteam Nigeria
  13. Pinnacle Communication Ltd
  14. Integrated Television Services
  15. Inview Technologies Ltd
  16. Cable Channels Nig. Ltd
  17. National Frequency Management Council (NFMC)
  18. Standard Organisation of Nigeria (SON)
  19. National Information Technology Development Agency (NITDA)
  20. Voice of Nigeria (VON)
  21. National Film and Video Censors Board (NFVCB)
  22. State Government owned Radio and Television Stations
  23. Federal Radio Corporation of Nigeria (FRCN)
  24. STB Manufacturing Companies (list of companies authorized/certified to Manufacture Set Top Boxes)
  • Gospel Digital Technology Co. Ltd
  • Zinox Technologies Limited
  • Digitune Media Technologies Limited
  • TrendCorp Africa Limited
  • M.K. Engineering & Construction Ltd
  • Trefonics Engineering LTD
  • Africa Decoder Company Limited
  • TV Enterprises
  • I-BOX Engineering Nig. Limited
  • Innoson Communications Limited
  • Design Build Concept Limited
  • STB Manufacturing System Limited (DTH FREESAT)
  • African Cable Television Limited

 

4.0       OBSERVATIONS:

From the analyses of memoranda submitted by Stakeholders and oral presentations at the Public Hearing as well as findings from interactive Sessions with Stakeholders, Oversight visit to STB manufacturing Companies and Signal distributors, the Ad-Hoc Committee observed the following:

  • The Federal Government of Nigeria being a signatory to the International Telecommunications Union (ITU) Geneva 2006 Agreement is obliged to comply with the resolution of the ITU on the transition from analogue to digital terrestrial television broadcasting.
  • The President of Nigeria inaugurated a Presidential Advisory Committee (PAC) on the transition from analogue to digital terrestrial broadcasting in Nigeria on 13 October, 2008. Its report was presented to the Federal Executive Council (FEC) by the former Minister of Information on 20 June, 2009. The White Paper drafting Committee on the transition was constituted in 2011 to review the report of the PAC. The report was approved by FEC and published as the Federal Government White Paper on the report of the Presidential Advisory Committee (PAC) on the transition from analogue to digital terrestrial broadcasting in Nigeria in April, 2012. The thrust of the White paper is attached as Annexure 1.
  • National Broadcasting Commission (NBC) the Federal Government regulator charged with implementing the transition derives its authority to give effect to the transition from analogue to digital terrestrial broadcasting in Nigeria from the White Paper. The Commission can make schemes, decisions, directives, orders, practices, rules and regulations as well as take actions, steps or measures only if such are in consonance with the provisions of the White Paper.
  • All schemes, decisions, directives, orders, practices, rules and regulations as well as actions, steps and measures of the NBC that violate the provisions of the White Paper are ultra vires and void.
  • By implication NBC can only issue licenses in relation to the transition from analogue to digital terrestrial broadcasting in Nigeria as dictated by the White Paper. The White Paper recognizes two categories of licenses namely

▪A broadcasting content license with authority to produce content.

▪A broadcasting signal distribution license with authority to provide the transmission platform for all broadcasters.

  • It is observed that after the switch off of analogue transmission the only medium for reception of signals is through the broadcast signal distributor. Therefore, to ensure optimization of existing infrastructure, existing broadcasters were expected to enter into commercial arrangement with broadcasting signal distributors on how to dispose of their broadcasting infrastructure.
  • Any other license which was issued under the guise of the transition from analogue to digital terrestrial broadcasting and related matters purportedly issued by NBC apart from the two above are in violation of the White Paper and beyond the legal power of NBC.
  • Having missed the DSO deadline twice, 2012 and 2015 precisely, the June 2017, being the third deadline which was also missed, was set as the bench mark date for digital broadcasting in Nigeria. It must be mentioned that President Muhammad Buhari launched the Pilot Scheme of the DSO in Jos, Plateau State on 30 April 2016, followed by Abuja FCT in December, 2016.
  • The Committee observed that the new strategy to implement the switch over in six states selected from the six geopolitical zones, recently unveiled by NBC, was part of efforts to achieve a cost effective switch over in the country. The switch over is currently ongoing in Plateau State and the FCT.  It is envisaged that substantial part of the country would have been covered before the end of the Year.  However, this appears unachievable in the light of the slow implementation of the process, especially in Plateau State.

