Briefing by Director-General on IBA/SATRA merger

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
24 March 1999
IBA/SATRA MERGER: BRIEFING
 

Documents:
Report on recommendations for the merger [Note: Copies of this document were not handed out but will soon be available from the IBA website]

SUMMARY
The Director-General explained the importance of merging these two regulatory bodies. Comments from the chairpersons of both bodies showed that they were satisfied with the planned merger.

Consultation with a Canadian expert by both IBA and SATRA had led to a document containing recommendations that were supported by both bodies as well as the Department and Minister.

The meeting was closed to the public (except for the SATRA delegation) when the committee discussed the issue of committee members communicating with SATRA candidates during the recent process of filling the SATRA councillor vacancies.

MINUTES
The Director General, Mr A Ncgaba, reminded the committee that the debate to merge the two bodies "did not start yesterday". In the pre-1994 environment, the recommendations emanating from CODESA in 1991 had been for one regulatory system for the telecommunications and broadcasting sectors. By accident of history and political circumstances, they could not be placed in one body as the urgent need for broadcasting to be seen as an independent entity drove the IBA Act to be drafted in 1992/3 whereas the Telecommunications Act emerged in 1996. However the White Paper on Broadcasting (1995/6) had again identified the need for a single regulatory system.

Operational principles also drove the need to merge these two bodies. The technologies associated with these two sectors were converging into one medium. This convergence into digital technology was bringing these distinct service areas together. Vertical regulation tended to segment services whereas similar services he asserted should be regulated together horizontally. The Director General provided numerous examples of the increasing trend towards the merging of broadcasting, telecommunications and information technology companies. These mergers and acquisitions were a clear indication of a merging industry. By not recognising convergence, one would be delaying the introduction of new technologies and services. It consequently made sense in terms of efficient allocation and use of resources to regulate them as one.

Mr Ncgaba made reference to Internet becoming available via one's decoder/dish and how interactivity (KA Band) was also becoming a reality. Electronic commerce was taking off. If one did not have a regulatory framework and clear policies to meet the rapid pace of technological change, this would create bottlenecks in developing services. The European Union had brought out a green paper that supports convergence. He concluded by stating that the merger posed no threat to the basic principles of the regulatory regime adopted in this country.

Comments by IBA and SATRA
Mr Funde (IBA) explained the process whereby the two regulatory bodies had familiarised themselves with issues related to a merger. They had studied the Canadian regulatory system and a SIDA-financed Canadian consultant had worked with the two bodies and had drawn up a report (5 March 1999) that gave recommendations on: enabling legislative options, the organic design of the merged body as well as implementation strategy. A task team drawn from both bodies had accepted the report and were pleased with the process.
Mr Maepa (SATRA chairperson) declared the merger to be on track and he encouraged the committee members to read the report regarding enabling legislative options.

Questions by committee members
Both the IFP and NNP wanted to know how one entrenched independence with this merger.

Response: The committee were referred to page 5 of the final report where the implications of Section 192 of the Constitution were clearly addressed.

Ms Smuts (DP) wanted to know if the views of the Minister as incorporated in the final report differed from those of the task team and/or the Canadian consultant. And if so, in which areas of the report?

Ms Malusi (IBA chairperson) replied that there were two or three elements where task team members held differing views but after consultation and discussion these were resolved. Ms Malusi declared that they were "very satisfied and comfortable" with the report. The SATRA chairperson said that he "echoed" this opinion and that they "are ready". They both agreed that the Minister had only asked questions of clarification and neither could recall the Minister having differing opinions about anything of consequence.

Messrs Nkosi and Kekana (ANC) wanted to know about the cost implications of these new technologies as the primary objective of the government had to be geared to providing affordable universal services to communities. Mr Kekana also pointed out that the convergence must be friendly to outside investment. Further that a challenge of convergence was in the area of content inasmuch as South Africa has an identity to promote.

Response from SATRA: Convergence can only drive down costs. The merged regulatory bodies would receive exemption from the new Competition Act and they would work closely with the "Competition Commission" in future. Competition is useful only as far as it promotes universal services.

In response to a question regarding a Southern African regional approach to this merger, Ms Malusi said that the IBA was part of a network of broadcasting regulators on the continent and there was synergy amongst them - they were not taking steps in isolation.

The chairperson then invoked Item 44 (iii) of the Joint Rules of Parliament and requested that the rest of the meeting be closed to the public. The committee members, the Director General and the SATRA delegation remained to discuss the issue of committee members communicating with SATRA candidates during the recent process of filling the SATRA councillor vacancies.