DRAFT
Independent Communications Authority Of South Africa
Telecommunications Amendment Bill Submission
1. EXECUTIVE SUMMARY
*2. Introduction
*3. Roles and Responsibilities
*3.1. Appointment of Councillors
*3.2. Removal of Councillors
*3.3. Telecommunications Mediation and Arbitration Committee
*3.4. Regulation making powers, licensing powers etc
*4. Consumer Interests, Carrier Pre-selection and Number Portability
*4.1. Consumer Protection Regulations And Consumer Education
*4.2. Carrier Selection and Carrier Pre-selection
*4.3. Implementation Date
*4.4. Number Portability
*4.5. Mobile Portability
*4.6. Limited Fixed Line Portability
*5. Interconnection
*6. Granting of licences
*7. Licensing Process
*7.1. Section 34(2)(c) Invitation to Apply
*7.2. Section 34(3)(a), 34(3)(c) Public Hearings
*7.3. Section 34(3)(A), (3)(B), (3)(C): Additional information
*8. Alternative Licensing Methods (s35A, s10 of the Bill)
*9. Proposed amendment to section 37 of the Act (s12 of the Bill)
*10. SMMEs and section 40A
*11. General licensing powers (s30A, 30B) and the SNO (s34, 35, 35A)
*12. VANS/VPNS/PTNS
*12.1. Definitions of Value-Added Network Services (VANS) and Private Telecommunication Network (PTN)
*12.2. Value-added network service
*12.3. Private telecommunication network
*12.4. Virtual private networks (VPNs)
*13. Definition of `Multi-Media Service’ and the Granting of an Exclusive `Multi-Media Service Licence’ to Sentech
*13.1. Problems with the definition of `multi-media service’
*13.2. Can a licence for a broadcasting service be granted in this way?
*13.3. The `exclusivity question’
*13.4. Can a Multi-Media Service be a Telecommunications Service?
*14. Fixed-mobile service
*15. Amendment Section 36A
*16. Proposed amendment to section 29
*17. Funding and annual reports
*18. Communications Law
*19. Annexure 1
*As previously stated, ICASA welcomes the Government's policy of managed liberalisation for the telecommunications sector and the introduction of, amongst other things, a Second National Operator (SNO).
The Telecommunications Amendment Bill is the last step in defining the parameters of that policy. It is a particularly crucial step, as it is the strength of the final legislation which will determine whether or not the policy can be implemented.
It is in this context that ICASA makes its submission on the Bill. We want to ensure that the goals of government are reached.
Firstly, we have made submissions in order to ensure that the final legislation is litigation-proof. Parliament is well aware that legislation can inadvertently defeat the intentions of any policy. Even a misplaced comma can result in a court declaring a clause "void for vagueness". It is crucial that the law is clear and explicit, otherwise it will be left to the judges to determine what the intentions of the legislature. It is also critical that the final legislation is consistent with other laws and the constitution.
Secondly, we have made submissions in order to ensure that the regulator and other agencies are able to act flexibly and efficiently in order to meet the challenges of opening up the industry. As Cabinet has stated, we need a strong regulator able to act decisively and swiftly, in order to strengthen our economy, encourage investment and transform our society. It is crucial in this regard that the relationships and roles of Parliament, the Executive and the regulator are clear. We have outlined areas which we believe undermine this
Finally, we have made these submissions in the context of our mandate to regulate both broadcasting and telecommunications in the public interest. We have to make sure that the legislation will support us in fulfilling objectives such as universal access to affordable services, development of the industry, fair competition in order to reinforce consumer rights, investment in South Africa and empowerment of historically disadvantaged people and groups, including women.
Several of the suggested amendments to both the Telecommunications Act and the ICASA Act change the current relationship between and roles of the Minister, ICASA and Parliament. These provisions strengthen the Minister's role and appear in some instances to limit the regulator's power to that of an advisory body to the Minister. These provisions also reduce Parliament's role and thus potentially infringe on the need to ensure ICASA is accountable through the legislature.
ICASA is of the view that the policy of managed liberalisation requires that the regulator's autonomy should be strengthened rather than limited in order to ensure the success of Telkom's IPO and investment interest in the SNO.
The Authority is not clear on the motivation behind such amendments, and perhaps could comment more fully if we were aware of the perceived faults with the current system. The independence of the regulator from commercial, government and party political interference was asserted by Parliament just over a year ago when the ICASA Act was adopted. Some of these new provisions could be seen to interfere with this independence - and lead to the Act and/or the Authority's decisions being challenged in the constitutional court.
We have previously raised the need for a debate to define this independence and the different roles and responsibilities of all of us. We have also indicated that certain provisions of the Telecommunications Act, which require that ICASA recommends decisions/regulations to the Minister, are inconsistent with the provisions of the broadcasting legislation and could be seen to be contrary to the independence clauses in the Act. Such a debate/discussion though cannot, we believe, be conducted piece meal. It should rather be part of the broader process (already supported by Parliament, the Ministry and the DOC) of integrating the different pieces of legislation governing ICASA into one convergence/communication law. This would ensure consistency among the four different Acts. We have expanded on the need for this integration later in our submission.
In this light, the Authority submits that the following proposed provisions should preferably be rejected by Parliament, or put on hold until the discussions on an integrated Communications Act.
The schedule to the Bill seeks to change the manner of appointment and removal of Councillors.
As stated above the Authority is not sure of the motivation for the proposed amendment, or what difficulties there are, if any, with the current appointment procedure. We would like to emphasise that we believe the current process of recommendation of Councillors by publicly elected representatives is one of the key strengths of the South African regulatory system, ensuring transparency, independence and accountability of the regulator.
We further believe that the proposed amendment could be seen to interfere with the independence of the Authority, and thus affect the constitutionality of the amendments. The selection panel would be chosen by the Minister and there could be perceptions of interference in the appointment process. Further, we note that members of the panel are not subject to any disqualification, and thus stakeholders could, for example, sit on the panel and influence who was appointed.
