Comments by Cell C (Pty) Ltdon the Telecommunications Act Amendment Bill

(written submission to complement oral presentation of September 26, 2001)

Introduction

Cell C (Pty) Limited (Reg No.99/07722/07) is a licensed mobile telecommunications service operator. Cell C welcomes the opportunity to propose changes to the Telecommunications Act Amendment Bill (B65-2001), which are included herein.

This submission focuses mainly on issues which Cell C considers to be relevant to the mobile sector. In order to keep this submission brief, Cell C has not included its comments on other areas in the Bill, which we would welcome the opportunity to present during the oral representations.

The main aim of this sumbission is to present comments on areas of concern as highlighted in the right columns of the tables attached, along with proposed changes to the currrent wording included in the Bill. The proposed changes are highlighted as follows:

In submitting our comments, it has been our aim to seek clarity on the Bill and avoid future risks of misinterpretation which may be material to the fundamental objectives of fair competition and level-playing-field.

Definitions

Proposed Changes

Comments

Base station

base station is the network element connected in a public switched telephone network, or a mobile cellular network, normally comprising a wireless radio-transceiver, which is used to connect the respective network with an end-user.

This definition was not provided in the Bill but is used in suggested changes by Cell C for the provision of further clarity to the definition of ‘fixed-mobile’.

End office

end office means a location or a place on the public switched telecommunications network where user lines or trunks, or user lines and trunks, are interconnected a central office to which the telecommunications subscriber is connected; The last central office before the subscriber’s telephone equipment. This office establishes the line to line, line to trunk, and trunk to line connections. Such links could be wireline or air-interface.

This definition has been replace with wording normally associated for the purposes of defining ‘end office’

Fixed mobile service

fixed-mobile serviceservice means a connection to the public switched telephone network that will be provided by the holder of a public switched telecommunication service licence by means of a wireless–access connection between such licensee’s end-office and the end-user’s premises, whereby access is restricted to 1 base station specifically designated for the connection of the end-user’s terminal equipment, provided that nothing in this definition shall exempt the provider of a fixed mobile service from requiring holdingholding a licence under section 30 or section 37

Cell C understands fixed–mobile to mean a ‘facility’ providing a ‘means of connection’ in a PSTN, as repeatedly stated by the Department of Communications in its quest to provide explanation as to "fixed-mobile". As such, the term "services" has been deleted, which would be open to misinterpretation.

Reference to Section 37 (mobile cellular licence section) has been deleted because ‘right to provide a connection’ does not require a ‘service licence’, and if kept may be open to misinterpretation.

Internet Protocol (IP)

Internet Protocol (IP) means standard protocol designed for use in interconnected systems of packet-switched computer communication networks. Internet protocol provides for transmitting blocks or packets of data (called datagrams) from sources to destinations, where sources and destinations are hosts identified by fixed-length addresses.

Cell C has added the term "Internet Protocol" (IP) to support the amended definition of "Voice over Internet Protocol".

Local Access

local access means the connection between a customer’s premises and an end office of the network operator

Local access is used within the Bill, but a definition had not been provided.

Number Portability

number portability means a capability whereby a subscriber to a telecommunication service who so requests can retain his or her telephone number on a PSTN to PSTN or mobile to mobile public telecommunication network independently of the licensee providing the service;

The definition of "number portability" has been clarified to distinguish between the fixed-line market and the mobile cellular market. The changes have been made reflecting the original portability intention as referred to in Gazette Volume No. 433, No.22533, 30 July 2001 of 2001.

Public Switched Telecommunications Networks

Public Switched Telecommunication Networks means the telecommunication systems installed or otherwise provided, maintained and operated by a public switched telecommunication licensee for the purpose of providing public switched telecommunication services and fixed mobile services;

The term "fixed-mobile services" has been deleted because, as stated above, it is understood that fixed-mobile is to be an infrastructure component and not an additional service to what the "fixed-line" operators provide (e.g. unlike with the case of mobile cellular operators, unlimited mobility is not offered).

Voice over IP (Internet Protocol)

Voice over Internet Protocol means a series of techniques permitting transmission of a voice over the internet or through one or more telecommunication facilities using internet protocol.’’ voice transmitted over a data network by way of Internet Protocol (IP).

A simplification of the definition is proposed and, in conjunction with the added definition of Internet Protocol, this should enhance the meaning of Voice over IP.

Legislation

  • Sections
  • Page (pg)
  • Paragraph of the Bill

Proposed Changes

Comments

30A

pg 5

para.5

(1) (a) Within six months after the date of commencement of this paragraph or such longer period as the Minister may determine, the mobile operators Vodacom and MTN may apply to the Authority for access to the radio frequency spectrum in the 1800 MHz frequency band to provide mobile cellular telecommunication services and such other services as the mobile operators are, from time-to-time, licensed to provide.

The reference to allocating 1800 MHz frequency to mobile operators is inaccurate in so far as Cell C already has been allocated some 1800 MHz frequency, which was done in accordance with the 3rd mobile cellular licensing process. The changes proposed herein reflect the existing state of affairs.