5.0       Summary of Findings.

5.1       Digital Switch Over Deadlines, Guaranteeing quality and cost effective service delivery

Active contributors included the Minister of the Federal Ministry of Information and Culture, Lai Mohammed, Chairman of Digiteam, Director General of NBC, NCC, STB Manufacturing Association, Signal Distributor, Chairman of BON, RATTAWU, NUJ etc

The Committee examined the feasibility of the switch off deadline, affordability in the overall context of the regulatory and infrastructure environment and in the realm of specific indicators which measures the cost effectiveness of the current process.

  • The Committee gathered that the DSO Process was not driven by a legal or legislative framework. Failure to meet the 2012 and 2015 deadlines was due to lack of political will by successive Governments as they failed to appropriate funds for the digital transition. Budget to implement the switch over was not factored into the 2017 Appropriation Act despite the importance of the project in the light of the dateline for the DSO.
  • The DSO process was not implemented according to the Federal Government White paper on digital transition in Nigeria. Investigation revealed that the mandate of Digiteam, the body set up to implement the DSO in the country, was usurped by the Management of NBC in the past, leading to total disconnect in the policy framework as reflected in policy inconsistency and regulatory irregularities that characterised the current process.
  • The Ministry failed to effectively supervise the digital transition process in line with the policy framework. It is important to note that the decision to propose appropriate legislative and legal framework and amendments to existing laws and enactment of new legislation to realise the switch over as well as the task to ensure adequate communication with the Parliament resides with the Ministry only.
  • The Minister maintained that the Signal Distributors, Content Aggregator and the STB Manufacturing Companies were licensed during the immediate past Administration, hence oblivious of utilization of Funds generated therefrom. This was considered a huge negligence of the supervisory role of the Ministry. Government is a continuum and Projects of national benefit like the DSO should be duly implemented irrespective of a change in Government.
  • The Committee noted that NBC generated N34 billion from the sale of the 700MHz bandwidth to MTN, N650 Million as license fee from only one of the Signal Distributors and N50 million naira license fee from some of the Set top box Manufacturing Companies. These funds, being public funds, were not utilized in the manner prescribed by the National Assembly as provided in Section 80 of the 1999 Constitution and the Fiscal Responsibility Act, 2007.
  • Licensing of STB manufacturers was inconsistent with the provision of the White paper report. The manufacturers were recommended to be selected based on their financial viability and offered trade incentives to encourage local manufacturing. The off takers guarantee account arrangement embraced by only seven (7) of the Manufacturing Companies was distorted mid-way by EFCC over alleged non-compliance with the TSA policy against NBC on the N10Billion deposited in Zenith Bank following existing commitments to the Companies. The controversy did not only delayed the transition process but led to huge demurrage and interest charges on loans collected by these Companies.
  • With respect to quality and standard of DSO equipments, the Standard Organisation of Nigeria (SON) is the only body mandated by law to coordinate and develop standard for products and services in Nigeria to ensure compliance with approved standards. The Video compression and transmission standards as well as STB standard specifications were approved without adequate consultation with the organisation
  • Investigation revealed that SON was not carried along in the DSO project from its conceptualization, thereby denied the opportunity to include the standardization and conformity assessment issues into the DSO project as provided in Recommendation 21 and 22 of the White paper report on Technical standards. Different specifications/models of the STBs were observed during the investigation.
  • The White paper envisaged a self-sustaining digital transition policy given the guaranteed market for STBs. The Digiteam, in the scheme of things, was mandated to determine the end user price of STBs using economic indices, in order to ensure cost effectiveness of the transition. The Committee discovered that Subsidy on STBs, was not contemplated in the report but came up as part of efforts to meet the June 2017 DSO deadline, specifically to make STBs affordable for all categories of households in the country.
  • Investigation revealed that the subsidy was evaluated on an initial cost of N3,500 per STB box based on a box retail price of $20 when $1-150 naira. Presently, each STB cost $45. With current exchange rate of $1-N350/N500 each STB would cost between N14,000 and N21,000 with removal of subsidy. While the Subsidy was clearly unsustainable, considering Government dwindling revenue, trade incentives so far given by NBC have neither reduced the cost of STBs nor achieved massive manufacturing of the Boxes locally as envisaged by the White Paper.
  • The Committee noted that the actual cost of each STB was $40dollars; the remaining $5 dollar was paid directly to Inview Technology Ltd, the Middleware contracted by NBC. Thus, for the 620,000 Boxes imported and delivered to CCNL, the Content aggregator, observed during the oversight visit to STB Manufacturing Plants, about $3.1 million dollars have been paid directly to Inview Technology. The sum recognised as digital access fee (DAF) and shared 70:30 in favour of NBC was neither envisaged in the white paper nor driven by any existing law and thus, an unauthorized regulatory activity of NBC. This Fee collection, for good order sake, must be legalised or discontinued.
  • The DSO pilot scheme launched in Plateau State on the Platform of ITS, as earlier observed, achieved digital switch over only in Nine (9) of the Seventeen (17) Local Government Areas of the State despite the N1Billion Naira expended by the State Government on the Pilot Scheme.
  • The STBs were sold at a subsidized price of N1,500 and a N1000 Conditional Access Fee (CAF) was charged to activate the Box. The CAF which is a yearly routine fee for Subscribers was increased to N1500 in 2017 for unexplainable reasons.
  • The DTT offers 21 channels of the 30 agreed by NBC. The roll out in Abuja in December, 2016 achieved on the Platform of Pinnacle Communications offers 30 channels of programming with high picture quality, reliability and redundancy.
  • While quality and cost effective service delivery is most unlikely with the current implementation process particularly with subsidy removal by the Federal Government, allowing market forces to determine the cost and preferences of the viewership like any other electronic appliances in the market space as proposed by STB Manufacturers Association during the investigation, would defeat the essence of the DSO innovation in Nigeria.
  • The Committee observed that State Government involvement in the DSO process was part of the new implementation strategy unveiled recently by NBC. The Strategy was adopted mainly to finance bulk purchase of STBs for indigenes of the States.  While it was commended, given the social element it represents, selective implementation of the switch over within states, as observed in Plateau State was condemned.
  • The Committee condemned the proposed partnership of ITS/Startimes of China to achieve the switch over, given NTA/Startimes spread all over the Country. The Committee observed that the arrangement would require appropriating public funds for the Joint Venture. This strategy would be a disservice to the nation, hence the need to immediately redefine the nature and structure of the relationship.