The Schedule also proposes removing Parliament from playing a key role in the removal of councillors, and broadens the circumstances under which councillors can be removed.
Again we are unclear of the motivation behind limiting Parliament's role and giving the Minister this responsibility. This could though be seen to undermine the independence of the regulator, as, for example, a Minister could potentially remove, or be perceived to have removed, a councillor from office for asserting their autonomy in terms of decision-making.
Whilst it is obvious that any removal from office would have to comply with labour legislation, the addition of the clause stating that a councillor could be removed "for any good reason", could increase the above-mentioned perception.
It is our recommendation that the proposed amendments to sections 5 and 8 of the ICASA Act, contained in the schedule to the Telecommunications Amendment Bill, be deleted.
The Bill seeks to establish a Mediation and Arbitration Committee by inserting section 53A in the Act. This Committee may be set up by the Minister at the request of the Authority and any other party to an "unresolved dispute".
Again we would need clarity on why such a Committee is proposed, as the motivation is unclear to us, and we are unsure what current defects it is aimed at correcting. Is it for example aimed at amending the current powers of the Authority to adjudicate disputes between members of the industry? Or is it rather aimed at providing a more efficient procedure for the review of decisions of the Authority?
If it is the former, it is important firstly to note that the Authority makes decisions on issues and does not get involved in "disputes" with stakeholders. Secondly the adjudication of complaints and disputes is an important component in ensuring compliance by licensees with policies and licence conditions and determining fair competition between operators. Should ICASA agree to be bound by a decision of any Arbitrator then it would effectively be ceding this power.
ICASA has put in place measures to ensure the speedy resolution of disputes. We have used our powers to establish special committees to resolve disputes between parties in order to expedite the backlog that the Authority inherited. This has been done in such a way as to ensure proper procedures are followed, and that the rulings are thus litigation proof. We therefore have developed processes and procedures to eradicate problems faced by our predecessor and do not believe it is necessary to amend the Act to facilitate this.
Alternatively if the intention is to develop an efficient mechanism for the review of the Authority's decisions, then we recommend that Parliament do so utilising the same principles as those for the Competition Tribunal/Competition Appeal Court. We would welcome such measures, but the proposed amendment in no way achieves this.
ICASA proposes that Section 53A be deleted. If necessary Parliament should replace the proposed clauses with clauses similar to those establishing the Competition Tribunal or Competition Appeal Court.
Earlier the Authority urged Parliament not to amend sections dealing with the roles of the Legislature, Executive and regulator in a piecemeal fashion, but instead to ensure a public debate on such issues during the process of finalising a convergence/communication Bill.
This is to ensure both consistency between the different approaches in the telecommunications and broadcasting legislation, and to finally clarify the different roles and the nature of the independence of the Authority.
In this regard we would like to highlight current clauses of the Telecommunications Act, which are inconsistent with the procedures and decision-making powers of the IBA and Broadcasting Acts. Clauses such as those limiting the powers of the Authority in relation to regulation-making and the granting of licences are perceived to curtail the autonomy of the regulator and thus inconsistent with the independence of the Authority as defined in the ICASA Act.
The framework for making regulations in the Telecommunications Act (the "Act") is such that the Authority ‘makes’ regulations in a public and transparent process, and then submits these to the Minister for approval. In terms of broadcasting legislation however, ICASA finally determines regulations.
Again, while under the broadcasting acts, the Authority grants licences, the regulator merely recommends to the Minister which applicants should be granted telecommunications licences.
Apart from the potential inefficiencies in the telecommunications framework, which limits the ability of the regulator to act swiftly to changing market conditions, it should be noted that licensing and regulation making are core functions of the Authority.
Such clauses need to be debated and decided on by Parliament during a holistic discussion on the roles and responsibilities of the regulator.
Firstly the Authority would like to welcome the inclusion of clauses reinforcing fair competition and consumer rights. This will reinforce our ability to regulate the industry in the public interest.
With regards to fair competition, the proposed amendments strengthen ICASA's right to ensure fair competition when drafting regulations by the inclusion in Section 96 of a reference to section 2(j) of the Act.
The Authority also is in support of the provisions that strengthen gender equality. However we would like to note that the proposed amendments could inadvertently result in further marginalising women, through excluding them from the definition of "historically disadvantaged groups". Any references to historically disadvantaged and women should therefore be amended.
In analysing the proposed amendments related to numbering, the Authority begins with the premise that South Africa’s policy on numbering must promote effective competition, maximise consumer choice and reduce prices. To this end, users must be able to choose easily between the services of competing carriers. In practice customers will access these competing carriers through the implementation of carrier selection mechanisms and through number portability.
Ad Section 53
The Authority notes that the Bill contains several provisions aimed at increasing consumer awareness and choice. ICASA welcomes any amendment that facilitates the making of regulations to achieve the objects laid out in Sections 2(f) and 2(m) of the Act in relation to the protection of consumer interests. The Authority is well aware of the need for increased focus and participation in consumer education and outreach programmes. Such programmes will be needed to inform the public about their rights and choices with regard to newly introduced services such as carrier selection and pre-selection, number portability, billing, etc. In addition, as is contemplated in the amendment to s53, the public’s rights in a competitive telecommunications sector should be addressed.
The Authority is of the view that consumer protection and education must be done on all levels, and it is not clear why regulations on consumer protection are being addressed in terms of section 53, which deals solely with uncompetitive actions. The Authority proposes that the proposed text be moved and inserted in Chapter XI under the General provisions, perhaps as a section 93A. As such, the Authority would be in a position to make regulations to ensure protection of all consumer interests as they relate to various matters. This is especially critical during the managed liberalisation process when consumers will need to be educated about new choices and technologies. While the Authority acknowledges the importance of consumer issues, we would like to note that an increased focus on consumer issues in a post-exclusivity environment will necessitate the strengthening of the Authority’s regional offices and will have budgetary implications.