 

(1)(b) Within 30 days of receipt of the application contemplated in paragraph (a) the Authority shall assign to each mobile operator, who duly applies a radio frequency spectrum in the 1800 MHz frequency band or additional radio frequency spectrum as the case may be —

After obtaining its initial allocation within the scope of its licence application, Cell C’s rights to apply for ‘additional spectrum’ should be equal to the rights of Vodacom and MTN, although this is likely to be over a longer time frame than what is clealry the intention in this paragraph..

(contin-)

2) (a) The second national operator and Telkom shall each be deemed to be a holder of a radio frequency spectrum licence in the 1800 MHz frequency band to provide public switched telecommunication services, fixed-mobile services and such other services as the second national operator, from time-to-time, is licensed to provide.

There was inconsistency between Telkom being "deemed" in 2(a) and Telkom "may apply" in 2(b). Changes so that 2(a) is SNO - specific and 2(b) is Telkom – specific

The expression "fixed-mobile services" has been removed because it inaccurately reflects the intention. "Fixed-mobile" is intended to be a form of connectivity, not actual service. This is persistent throughout the Bill and it is proposed this be amended accordingly.

 

(b) Within six months after the date the second national operator is granted issued a public switched telecommunication service licence, or such longer period as the Minister may determine, Telkom may apply to the Authority for a radio frequency spectrum licence in the 1800 MHz frequency band to provide public switched telecommunication services, fixed-mobile services and such other services as Telkom, from time-to time, is licensed to provide.

The use the term "issued" is more appropriate than "granted"

(contin-)

(c)(ii) subject to such conditions and obligations as the Authority may specify in that licence.

(d) For purposes of paragraph (c)(i), the Minister may specify by notice in the Gazette a single or multiple payment schedule pursuant to which the second national operator and Telkom, respectively, shall make payment, and the terms and conditions of such payment.

 

(contin-)

(4) In determining the fees on a differential basis for each respective operator, contemplated in subsections (1)(b)(i) and

(2)(c)(i) the Minister shall take into account—

  1. MHz pair per population per licence year;
  2. provision of paired or unpaired spectrum;
  3. technical and administrative cost of spectrum management, including projected costs for Authority involvement in frequency co-ordination contemplated in subsection (3); and
  4. any other matter that is consistent with section 2.

Suggested modifications to the reference of fee determination to emphasise the fact that fees may differ depending on market position and frequency requirements of respective operator.

30B

pg 6

para 5

(1) (a) Within six months after the date of commencement of this paragraph or such longer period as the Minister may determine, the mobile operators may apply to the Authority for a third generation telecommunication radio frequency spectrum licence to provide mobile cellular telecommunication services and such other services as the mobile operators, from time-to-time, are licensed to provide.

(b) The Authority shall issue to each mobile operator a third generation telecommunication radio frequency spectrum licence contemplated in paragraph (a)

(2) (a) The second national operator, mobile cellular operators and Telkom shall each all be deemed permitted to apply to be a holders of a third generation telecommunication radio frequency spectrum licences to provide public switched telecommunications services telecommunications services fixed-mobile services and such other services as the second national operators and Telkom, from time-to-time, are licensed to provide.

Modifications have been made that are similar in nature and in principle to those given above concerning 1800 MHz

(contin-)

(b) Within six months after the date the second national operator is granted issued a public switched telecommunications service licence, or such longer period as the Minister may determine, Telkom may apply to the Authority for a third generation telecommunication radio frequency spectrum licence to provide public switched telecommunication services, fixed-mobile services and such other services as Telkom, from time-to-time, is licensed to provide.

Modifications have been made that are similar in nature and in principle to those given above concerning 1800 MHz

 

(4) In determining the fees on a differential basis for each respective operator contemplated in subsections (1)(b)(i) and (2)(c)(i), the Minister shall take into account—

Suggested modifications, similar to those made above regarding to 1800 MHz, to the reference of fee determination to emphasise the fact that fees may differ depending on market position and frequency requirements of respective operator.

36A

pg 11

para 12

(1)(h)(viii) telecommunication facilities to provide fixed-mobile services as a means of local access in the 1800MHz frequency band; and ….

The term "fixed-mobile services" has amended as explained above, as this is open to misinterprepation.

 

(1)(i) any other service reasonably complementary to the provision of those services (whether provided on a fixed or fixed-mobile basis, or a combination thereof) such as the provision, repair and maintenance of equipment located on a customer’s premises and any other telecommunications apparatus of any kind.

 

 

(2) Nothing in this section shall exempt the holder of a public switched telecommunication service licence from any requirement to holding a licence under section 30 or 37.