 

  • Investigation revealed that the recruitment of Nigcomsat Signal Distribution Centre to serve or function as a Multiplex Operator for the DSO as arranged by the Agency would guarantee a timely and cost effective medium for the switch over in Nigeria. However, Recommendation 12 of the White paper report (b) approved that Satellite signal distribution of NigComSat should only be available to all Signal Distributors on a commercial basis rather than being exclusively subsumed as part of the infrastructure of one of the Signal Distributors.
  • The Committee submitted that facilities available within Nigcomsat should have been exhausted before foreign satellite providers and DTH/DTT operators were considered.

 

5.2 The Sale of the 700 MHz Bandwidth to MTN Communication:

Major Contributors include, The Minister of Information and Culture, Director General of National Broadcasting Commission, NCC, Inview Technology Ltd and STMAN, GSMA, MTN Communication and NFMC

  • In the bid to raise funds for the switch over process, MTN Communications was assigned a broadcasting license with associated spectrum in the 700MHz range at a special auction conducted by NBC in April 2015, where MTN was the sole bidder.
  • $171m (N34B) was paid to NBC in August 2015 for the license grant. Though NBC claimed to have received approval from the former President to auction the spectrum, evidence of this approval was not presented to the Committee.  Nevertheless, the auction has not had any significant impact either on the access or affordability of DSO in the country.
  • The Committee observed that the Federal Government has the capacity to raise a digital dividend of about $1Billion from the sale of spectrum emanating from the digital switch over from analogue to digital terrestrial broadcasting. A legislative framework on the switch over with guidelines on ownership and allocation of Spectrum is imperative in the ongoing process.
  • The Committee agreed that the bidding process for the auction of the 700MHz Spectrum to MTN was inappropriate and hasty.