ICASA welcomed initial proposals by government in previous versions of the policy directions, which introduced carrier pre-selection in 2002/2003. The final policy directions leave consumers with two choices for both international and long-distance (Telkom and SNO) services. Sentech is retained as an international choice for the SNO and Telkom, but cannot provide services to end-users directly. At the same time carrier pre-selection is now only required to be implemented in 2005, thus reducing choice and competition in prices.
This means that until carrier pre-selection is implemented in 2005, consumers will be routed to international and long-distance carriers by their local exchange network (Telkom, SNO or SMME). In effect, only the SMMEs will choose to route traffic over other networks since Telkom and the SNO will have international and long-distance as part of their PSTS.
Sentech, the international carrier, will also be prejudiced as in effect, only the SMME licensees will select Sentech for international calls if the prices are competitive.
For this reason it is imperative that carrier pre-selection (giving the choice to consumers to pre-choose their default carriers) should be moved forward to May 2003. In addition, in the interim (from 7 May 2002 until implementation of carrier pre-selection), it will be necessary to ensure carrier selection is required to allow consumers to override their local carriers’ choice on a call-by-call basis.
Carrier pre-selection allows customers to pre-choose their preferred carrier. Carrier selection on the other hand enables consumers to override their default provider by dialing an override code. In order to ensure fair competition for the SNO it will be important to ensure that carrier selection is available from its date of licence. Once carrier pre-selection is implemented, carrier selection will continue to enable customers to override their default choice of service provider.
Carrier selection is defined by the European Commission as the situation where customers connected to one exchange network (usually the incumbent local operator’s) are offered a simple, non-discriminatory mechanism which enables them to select alternative carriers of their choice for long-distance or international traffic on a call-by-call basis.
Carrier pre-selection, on the other hand, is defined as a mechanism, which allows users to pre-select the long-distance or international traffic carrier of their choice on a permanent or default basis. They can override their pre-selected carrier by dialing a short access prefix or override code.
In this regard ICASA proposes that the Bill defines and makes a distinction between carrier selection and carrier pre-selection to reinforce fair competition and consumer choice, as follows:
"Carrier pre-selection" means any facility by which subscribers to a telecommunications service can pre-select their carrier beforehand, and can thus automatically access the services of the pre-selected interconnected national long-distance telecommunications service and international telecommunications operator.
"Carrier [pre-selection] selection" means any facility by which subscribers to a telecommunications service can access the services of interconnected national long-distance telecommunications service and international telecommunications operator on a call by call basis.
The Authority is further of the view that in order to reap the full benefits carrier selection and carrier pre-selection will bring to consumers and the economy, it is critical that the dates for implementation be moved forward. Carrier selection should be phased in from May 2002 with carrier pre-selection being introduced by May 2003.
This will ensure consumers will have a real choice of service. Furthermore, it will ensure that customers of under-serviced area licensees will have a choice of long distance and international carriers. If carrier pre-selection is only introduced in 2005, SMMEs will be forced to enter into agreements with either the SNO or Telkom to provide long distance and international service to their customers. This will have the effect of limiting consumer choice for customers in under-serviced areas, and curbing competition.
The Authority proposes the following amendment to effect these recommendations:
Ad section 89A
The Authority shall prescribe regulations –
establishing a framework for [facilities in terms of which subscribers to a telecommunication service can access the services of an interconnected long-distance telecommunication service and an international telecommunication operator] carrier selection and carrier pre-selection
requiring all holders of public switched telecommunication services licences to introduce carrier selection from May 2002 and carrier pre-selection from May 2003 [ phase in the facilities referred to in paragraph (a) from May 2005].
The Authority is in full support of the decision to legislate number portability and is of the view that the provision of number portability will lower barriers to entry and promote competition in the PSTN and mobile marketplace by enabling customers to switch to a new service provider without having to change their telephone numbers. Number portability will thus permit consumers to choose a fixed or mobile phone company based on service, quality, and price, rather than on a desire to retain a particular telephone number. The Authority sees as a first priority the introduction of mobile portability and certain fixed line services by 2003, as outlined below.
As of March 2001, the total number of active mobile subscribers was 8,883.136. Currently in the mobile sector, service portability is available to consumers who wish to change services within the same provider. However, this does little to promote competition. The mobile operators use both a home location register and a visitor’s location register -- and these are the pillars of efficient porting of numbers. Thus the operators would be able to effect system upgrades in order to implement number portability.
The Authority thus takes the view that mobile portability should be effected from May 2003 to encourage competition in the mobile market and to create equal conditions for access and opportunity for new entrants.
The Authority also considers portability of tollfree (0800/0860) numbers and corporate numbers as urgent and critical.
As such, the Authority proposes that the introduction of fixed line portability should be staggered with these services being provided from May 2003, and porting of residential fixed line numbers from 2005, as proposed.
This approach will encourage competition in the fixed market, in particular in the business or corporate sector, and will create equal conditions for access for the SNO. By May 2003, the Authority would have had ample time to prepare for the introduction of such services.
The following amendments to the Bill are thus proposed:
Section 89 (1)(b) – measures to ensure that number portability shall be introduced in [2005] 2003, including"
Section 89A (b) should read "requiring all holders of public switched telecommunication services licences and mobile cellular telecommunications service licences to phase in the facilities referred to in paragraph (a) from [2005] 2003.
The Bill amends the yardsticks the Authority must use to determine whether or not a request for interconnection is reasonable by amending Section 43.
The Authority would like to highlight difficulties caused by the vagueness of one of these clauses, which states that such a request "can be implemented on a reciprocal basis". It is not clear what will constitute a reciprocal relationship. This opens any determination by the Authority to legal challenge on the interpretation of this clause.