Reference to Section 37 has been removed because it refers to mobile cellular licences. Under current law and within the context of this Bill, holding both fixed and mobile cellular licences is not permitted according to the Government Gazette, no. 300, 5 March 1999, Limitations on Ownership and Control in Respect of Mobile Cellular Telecommunications Services, Regulations of Section 52 of the Act, Subsection 2

36B

pg 12

para 11

36B. (1)(a)

Cell C believes that the term "local access" requires defining and offered a suggestion above under "definitions’

 

36B(2) The systems contemplated in subsection (1) shall not include telecommunication equipment located on the premises of a customer, unless it is meant for public pay-telephones or mobile telecommunications on the premises of a customer or cordless telephones.’’.

It is unclear why the term "mobile telecommunications" has been included here.

A suggested modification has been included herein, which may better reflect the intention, although this needs to be clarified by the Bill’s drafters, as the intention is not clear.

37

pg 12

para 12

(1) Section 37 of the principal Act is hereby amended—

  1. by the deletion of the proviso to subsection (1);
  2. by the substitution for subsection (2) of the following subsection:
  3. ‘‘(2) Cell-C Pty Ltd, a company incorporated in terms of the Companies Act, 1973 (Act No. 61 of 1973), shall be the holder of a licence in terms of this Act to provide a mobile telecommunication service in accordance with the terms and conditions as specified in its licence issued to it by the Authority on 22 June 2001.’’; and

  4. by the deletion of subsection (3).

 

 

 

 

 

 

The proposed deletion of subsection (3) is cause for serious concern, as such removal would result in mobile cellular operators being required to hold licenses to provide services such as GSM pay phone services, in addition to value added network services which are clearly included in the current service licences. Cell C is concerned this will adversely affect their rights and obligations, including their community service telephone licence provisions. Subsection 3 should be reinstated.

(contin-)

(d) A licence contemplated in paragraph (a) shall contain a condition prohibiting the mobile cellular telecommunication service in question, until a date to be fixed by the Minister by notice in the Gazette, from utilising any fixed lines which may be required for the provision of the service other than fixed lines made available by Telkom or any other person providing a public switched telecommunication service, except for fixed lines for the exclusive provision of Community Service Telephones.

Permitting mobile operators to use their own fixed lines within the immediate area of the Community Service Telephones (CST) will prove the technical provision of CSTs and make more efficient in some cases than using GSM, since GSM is designed for mobility and not for very high-traffic carriage for fixed communications.

(contin-)

"(3)(a)From 22 June 2001 until 22 June 2003, CellC, Vodacom and MTN shall be the only holders of mobile cellular licences.

(b) Subject to a feasibility study, a fourth mobile cellular licence may be issued from 23 June 2003.

 

Cell C requests these lines be inserted into the Bill. Cell C, in keeping with the policy at the time of bidding for the 3rd mobile cellular licence and in keeping with the standard set by this Bill in relation to further PSTS licensing under Section 32A, believes a similar standard of exclusivity – period should be explicitly stated.

Furthermore, the process to be followed in the issuance of the fourth licence should be in accordance with the due process set out in the Act, which is not limited to a feasibility only.

40

pg 13

para 15

Section 40 of the principal Act is hereby amended—

(a) by the substitution for subsection (2) of the following subsection:

‘‘(2) Without prejudice to any rights of mobile cellular operators prior to the commencement of this section, a licence to provide any [value-added network] electronic transaction service, including, but not limited to, electronic data interchange, [E-mail] electronic mail, protocol conversion, access to a database or a managed data network service, shall contain a condition that the service in question [shall] be provided by means of telecommunication facilities—

 

This section has proposed changes in order to avoid misinterpretations that the existing rights of mobile operators to transmit data is not resolved and that the future development of the mobile cellular market is inadvertently obstructed.

(contin-)

(a) provided by Telkom licensed operators or made available to Telkom licensed operators as contemplated in section 44 [until a date to be fixed by the Minister by notice in the Gazette, and a different date may be so fixed in respect of national long-distance facilities]; or (b) after 7 May 2002 the passing of this paragraph, provided by Telkom and the second national operator or any of them.’’; and

(b) by the addition to subsection (3) of the following paragraph, the existing subsection becoming paragraph (a): ‘‘(b) Without prejudice to any rights of Telkom under its public switched telecommunication service licence which exist at the commencement of the Telecommunications Amendment Act, 2001, the second national operator and the other telecommunications facilities licensees contemplated in section 40A may provide voice over internet protocol after 7 May 2002.’’.

As above

89

pg 20

para 30

Section 89 of the principal Act is hereby amended—

(a) by the substitution for subsection (1) of the following subsection:

‘‘(1) The Authority shall prescribe—

(a) a numbering plan for use in respect of telecommunication services;

and

(b) measures to ensure that number portability shall be introduced through a phased-in process as of January 1, 2002 and be fully implemented by 2005, including— (…)

Number portability does not need to be delayed until 2005, and Cell C proposes a phased-in approach and full implementation could be in place before 2005. Cell C believes this approach would benefit both operators and government authorities by 1) measuring consumer acceptance and 2) making the investments and technical adjustments over a period of time.