 

5.3       Concession of GUI to Inview Technology of UK

  • Inview Technology Limited was engaged by NBC as contractor/consultant to the DSO process. It was contracted amongst others, to provide the middleware payment and encryption for the national common STB system in Nigeria and other complimentary services. The Company works with Paywizard group and Nagravision, SA to provide these services.  This arrangement was not contemplated in the White paper, besides; indigenous companies in the same business concern as Inview abound in the country, so it was ill advised to have engaged Inview UK for this Job.
  • The Committee discovered that the Company was not incorporated before the contract award, contrary to Procurement Act and other extant laws. NBC contracted Inview Technology Nigeria Ltd on 18 March, 2015 to provide the middleware, payment and encryption for the national common STB Software and integrated digital TV broadcast control and other complimentary services as observed above.
  • The Company, previously known as Inview Technology Limited and registered on 2 Dec, 2014 was changed to Inview Technology Nigeria Limited with the special resolution by the Company on 21 September, 2015. It registered with the Corporate Affairs Commission (CAC) on 8 December 2015. Thus, the Company was registered eight (8) months after the contract was awarded to it contrary to provisions of the Procurement Act.  It was registered to execute NBC contract on behalf of Inview UK.
  • The Company, as contracted, usurped some of the functions of the Signal Distributors and earns revenue without any investment. Inview was contracted not licensed yet its activities as the middleware to the DSO distorted plans envisaged in the policy framework especially with revenue streams of the Signal Distributors.
  • The Committee finds the legality of the digital access fee/tax collection questionable. It observed that Inview UK charges Inview Nigeria at cost for the provision of its technology and services. Under this contract arrangement, the Setup cost, operational and license fees of Inview were paid by the NBC.  The Digital access fee is used to cover any cost not already paid by the Commission.
  • The sum of N1,237,500,000 (One Billion, Two Hundred and thirty Seven Million, Five Hundred Thousand naira) was utilized to offset outstanding license fees to Nagravision, Paywizard and Inview UK for their services for the period – March, 2015 to June 2016. This nature of engagement and payment was considered a drain on the foreign exchange earnings of the country and a major obstacle to the DSO process and its success. The contract arrangement contradicts the intent and purpose of the digital switch over and directives of the International Telecommunication Union (ITU) on DSO implementation. Thus a reversal and adherence to the White Paper report is the way out.
  • The Committee discovered that Inview operates an encryption system outside Nigeria and by implication viewing control is overseas and managed by a foreign entity, besides, encryption adds to cost of Set Top Boxes.
  • While activities of the Middleware, undoubtedly made the DSO process complicated and expensive to achieve, it is important to note that subscribers are entitled to digital dividend and should be allowed to watch free.
  • Having been registered as a limited liability company in Nigeria since 2014, Inview is expected to be registered with Nigeria Social Insurance Trust Fund (NSITF), Industrial Training Fund (ITF), Federal Inland Revenue Service (FIRS) and PENCOM in line with the extant laws/regulations guiding registration processes in Nigeria. Investigation shows that the Company is not registered with PENCOM, FIRS and ITF.  However, it is registered with NSITF but yet to be issued ECS certificate. The Committee observed that 85% of the Ten (10) million Share Capital of the Company is held by Inview Africa Limited while the remaining 15% is held by Yahaya Adamu Maikori.  Investigation further shows that no annual returns to the Corporate Affairs Commission (CAC) were filed to date.

5.4     Set top Box Manufacturing Companies/Plant Integrity

The Committee analysed the licenses and registration status of each stakeholder involved in the DSO process with relevant regulatory Agencies (CAC, FIRS, PENCOM, NSITF and ITF)