Secondly, we would like to note that the Bill proposes to substitute a clause stating that such a request is reasonable if it promotes "increased public use of telecommunications services or more efficient use of telecommunications facilities". It is suggested that this clause be replaced with one stipulating that such a request should "promote the efficient use of the public switched telecommunications network".
We would appreciate clarity on the need for this amendment.
Finally the Bill proposes in terms of section 43(c) that, if the parties fail to agree on the terms and conditions of an Interconnection Agreement, the Minister shall declare that the terms and conditions proposed by the Authority apply between the parties.
This clause appears to be superfluous and there seems to be no reason why the Authority itself should not make the final determination on such terms and conditions. The involvement of the Minister in such functions would lead to confusion with regards to the regulatory framework and uncertainty about the powers of the regulator.
The Authority recommends that the amendment to Section 43 be deleted. If there are any shortcomings in the current process this can be addressed in a way that strengthens the regulator and thereby improves investor confidence.
The current legislation makes provision for an intended recommendation to be furnished to the applicants by the Authority informing them of its preferred bidder in a licensing process. This is followed by representations by the applicants on the Authority’s intended recommendation. Thereafter the Authority makes a final recommendation to the Minister.
Notwithstanding the comments made previously on the need for Parliament to debate giving the Authority the power to grant licences, and the fact that this raises fundamental questions about administrative law principles, the Authority has noted the difficulties regarding the requirement to publish an intended recommendation for comment. This provision has, in the past, led to a number of inefficiencies and has expanded the number of legal grounds on which applicants can challenge the regulator or the Minister. It is also an accepted principle of administrative law that the body hearing the matter should also decide the matter.
During the recent litigation involving the third cellular licence process, for example, applicants were able to interdict the Minister from making a decision on the basis of the intended recommendation.
The retention of the intended recommendation process and the "split" licensing powers between the regulator and the Minister does not result in greater clarity for potential investors or greater efficiency in the regulatory framework and is susceptible to legal challenge and manipulation.
As stated previously, it is the Authority’s view that the power to grant and issue licences should be allocated to the regulator, however we recognise that this should perhaps be debated during the finalisation of an integrated communications Bill.
However we do propose that Parliament change the proposed amendment to remove the need for the Authority to make and publish its intended recommendation for comment.
35. (1) The Authority shall, after having duly considered any application for a licence made in terms of this Act, [and] any representations and responses thereto and further information and evidence tendered, in terms of section 34(3)A, other than in respect of an application which is deemed to have been made pursuant to section 30(3)(a), 36(1)(a) or 40(1)(a) –
[(i) notify the applicant of its intended decision or recommendation, including conditions contemplated in subsections (2)(b) and (4);]
[[ii) on request made by the applicant within the prescribed period, furnish him or her with its reasons for such decision or recommendation]
[(b)The applicant may within the prescribed period make representations to the Authority in relation to the intended decision or recommendation, and the Authority may adjust or alter such recommendation in any manner in the light of such representations]
[(2)The Authority shall, after the provisions of subsection 1 have been complied with]
refuse the application; or
(b) in the case of –
(i) an application for a licence to provide a telecommunication service referred to in section 34(2), recommend that the Minister grant the application conditionally and suggest conditions contemplated in subsection (4) for the Minister to impose; or
(ii) any other application, grant the application.
This proposed amendment to section 34 the Act inserts a new s34 (2)(c), which provides that the Minister must, prior to issuing an invitation to apply, consult the Authority to determine the evaluation criteria and weighting factors to be used by the Authority.
The Authority welcomes the requirement that the Minister consult with the Authority before issuing the ITA, and believes this principle should be retained in any amendments.
However, the current proposed clause is vague and it is not clear for example who should determine the evaluation criteria and the weighting thereof. Whilst the Authority endorses the need to advise potential applicants of the evaluation criteria in an invitation to apply, the proposed amendment lends itself to the suggestion that the Minister, rather than the Authority, will determine the criteria and weighting, in consultation with the Authority.
This could weaken the regulator in the eyes of the investor community.
We recommend that this proposed amendment should be redrafted by Parliament to reinforce the requirement that the Minister consult with the Authority on an ITA. Other requirements should be rejected/deleted.
.
The proposed amendment in the Bill removes the of holding public hearings in the licensing process. This could be a violation of the Promotion of Administrative Justice Act and/or the constitutional right to fair administrative process and suggests a reduction in the transparency of the process.
However this can be addressed by allowing the Authority to retain discretion to hold public hearings. Such an amendment would bring the Telecommunications Act in line with the Independent Broadcasting Authority Act, which grants the Authority such discretion.
The Authority recommends that Section 34 (3) (c) be retained and amended to give the Authority the discretion to hold hearings.
The current clauses of the Act relating to additional information have resulted in a lack of clarity, in previous licensing processes, around what information can be accepted and which information amends the original application.
This has resulted in vagueness about what information the Authority may or may not consider as part of the application, and has potentially opened the Authority's decision-making processes to litigation.
In an attempt to clarify this, the Authority proposes an amendment to s34 (3A), which provides that additional information (after the deadline for submission of applications) can only be considered if the Authority has explicitly requested such information from the applicant to clarify the application. Applicants may not, of their own volition present the Authority with additional or supplementary information.
In line with the above, and with broadcasting legislation, it is proposed that section 34(3A) and 34(3B) be amended as follows:
34. (3A) The Authority may require an applicant or an interested party who has lodged representations in relation to an application in terms of subsection (3) to furnish the Authority, within the period specified by it, with such further information as may be reasonably necessary in order for the Authority to properly consider the application; provided that the Authority shall have the discretion to disregard such further information if it is extraneous to the Authority’s request in this regard.
