Electronic Communications Amendment Bill: briefing by Department of Communications

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
13 November 2007
ELECTRONIC COMMUNICATIONS AMENDMENT BILL: BRIEFING BY DEPARTMENT OF COMMUNICATIONS

Acting Chairperson: Ms D Ntwanambi (ANC, Western Cape)

Documents handed out:
Electronic Communications Amendment Bill [B 38-2007]
Electronic Communications Amendment Bill [B 38A-2007]
Electronic Communications Amendment Bill [B 38-2007]
Electronic Communications Amendment Bill presentation

Audio recording of meeting

SUMMARY
The Department of Communications briefed the Committee on the Electronic Communications Amendment Bill. Members were curious over the involvement of stakeholders on the Bill but were assured that consultation had taken place. It was agreed to adopt the Bill at a later meeting as a quorum of members was not present.
 
MINUTES
Ms Ntwanambi (ANC, Western Cape) was elected as Acting Chairperson in the absence of the Chairperson who was overseas.

The Department of Communications delegation comprised of Mr Norman Munzhelele Acting Deputy Director General: ICT Policy Development and Ms Lerato Monareng Assistant Director ICT Policy Development. Mr Mhloti Baloyi represented the Independent Communications Authority of SA (ICASA). The State Law Advisors were represented by Ms Pumelela Ngema and Ms Suraya Williams. A representative from the parliamentary legal services was also present.

Mr Munzhelele conducted the briefing. He noted that the purpose of the Bill was the facilitation of the licencing of public entities and to provide a licencing framework. The Act as it stood was restrictive in that it did not provide for strategic interventions by government. The Bill sought to address the issue. The strategic interventions would reduce the cost to communicate by providing infrastructure at a wholesale rate. There would also be an improvement in government service delivery and support. It would furthermore provide the much-needed bandwidth for strategic projects and for consumers in general. The amendment to Section 3 of the Act provided for the Minister to issue a policy direction after having obtained Cabinet approval. The policy direction would define the role and mandate of entities to be licenced.

Discussion
Ms Ntwanambi asked if the Department of Communications wished to add any further amendments to the Bill.

Mr Munzhelele stated that further amendments to the Bill were not anticipated.
 
Mr D Mkono (ANC, Eastern Cape) referred to the list of stakeholders that had been consulted on the Bill and asked why Sentech was not on the list. He asked whether Sentech had played any role in the process. Mr Mkono said that the proposed amendments extend beyond SA’s borders and asked how economies of scale would be upset. He further asked how the amendments would impact upon employment and on current employees in the sector.

Mr Munzhelele replied that Cabinet had made a decision for Sentech to remain a national strategic asset. He noted that Sentech was central to all issues pertaining to capacity and infrastructure. He referred to the question about the amendments extending beyond SA’s borders and said that the issue was about international connectivity lacking. The idea was thus to build capacity.

Mr Baloyi said that new players like Infraco would be much cheaper than existing players such as  Telkom. Cheaper prices meant that more jobs would be created.
 
Ms Ntwanambi asked whether MTN and Cell-C had been consulted and whether they had been part of the public hearings process.

Mr Munzhelele said that the list of stakeholders as set out in the Bill was not exhaustive. Sentech, MTN and Cell-C had made submissions.

Ms Ntwanambi asked whether objections to the Bill had been taken onto consideration.

Mr Munzhelele stated that the Department had exhausted all issues raised by stakeholders and had looked at concerns raised by operators. He noted that there was a common understanding of where government wished to go with the Bill. Mr Munzhelele pointed out that there were major benefits to all operators.

The representative from parliament’s legal services said that concerns had been raised over the apparent discretion of the Minister to make a policy direction. However concerns had been put to rest because the policy direction by the Minister would have to go through Cabinet first.

Mr Mkono was not convinced that lower prices meant increases in employment.

Mr Baloyi explained that SA’s focus was on Business Process Outsourcing (BPO). If the bandwidth cost was too high, SA would not be able to compete internationally with countries such as India for international companies to set up call centres in SA. Keeping bandwidth costs down meant the opening of call centres which meant more jobs. He also said that a thriving sector of SMMEs would be created.

Ms Mtwanambi asked what economic growth benefits were there for the SADC region.

Mr Munzhelele replied that there were a number of initiatives in the pipeline such as the Nepad-ICD Broadband Network. It meant that no matter if a country was land-locked or if a country was bordered by the sea, the bandwidth cost to either country would be the same.

Mr Baloyi said that ICASA had an organization that dealt specifically with regional issues. He noted that co-operation in the regulatory sector was not only limited to the SADC region but included the African Continent as a whole.  

Ms Ntwanambi said that the Committee lacked a quorum for the adoption of the Bill and that it would have to be done at a later meeting. She asked how tight the Bill was as far as interception and security was concerned.

Mr Munzhelele responded that security was high on the agenda. He noted that Cabinet had taken a decision to increase investments in submarine capability which played a major role in interception and security. The Bill was believed to be very tight. Mr Munzhelele felt that national security was tied in with infrastructure. If infrastructure was good, then security would be good.

Mr Douglas (ACDP) pointed out that bandwidth in the US and Europe was cheap and even free. He asked if the Bill went far enough to avoid monopolies and price hikes.

Mr Munzhelele replied that the amendments dealt with bandwidth at wholesale rates. He noted that access to bandwidth at reasonable prices would be made available to the public. It was currently not the situation. He explained that once infrastructure was in place, then prices would be lowered. It did not however necessarily mean that bandwidth would be free as it was in some countries.
 
Mr Baloyi said that ICASA was engaged in a process of converting existing licences of MTN, Cell-C etc. These providers would be competing on an equal par with Telkom. He pointed out that there would be more operators for bandwidth. Mr Baloyi said that the Act in any event made it illegal to have monopolies. ICASA’s aim was to level the playing fields.

A female ANC member noted that the absence of electricity in rural areas made the charging of cellphones an impossibility. She asked if the use of solar panels was not a possibility to solve the problem.

Mr Munzhelele replied that government had an infrastructure plan in place. He noted that the Department of Minerals and Energy (DME) was considering the possibility of solar energy as an alternative energy source and would be able to elaborate further on the issue.

Ms Ntwanambi agreed that DME would be better informed on the matter.

The meeting was adjourned.