  • The Committee discovered that the Set Top Box (STB) strategy was a critical Platform in the DSO process. Yet the Companies were supposed to be carefully selected not licensed as recommended in the White Paper. These Companies were to be selected based on their financial and technical competence and not dependent on free Government funds.
  • The process is supposed to be self-sustaining going by the White Paper report.
  • The Committee noted that NBC granted license to each of these Companies for N50million. However, the Commission offered some form of trade incentives to support these Companies.
  • It was observed that the switch over was delayed in most locations due to insufficient supply of STBs despite these incentives and readiness of the Signal Distributors
  • The Committee discovered that Seven (7) of the thirteen (13) licensed STB manufacturing companies participated in the off takers guarantee fund offered by NBC to facilitate speedy supply of STBs. The remaining six (6) lacked confidence in the repayment arrangement of NBC and thus refused to participate in the offer. The Committee noted that most of the Companies that participated in the offer were paid during this investigation.
  • While the Commission affirmed the establishment of a good number of STB Manufacturing Plants across the country, observations during the oversight visit of the Committee to these Manufacturing Plants revealed that only two of the Companies have functional Manufacturing Plants – Zinnox Technologies and Innoson Communications Ltd, though not in the manufacturing of STBs at the time. While four (4) of these Companies have established Assembly Plants, six (6) were at preliminary stage of sourcing and setting up facilities. However, one of these Companies, STB Manufacturing System Ltd, was not traceable. Status of STBs allocation/delivery and Guarantee fund is attached as Table 1
  • The Committee expected these Companies to be duly registered with relevant Government agencies in line with rules and regulations of registration in Nigeria. However, investigation revealed that only one of these Companies (Zinnox Technologies) is registered with the Nigerian Social Insurance Trust Fund (NSITF). Design Build Concept Limited and Zinnox Technologies only registered with Industrial Training Fund (ITF) and National Pension Commission.
  • Shareholding structure of the Companies indicated purely private owned Companies some of which were in foreign technical partnership at the time of this investigation. A legislative framework on the DSO that defines the roles and responsibilities of Government Agencies and the Private Sector would be in order.
  • The Committee discovered that foreign component of each STB is over 70% and concluded that the STB Manufacturing Companies as currently composed were inefficient to achieve local manufacturing envisioned in the White Paper. The NBC must restructure this critical platform for effective service delivery.

 

  • Signal Distributor facilities integrity
  • The Committee visited the transmission site of the two signal distributors and observed that the Integrated Television Services (ITS) transmits from Jos, Plateau State while Pinnacle Communications transmits from Abuja.
  • The Committee discovered that ITS does not have signal distribution license but was allowed to operate as a Signal Distributor, neither has it paid any license fees to NBC despite being funded by Government.
  • The quality of delivery and service is below par. Equipment deployed so far were discovered to be outmoded and lacking in redundancy. Investigation also shows that ITS has no back up to equipment failure.
  • The Committee observed that the Shareholding structure of the Company was inappropriate. The 50 Million shares of the Company were held by serving Civil Servants whereas, as the National Signal Distributor, its shares should be held in trust by the Ministry of Finance Incorporated (MFI) in line with extant laws guiding such Government interests.
  • There is an urgent need for the Federal Government of Nigeria through the Ministry of Information and Culture to redefine the structure of ITS in line with a private enterprise so that Nigerians can begin to realise the benefit or dividend of this investment.
  • A visit to the Pinnacle site revealed heavy investment in the purchase of state of the art equipments that could compete favourably with the western world. The fact that the company bought and air-freighted equipment into the country at own cost in order to meet the DSO dateline showed their commitment and confidence in the process not mentioning financial competence.
  • The only challenge by the Committee was the non-coverage of the entire FCT as envisaged. This was said to be because the mandate given to the Company by NBC was to cover FCT Metropolis only. However, areas that were not covered due to terrain and the intense rainy season would be incorporated using gap fillers
  • Its license terms and conditions were said to have been infringed by NBC actions. Its operation and business as a Signal Distributor have been disrupted by NBC’s inability to follow strictly the provisions of the White Paper report from the beginning of the process. This has ultimately deprived the Signal Distributors of anticipated income as earlier observed.
  • It is the considered opinion of the Committee that the Regulator must ensure that enabling environment is created as well as a level playing field is provided for all stakeholders in the DSO process to practise their trade without let or hindrance nor confer undue advantage on anyone to the detriment of another such that each and all participants are able to realise the benefit of their investment.

Company Profile/Compliance status of concerned Stakeholders with relevant Regulatory Agencies is attached as Table 2

 

5.6  The Content Aggregator

  • The Re-Broadcast operators using the MMDS (Multipoint Multimedia Cable Distribution System) frequencies had transited to digital since 2009, now operating under their collective business name, Cable Channels Nig. Ltd (CCNL), were licensed to undertake content aggregation.
  • The Company was purportedly licensed by NBC without due process contrary to the Procurement Act.
  • This License was not contemplated by the White Paper. Recommendation 30.4 of the White Paper on optimality of existing infrastructure, had envisaged an arrangement where existing broadcasters will enter into commercial arrangement with the Broadcasting signal distributor on how to dispose of their broadcasting infrastructure.
  • Thus, CCNL as presently positioned is an usurper in the scheme of things. It plays some of the role and competes with signal distributors who are recognized as transmission platform owners and ultimately realizes revenue that should accrue to signal distributors.
  • This regulatory irregularity as observed by NBC was a major obstacle to the realization of the DSO.
  • The Company denied being paid millions of Naira (as aggregators) for the delivery of 20 million boxes. The Committee observed that the Company was only in the business of distribution and not in supply service.  However, the Committee noted that the STB Manufacturers were purely involved in supply services and were offered off takers guarantee fund by NBC to enable manufacturing and supply of STBs.