34 (3B) Save for representations and responses made under paragraph (b) of subsection (3) and such further information as the applicant is required to furnish in terms of subsections (3)(A) within the period specified under that subsection, no applications may be amended or varied and no supplementary or additional documents may be lodged with the Authority after the closing date for such applications as specified by the invitation made in terms of subsection (2)(b)(iii).
In addition ICASA recommends the Insertion of the following section 34(3C) allowing the Authority to prescribe regulations outlining the procedure for submitting additional or supplementary information:
33. (3)(C) Notwithstanding the provisions of subsection 33 (3)(B) the Authority may prescribe regulations on the submission of supplementary or additional information.
The proposed s35A in the Bill provides that the Minister may, in specific instances, determine the manner in which applications may be made and the licensing conditions that may apply in respect of licenses contemplated in s34 (2). It is important to note in this regard that the categories of licences in section 34(2) of the Act are not a closed group and thus the proposed amendment permits the Minister to potentially prescribe licensing conditions for all licenses.
Whilst the purpose of this insertion is unclear, the Authority presumes it is to enable the Minister to determine that certain licences shall be determined by, for example, an auction.
However, the effect of the wording of section 35A is such that it allows the Minister at any time and without regard to the provisions of the Act, to determine licensing methods and conditions for licenses under s34 (2). This removes one of the core functions of the regulator, namely that of proposing or determining licence conditions.
The Authority recommends that this proposed amendment be deleted. If this section was meant to expressly provide for a process of licensing through auctioning then we are willing to submit a draft clause in respect thereof.
The proposed amendment, perhaps inadvertently, does away with the requirement for the Authority to re-issue the licenses of Vodacom and MTN under the Telecommunications Act.
The operators have already submitted applications under s37 and this Authority has already drafted licenses and submitted these to Vodacom, MTN and Telkom for comment. To simply amend legislation would nullify these processes and may affect operator’s rights under such provisions. In addition it could send out the wrong kind of message to investors, namely that legislation can be amended in an unconsidered manner.
Furthermore the proposed amendment regarding Cell C's licence suggests that the Bill is granting a licence to Cell C, albeit retrospectively. Cell C has already been granted a licence under a process conducted in terms of the Telecommunications Act. This is an unnecessary amendment.
The Authority recommends that the proposed amendments to this section be rejected.
The Authority welcomes the introduction of a new category of licensees for under-serviced areas. This will facilitate universal access, empower previously disadvantaged groups and promote economic growth in under-serviced areas.
Our comments on the proposed amendments are aimed at strengthening these goals.
Firstly, the Authority would like to propose that the Act stipulates that such licenses should be granted to entities which have women, in particular black women, as the majority shareholders.
Secondly we would like to highlight a discrepancy between this section and other sections of the Bill.There
It is the Authority’s understanding that under-serviced area licensees will be holders of PSTS licences. However, section 32A(1)(a) prohibits them from holding such licenses as it specifies that Telkom and the SNO shall be the only holders of PSTS licences from 7 May 2002.
The following amendment is proposed –
Section 32A(1)(a):
From 7 May 2002 until 7 May 2005 Telkom, the second national operator and the under-serviced areas licensees shall be the only holders of public switched telecommunications service licenses.
Finally there is a contradiction in the proposed clauses as they stipulate on the one hand (in section 40A(2)) that the Authority may grant such licences, but in a later section (40A(4)) provide that these will be granted by the Minister.
ICASA proposes that the clauses relating to the licensing of SMMEs in under serviced areas be clarified to reinforce the Authority's responsibility to grant such licences.
As a general principle, Parliament makes laws of general application and empowers an agency to determine details under the guidelines of a particular legislation.
In the existing Telecommunications Act, Parliament has empowered the regulator to issue licences without identifying the individuals to whom such licenses are to be granted. However, in the Bill, Parliament is asked to grant rights to spectrum to named entities.
For example, the Bill now proposes that Parliament allocate the radio spectrum, instead of instructing the regulator on the norms it should consider in this allocation. This removes this power from the Regulator and could be interpreted as undermining ICASA.
In ICASA’s view the legislature should rather set guidelines on how ICASA should allocate the 1800MHz spectrum, rather than determine who should be awarded this spectrum.
The Authority has recently finalised a public consultation process on a regulatory framework for value-added network services (VANS) and private telecommunication networks (PTNs).
In May this year, as a result of this process, the Authority recommended to the Minister and the Portfolio Committee on Communications definitions of VANS and PTN to be included in the Telecommunications Amendment Bill.
"Value-added network service" means a telecommunications service(s) provided by a person over a telecommunications facility, which facility has been obtained by that person in accordance with the provision of section 40(2) of the Act, to one or more customers of that person concurrently, during which value is added for the benefit of customer(s). Such added value can consist of:
Without derogating from the generality of this definition, value-added network services include, but are not limited to:
"Private telecommunication network" means a telecommunication system provided by a person for purposes principally or integrally related to the operations of that person and which is installed on two or more separate, non-contiguous premises and the switching systems (nodes) of at least two of these premises are interconnected to the public switched telecommunication network.
The Authority conducted a similar consultative process with stakeholders on whether a Virtual Private Network (VPN) constitutes a Managed Data Network Service (MDNS) or not.
Arguments were presented by various stakeholders, both in written submissions and during the hearing, in an attempt to demonstrate that a VPN is on the one hand a PTN and on the other hand a Value Added Network Service (VANS), specifically a MDNS.
After the consultative process, the Authority found that within the present legal context, the so-called "VPN" is neither a MDNS or a PTN but is manifested as desirable service characteristics resulting from software based technological intervention in the management, configuration and operation of a VANS, which is a legal service in terms of section 40 of the Act, particularly section 40(4)(b).
