Electronic Communications Amendment Bill [B38B-2007]: Minister’s Input and adoption

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
20 November 2007
ELECTRONIC COMMUNICATIONS AMENDMENT BILL [B38B-2007]: MINISTER’S INPUT AND ADOPTION

Chairperson: Ms M P Themba (ANC)

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

Audio recording of meeting

SUMMARY
The Minister and Deputy Minister were present to explain the importance of this Bill, particularly for rural areas, as it will allow government to invest in infrastructure. It will reduce the cost to communicate by providing infrastructure at a wholesale rate. This will ensure that internet services will be made available in rural areas, since private operators would be unwilling to invest in areas which were not economically viable. The Bill itself allows government to license public entities, such as Infraco, for this purpose.

The Committee agreed to the adoption of the Bill without amendments.

MINUTES
The Chair explained that an informal briefing had been held the previous week and that the present meeting would provide more detail on the Bill. If possible the Committee would adopt the Bill.

Department of Communications (DOC) briefing on Electronic Communications Amendment Bill
Ms Mashile Matlala (Acting Chief Director: DOC) said that the Department’s presentation would provide the Committee with more detail on the Bill. The previous week’s interaction had merely provided an overview.

Ms Lerato Monareng (Assistant Director: Policy Unit: DOC) read through the presentation document, which dealt with the Bill in terms of its
(i) Purpose
(ii) Background
(iii) Strategic Interventions

Ms Matlala said that the presentation document had captured the purpose of the amendment. Earlier this year the controversial Infraco Bill was introduced by the Department of Public Enterpprises. The problem arose when Infraco, which was a one hundred percent state owned enterprise, had to be licensed. Since the current legislation did not make provision for the licensing of state-owned enterprises by Government it became necessary to amend the Electronic Communications Act (ECA). Failure to amend the ECA would have resulted in Infraco competing with other network operators. This would have proven to be too costly for Government, especially since the purpose of this entity was to provide affordable services in underserviced areas.

Discussion
Ms N Ntwanambi (ANC-Western Cape) asked if the Department anticipated the introduction of any further amendments in future.

Ms Matlala responded that if the Department were to approach the Committee with amendments in future, it would not be because they overlooked anything, but because of various challenges which arose. The Department had, for example not been aware of what the Department of Public Enterprises had been doing in terms of infrastructure development and the Infraco process, and it was only due to that process that the need for this amendment had become apparent. The amendment of the ECA had definitely not been on the Department’s agenda for 2007. The problem was that it would have been impossible to commence with the Infraco licensing without amending the ECA first. Thus, although it was not in the Department’s plans to further amend the ECA, one had to bear in mind that the Information and Communications Technologies sector was constantly evolving which could necessitate such amendments in future. Further challenges included the fact that operators made it very difficult for the Department to deliver on their mandate since their focus was on profit.

The Chair requested the Minister to comment on the Bill.

Dr Ivy Matsepe-Casaburri (Minister of Communications) said that she had attended a meeting in Brazil the previous week, during which participants had highlighted the country’s inability to get the private sector to deliver services in areas ‘where the markets did not allow’. It was agreed that the preferred approach was to get Government to invest in infrastructure, after which the private sector would get involved. The same issue had arisen in Connect Africa, which had been organized by the International Telecommunication Union. In South Africa this approach would result in internet access being extended to rural areas. In addition, where local municipalities had no access to these services, they could obtain a local area license for underserviced areas. This would be done by the Independent Communications Authority of South Africa (ICASA) which would declare the area to be underserviced.

Mr Radhakrishna Padayachie (Deputy Minister of Communications) added that the Bill was necessary in order to correct a defect in the Act. It had omitted to include the State’s right to intervene in the licensing of public entities. This was necessary due to the situation which had been inherited by the current Government, which included serious deficiencies in services in the rural areas. Private companies would not invest in these areas, since this investment would not be profitable. The result was that people in these areas remained marginalized. There was a need for Government to correct this situation, so as to close the gap between the first and second economies. The Bill sought to give Government that power. It was not aimed at being anti-competition, but merely to enable Government to grow the economy in a way that would benefit all South Africans.

Adoption of the Bill
The Chair read the motion of desirability, which was agreed to by the Committee. The Chair asked the Committee to indicate whether they supported Clauses 1 to 5 of the Bill.

Ms Ntwanambi indicated her support for the Bill.

Mr D Gamede (ANC-KZN) seconded the motion.

The members of the public were then requested to excuse themselves from the meeting as the matters on the agenda had been completed.