 

6.0       Recommendations

  1. That there should be an enactment of a new broadcasting law to encompass elements of digitisation, define roles and responsibilities of the Federal/ State/Local Governments and the Private Sector.
  2. Amendments to existing legislation to incorporate Government policy recommendations on digital broadcasting in Nigeria and to legalise Digital Access Fee (DAF) and Conditional Access Fee (CAF).
  3. There should be an amendment to the NBC Act to strengthen its regulatory responsibility and develop a standard regulatory documentation for digital broadcasting as contained in the White paper report.
  4. There should be an effective collaboration between the Ministry of Information and NBC on the digital switch over process. NBC and the Ministry should develop the proposed National Media Content Policy for the Digital TV era, covering a media content master plan including media content fund (MCF) to fund content production. Management of the fund should be as proposed by the Ministry with necessary legal backing.
  5. That optimal management of Spectrum for the DSO should be ensured by the Ministry. It is equally important to confirm the total amount harvested from the sale of the spectrum by NBC and how these monies were expended.
  6. That Standard Organisation of Nigeria (SON) should be involved in the activities of STB Manufacturers to ensure standard and avoid a situation where the Country is turned into a dumping ground for substandard and obsolete equipments.
  7. That NBC should collaborate with Nigcomsat on the best way to use its facilities for the switch over to enable the country conserve foreign exchange.
  8. The Government should offer more incentives to STB Manufacturers to encourage local manufacturing of STBs but not necessarily subsidy.
  9. That the license issued to Set Top box Manufacturers who have failed or neglected to establish manufacturing plants to engage our teeming unemployed youths and create other opportunities in pursuit of local content should be withdrawn forthwith in accordance with the terms of the license and consider licensing or replacing them with Nigerian companies who have capacity in accordance with the provisions of the White Paper.
  10. The Ministry and other key stakeholders should initiate effective public enlightenment programme to create awareness on the process and expectations of the digital switch over.
  11. That the ongoing phased/State implementation of the DSO strategy should be thoroughly supervised and monitored by the Ministry. Signal Distributors must exhibit capacity to cover at least 80% of an assigned state before being allocated or proceeding to another state.
  12. That the issue surrounding the quality of equipment purchased by one of the licensed Signal Distributors as observed during the oversight tour of the Committee, should be further investigated in order to assure Nigerians and ensure standard in line with global best practices. The actual amount paid to ITS by NBC must be ascertained for the records.
  13. NBC should coordinate activities of STB Manufacturers and the Content Aggregators in the manner recommended by the white paper.
  14. That Inview Technology should be further investigated on public procurement infractions observed during the investigation as well as status of funds generated and utilized.
  15. The Ministry and NBC should ensure regional collaboration on DSO timelines/final switch off date.
  16. That Analogue broadcasting should not be switched off until 95% DSO coverage is achieved in the Country.
  17. That all parties that were not contemplated by the White Paper but were somewhat brought in albeit inadvertently by the regulator in furtherance of this process should be excised in the spirit of equity and integrity of the process as well as the country in general.

 

7.0    CONCLUSION

Digital switch over is a global phenomenon and an international obligation binding on member states. The benefits are enormous. Seamless digital transition was achieved in most countries through effective collaboration among Stakeholders with necessary funding regime coined in a legislative framework for the switch over. It was a carefully planned process that struck a balance between economic interests and social needs.

 

It is our considered opinion and recommendation that for the DSO process to progress successfully there must be a total reversal to and strict adherence to the Government White Paper upon which the process is predicated.

 

 

Fortunately, Nigerian broadcasting stations will not experience any digital signal disturbance from neighbouring countries as none of the countries in the ECOWAS sub region have migrated to digital broadcasting.

The Ad-Hoc Committee hereby expresses appreciation to the Leadership of the House of Representatives for the opportunity to serve.

 

 

Hon. Sunday Marshall Katung                                                                Ipaye Abimbola R.

Chairman                                                                                                       Clerk

 

 

 

 

 

 

 

 

 

 

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