The Authority recommended to the Minister and the Portfolio Committee on Communications that the following definition be included in the amendments to the Telecommunications Act:
"Virtual private network" means the use of a software-based technological intervention in respect of:
for the provision of value-added network services and private telecommunication networks.
In conjunction with the VPN definition, the Authority recommends that Sections 40 and 41 be amended as follows:
S40 (2) A licence to provide any value-added network service, including but not limited to electronic data interchange, E-mail, protocol conversion, access to a data base or a managed data network service or a virtual private network, shall contain...
s41(1)(b) A licence shall, subject to the regulations, be required for the provision of a private telecommunication network (including a virtual private network) where such network...
ICASA notes however that these proposals regarding the definitions of VANS, PTN and VPN have, thus far, been ignored.
The Authority recommends that the above proposed definitions of VANS, PTN and VPN be included in the Telecommunications Amendment Bill.
The Bill proposes that Sentech be granted a mult-media service which is defined as a digital broadcasting service.
The definition of `multi-media service’ as well as the granting of what amounts to an exclusive `multi-media service licence’ to Sentech is vague, unworkable and will confuse the existing regulatory frameworks for broadcasting and telecommunications. A broadcasting licence cannot be granted by amending the Telecommunications Act.
Furthermore, the proposed legislative scheme to grant Sentech an exclusive multi-media service licence contravenes the provisions of the Independent Broadcasting Act, 1993 and the Broadcasting Act, 1999 and is clearly unconstitutional.
The first part of the definition defines a "multi-media service" as a "digital broadcasting service" (our emphasis).
A broadcasting service, as defined in section 1(1)(ix) of the Broadcasting Act, specifically excludes:
The second part of the multi-media service definition provides that it is:
"a "digital broadcasting service that combines various forms of media to communicate information or content in an interactive format, including such services as
but shall not include mobile cellular telecommunication services and public switched telecommunication services".
Clearly, paragraphs (a), (c) and (d) would involve some form of dial-up service and therefore cannot be regarded as a broadcasting service.
Paragraphs (e), (f) and (g) would be excluded from a broadcasting service because they involve `a service (including text service) that provides no more than data, or no more than text (with our without associated still images)’;
Paragraphs (h), (i) and (j) are so broad and unspecific that they may not give any effective legal meaning to the definition, and confuse the distinctions between broadcasting and telecommunications and content and carriage.
A broadcasting service requires a broadcasting licence and only the Authority is empowered to consider applications for such licences and grant or reject such applications. This is clearly spelt out in section 39 of the IBA Act and section 4 of the Broadcasting Act. In addition, the Authority’s role as the independent regulator for broadcasting services is protected and set out in section 192 of the Constitution of the Republic of South Africa Act, 1996.
However, section 32C(1)(b) of the Bill proposes that Sentech must, by 7 May 2002, be granted a licence to provide `a multi-media service’. The proposed conditions of the licence must be published by the Authority on or before 31 December 2001 (together with the international gateway service licence).
The Authority has no discretion in this regard and the Bill appears to specify that such a multi-media service licence must only be granted to Sentech. This raises the potential for constitutional challenge.
Section 33(1)(a) is to be amended to refer to section 32C(1)(b) as a category of licence which may be granted.
But a multi-media service licence does not seem to be a generic licence that may be granted to others since it refers only and specifically to the section granting the licence to Sentech – that is section 32C(1)(b).
The only recent example of an exclusive licence is Telkom’s PSTN licence. In that case, Telkom’s exclusivity over fixed-line voice telephony was granted in the context of the managed liberalisation process and as a quid pro quo for Telkom’s rollout of phone lines to 2.7 million homes. In this case, however, there is no policy framework for multi-media services and no universal service and access obligations are being imposed on Sentech in lieu of the exclusivity which has de facto been granted.
Taking into account the amendment proposed, section 33(1)(a) will provide the following:
"The categories of licences which may be granted, and the telecommunication services authorised by such licences are as contemplated in section 32C(1)(b), 34(2)(a)(i) – (iv) and 39 to 41"
Although it is first defined as a `broadcasting service’, here the multi-media service licence is listed as a category of telecommunication service licence. This is a clear and serious contradiction and should alert the Portfolio Committee to inherent flaws in the definition and proposed amendments.
Should the multi-media service then be defined as a telecommunications service? The Authority would not support this approach for the following reasons.
Firstly, the original definition includes elements of broadcasting – such as pay-per-view. But secondly and more importantly, the granting of an exclusive broadcasting or telecommunications licence to Sentech for activities which are already being carried out or may be carried out in the future (in some form or another) by other parties will have the impact of prohibiting such activities. These parties include other satellite broadcasters and VANS licensees.
Since the proposed scheme may impact on vested rights and grants exclusivity with regard to a form of content provision, it raises concerns of its constitutionality.
Taking into account the flaws inherent in this proposed amendment, the Authority requests that Parliament reject the definition of multi-media service and the scheme to grant such a licence to Sentech by way of statute. It is our view that Sentech should be required to apply for a broadcasting licence or a telecommunications licence, as the case may be, in terms of existing legislation. The insertion of the multi-media concept into law should not precede policy on convergence and the rationalisation of our four underlying statutes. It should further be noted that the Minister has appointed an advisory committee on digital broadcasting. This clause could also be seen as pre-empting the recommendations from this committee.
The current definition for "fixed-mobile service" is generally acceptable, however the proviso which reads "provided that nothing in this definition shall exempt the provider of a fixed mobile service from holding a licence under section 30 or section 37" should be deleted. This section does not add to the definition, as the provisions regarding ownership are contained elsewhere in the Bill.
Further, in order to implement this service, the PSTN definition proposed under 36B of the Amendment Bill should be amended to reflect that the Local Access/Loop can be provided by either Fixed Local Loop (FLL) or Wireless Local Loop (WLL) technology. The way in which it is presently defined makes it appear as if it is a separate telecommunications service whereas it is a Local Access PSTS service clearly provided under a PSTS licence.
The PSTS definition proposed under 36A of the Amendment Bill does not need to reflect the additional fixed-mobile service as this is already captured under the local access telecommunication service they are allowed to provide. With the suggested clarification under the PSTN definition there will then be no need to define this as an additional telecommunication service.
Finally, the definition for fixed-mobile service should avoid conflating 3G and fixed-mobile. These are clearly two different issues. One requires a licence, the other is part of the PSTS, as reflected in the definition of PSTS.
As stated earlier, the Authority questions the legality of the approach of granting licences through legislation.
36A(1)(h)(vii). This clause should be deleted because it pre-empts the possible granting of third generation spectrum licences to the PSTS licensees.
36A(1)(h)(viii). The Authority proposes the deletion of this section as it limits the provision of fixed-mobile services to specific frequency spectrum Deletion of the reference in this clause to 1800MHz spectrum would facilitate the use of any assigned spectrum, including 1800MHz and 3G or another. Furthermore, it is international best practice for legislation to be technologically neutral, thus making provision for future applications and technologies which will not necessitate an amendment to the legislation.
Section 36A(1)(i). The Authority notes that the CPE market is liberalised, which includes provision of CPE by Telkom and the SNO, and to this extent this section is creating uncertainty as to this status of CPE. It should be deleted from the definition to avoid any misconstruction on CPE issues.
Section 36A(2) should be deleted because it doesn’t form part of the definition of a PSTS. As is the case with the definition for "fixed-mobile services" it is misplaced and confuses two distinctly separate issues namely that of mobile cellular telecommunication services and PSTS services. It is an unnecessary provision. Reference to VPN in the PSTS definition should also be removed for the reasons that are discussed elsewhere in this submission.
The Telecommunications Act requires the Authority to conduct public hearings concerning frequency band plans and reviews of these plans. In terms of the Amendment Bill this sub-section is completely removed.
The Authority’s view is that it is important that frequency bands be planned transparently. The Authority should therefore retain the discretion to hold hearings. This open and transparent process is in line with Administrative Law principles and it is the Authority’s view that no benefits can be gained by deleting the requirement for public hearings. Accordingly the Authority proposes that no amendment be made to this section, unless Parliament inserts the right of the Authority to use its discretion in this regard.
The proposed amendments contained in the schedule remove the clauses in the ICASA Act dealing with funding of the regulator and requiring the Authority to submit annual reports to Parliament.
Clauses relating to the funding of ICASA and the reporting by the regulator to Parliament should not be deleted. Instead a debate on financing of the Authority should be conducted during the process of developing a communications law.
As stated earlier, the Authority supports the Ministry, DOC and Parliament in its proposals to craft one communications law. Currently we are governed by four different statutes which sometimes contradict each other, and make it difficult for the regulator, the public and all stakeholders to easily understand the policies underpinning these laws.
While the ICASA Act of 2000 enabled the merger of the IBA and SATRA, the key provisions of our three underlying statutes remain in force, namely the IBA Act, 1993; the Telecommunications Act, 1996 and the Broadcasting Act, 1999.
There is a clear need for legislative reform. What we need is a consolidated Communications Act that sets out different chapters for broadcasting (content), telecommunications (carriage), convergence and other distinctive matters but also provides consistency on regulatory powers and functions.
By attempting to solve legislative problems on an ad-hoc basis, the legislature could be compounding our difficulties rather than solving them. After Parliament processes the Telecommunications Amendment Bill and the forthcoming Broadcasting Amendment Bill (which is vital to our functioning in a number of key respects), we submit that a commitment should be made to rationalising existing legislation. As we have suggested, we think that it is during this process that all stakeholders can also define the relationships between the Executive, Legislature and Regulator. In this way we can provide clarity on ICASA's independence and debate whether or not we need different roles when dealing with broadcasting and telecommunications.
Proposed Amendments to the Telecommunications Act
The Authority has prepared a number of amendments, which are technical and operational in nature and will facilitate the work of the regulator. The Authority has further proposed editorial amendments, which simply correct typographical errors in the legislation. These are amendments to the Telecommunications Act and are not dealt with in the Telecommunications Amendment Bill.
The Authority has experienced a problem with the fact that the definition of a "Radio Dealer " does not appear in either the definition list of the Act or the Regulations although Chapter 2 of the Act deals with radio dealers. The following amendment is proposed:
"radio dealer " means the holder of a radio dealer's registration certificate issued under section 56 of the Telecommunications Act, Act 103 of 1996
In order for the Authority to enforce Chapter 2 of the Radio Regulations a television set must be classified as radio apparatus. There is no consistency between the provisions of Chapter 2 which refer to television sets and the maintenance and retention of registers and records of radio apparatus (including television sets) and the definition of apparatus which excludes a television set. As such, the Authority proposes the following amendment to the definition of radio apparatus:
Means a telecommunication facility which is capable of transmitting or receiving any signal by radio [, other than –
Thus the definition would read:
"Radio apparatus" means a telecommunication facility which is capable of transmitting or receiving any signal by radio in the form of sound, including a television set as contemplated in the Broadcasting Act No. 4 of 1999.
The ICASA Act indicates that all members of Committees must be paid for their services. Often members would like to participate on a voluntary basis and do not require payment for membership of an ICASA committee. As such, the Authority is of the view that it should be able to use its discretion to determine whether or not a committee member should be paid. As such an amendment to section 17 (8) of the ICASA Act by the deletion of the words "must be paid" to "may be paid" is needed.
17(8) The members of any committee, including the Broadcasting Technical Committee and Broadcasting Monitoring and Complaints Committee referred to in section 21 of the IBA Act, who are not Councillors or members of the staff of the Authority [must] may be paid such remuneration and allowances as the Council determines.
The need has been identified to amend section 27 in order to enable the Authority, once it has conducted an enquiry, not just to make known its findings or recommendations, but also to make declaratory orders which will be informed by those findings. Presently, the Authority cannot respond quickly and decisively to issues affecting the industry, in particular on issues of new technologies.
The Authority is of the view that the same process that is currently followed for s27 enquires which results in findings and conclusions should be followed as it allows broad consultation on the various issues which arise. To this effect the intention is to amend section 27 (8) and include therein an additional section which will read as follows:
Section 27 (8)
(c): Make declaratory orders informed by the findings or recommendations made in terms of this subsection;
(d) determine the date upon which the declaratory orders referred to in this subsection shall become effective.
There is a need for clarity around section 33 and how the Authority treats new categories of licences. An amendment to section 33 should ensure that, in consultation with the Minister, the Authority may prescribe telecoms services that can be provided with or without a licence. Through the consultation process, the Authority and the Ministry can ensure that services for which the Minister intended to issue an ITA are not categorised wrongly and thus licensed improperly by the Authority.
Amend section 33 (2) to read as follows:
33(2) The Authority may prescribe [the] which telecommunications services and activities, other than those referred to in subsection (1) (a), [which] may be provided or conducted with or without a licence.
33(3) The Authority shall consult with the Minister before prescribing the services to be licensed in terms of subsection 2.
It is necessary to clarify s44(2) with respect to the unreasonableness of requests made to Telkom for the leasing and making available of telecommunications facilities. Presently, it is not clear that the Authority determines whether a request by an operator providing a telecoms service is reasonable. In fact, this is a point of contention in the SAVA/Telkom matter. As such, the following amendment is proposed:
S44(2) Telkom and any other provider of a public fixed telecommunication service shall, when requested by another person providing a telecommunication service, including a private telecommunication network, lease or otherwise make available telecommunication facilities to such other person pursuant to an agreement to be entered into between the parties, unless the Authority determines that such request is unreasonable.
The Authority has had difficulty enforcing this provision of the Act regarding the need for type approval. Some suppliers claim that they are under no obligation to have the equipment type approved prior to it being sold, provided that they do not use it themselves.
The idea is to require the supplier to have the equipment or facility type approved before it is offered for sale.
S54(1) No person shall use, supply, sell, or make available for sale any type of telecommunication equipment or facility, ….
The recently finalised S56 regulation is not satisfactory as no provision is made in the Act to exclude certain types of suppliers (e.g. retailers, small stores, someone selling on the street) from requiring registration as a telecom equipment supplier.
The idea is to exclude such categories of supplier from requiring registration as suppliers.
S56(4) The Authority may prescribe categories of suppliers of telecommunications facilities or equipment who do not require registration in terms of this section.
ICASA would like to propose the following additional amendments to s95 and s96 of the Telecommunications Act:
Delete section 95(3)
[95(3) No radio regulation or amendment or withdrawal thereof shall be valid until it has been approved and published in the gazette by the Minister]
Amend section 96(1) to read as follows:
96(1) The Authority may make regulations in relation to-
Delete section 96(6)
[96(6)The provisions of section 95(3) shall apply, with the necessary changes, in relation to a regulation made under this section or any amendment or withdrawal thereof.]
The wording of sub-section (c) is identical to that of s78(d) of the IBA Act and will provide some consistency in regulation-making powers of the Authority.
Currently the Authority has different regulation-making powers depending on whether it is dealing with the telecommunications or the broadcasting sector. The proposed amendment of s96(1) and the deletion of sections 95(3) and 96(6) of the Act will bring both sectors in line, and will give the Authority the power (in the regulation of the telecommunication sector) to make regulations on any matter that may not have been envisaged by the legislation, but will facilitate the work of the regulator and the development of the sector.
The Authority has experienced difficulty regarding the powers of inspectors, especially with regard to the seizure and sealing of telecommunications equipment and facilities.
The idea here is to extend the powers of inspectors by importing part of the provisions of section 31 to section 99 by including an additional section that will read as follows:
99 (1)(A) Where on inspection the inspector finds any radio
apparatus or telecommunication facility or equipment which is possessed
or sold in contravention of the provisions set out in this section the
inspector may:
Section 99 (1)(B): Radio apparatus, equipment or facilities seized under
subsection (2) (b) shall be held by the Authority until:
The Authority has had difficulty monitoring the use of non type-approved telecommunications equipment due to the fact that s101 makes no reference to s54 as an offence which induces criminal liability. As such, the Authority cannot take decisive action like seizing the equipment when a person is found in possession of equipment that is not type approved.
A similar argument can be made for section 56 to become an offence which induces criminal liability.
It is proposed that this be dealt with by amending section 101 (b) to include section 54 (1).
S101 (b) -- contravenes the provisions of section 30(1), 31(1), 32(1), 54(1); 56(1); or
The Authority should be in a position to dispose of equipment and facilities confiscated when an offence in terms of s101 is committed. Currently, the Act indicates that the equipment or facility will be forfeited to the Authority who will then credit the Telecommunications Fund. The Telecommunications Fund does not exist, and furthermore, the process should be streamlined, as such the following amendment is proposed:
The court convicting a person of any offence contemplated in section 101 may, in addition to any fine or imprisonment which it may impose in terms of that subsection, declare any telecommunication facility or equipment and any other article, object or thing by means of which such offense was committed, to be forfeited to the Authority for the Authority to dispose of such facility or equipment [for the credit of the Telecommunications Fund] in a manner to be determined by the Authority …
Section 96(5) – the reference to subsection (1) in the first line should be amended to read subsection (4).
Section 35(4) has the words "subject to section 36(6)." This does not make sense as 36(6) just repeats what s35(4) says. However because s36(6) is located under the "PSTS licence clause" it could be mis-used. The words "subject to section 36(6)" should be deleted from s35(4).