1. Definitions: either the lack thereof or their ambiguity;
2. Licensed rights: lack of clarity, and sometimes ambiguity, as to the scope or nature of the licences and/or under what conditions or circumstances they are granted;
3. Inconsistencies and contradictions: provisions are inconsistent with, or contradictory to, other provisions or definitions;

While these issues are discussed in detail in section 2 of this document together, where appropriate, with Telkom's suggested amendments, the following paragraphs provide an overview of their nature and of the reasons why they are of concern and, in Telkom's opinion, need to be addressed.

1. Inadequate definitions

One of the main shortcomings of the Telecommunications Act, 103 of 1996 (the principal Act), is the lack of appropriate definitions, in particular with the various types of services. This has lead to a string of disputes in the market, most of which the Authority has been unable or unwilling to resolve, and some of which have landed in the Courts. A typical example of this is the still festering dispute between Telkom and the value-added network services providers as to the nature and type of services that a these licensees are legally entitled to provide. Following from this, whether the virtual private network services they are providing constitutes either the illegal provision of public switched telecommunication service, the illegal resale of Telkom's facilities or both.

The Telecommunications Amendment Bill purports to address this issue without succeeding as in most instances reference is made in the definition section to a section of the principal Act wherein a concept is used but not defined. This creates a circular reference that adds no clarity to the matter and amounts to little more than a naming convention. Typical examples of these are, among others, the definitions of "local access telecommunications service", "national long distance telecommunications service", and "value added network telecommunications service".

Some definitions appear to be in conflict with other definitions or with the provision of the Bill (or of the principal Act) in which they are used. Further they appear to be in conflict with definitions contained in Telkom's licence which Section 32B of the Amendment Bill provides shall be the basis of the second national operator (SNO) licence. Section 32B provides that the SNO shall be "granted a public switched telecommunication service licence on no less favourable terms and conditions than those of the licence granted to Telkom".

Appendix A contains some of the definitions in Telkom's public switched telecommunication service licence which are relevant to the issues discussed in this submission.

Vagueness as to the scope of the various types of licences was a shortcoming of the principal Act. This lack of clarity, and sometimes ambiguity, as to the scope or nature of the licences and/or under what conditions or circumstances they can be granted is even more prevalent in the Telecommunications Amendment Bill, in particular in respect of the new categories of licences that are introduced. This uncertainty is compounded by the introduction of new licence terms and categories not only at variance with existing categories of public switched telecommunication service licences contained in the Act, which form the basis of the public switched telecommunication service licensing regime but also of licences issued to date. A typical example of this is the "underserviced area licence" where no attempt is made to define the scope of the licence, other than to state that it is for the provision of telecommunications services.

Some provisions in the Telecommunications Amendment Bill are inconsistent with other provisions and/or definitions in the Bill or in the principal Act. A clear example of contradiction is found in the definition of the fixed-mobile service which, in its name and in the reference that it makes to section 37 of the principal Act (mobile cellular licence), clearly implies that the licence should encompass some element of mobility. The text of the definition, however, refers to the provision of a wireless fixed service connection. Examples of ambiguity are to be found in the definition of multi-media service and in the use of two distinct concepts: "resale" and "facilities leasing" as if they were interchangeable.

While the intent of this new definition is reasonably clear to Telkom, namely: to define one of the services that Sentech would be licensed to supply, nevertheless the definition gives rise to certain issues and concerns that, Telkom submits, should be addressed for the sake of clarity.

The term 'carrier' is foreign to the telecommunication terminology commonly used in South Africa, where, however, it has an appropriate equivalent. The term is commonly used in the United States, where it is generally accepted that:

"'carrier' means any company authorised by a regulatory agency to provide telecommunication services"

thus, in South African terms, 'carrier' means a telecommunication licensee.

In the USA a distinction is made between different types of carrier, in terms of what they may or may not do. Thus, reference is made to 'local exchange carrier's, 'inter exchange carriers', 'international carrier's, who, when they offer their services for a fee directly to the public are collectively referred to as 'telecommunication carriers'. These categories would be approximately equivalent to what is referred to in the South African Telecommunication Act as persons licensed to provide local access, national long distance, and international telecommunication services.

A particular type of telecommunication carrier is the 'common carrier", characterised by having to offer a range of carrier services and facilities on a non-discriminatory basis and under operating rules mandated by the regulatory authority (the public switched telecommunication service and mobile cellular licensees in South Africa).

A "carriers' carrier", on the other hand is a carrier licensed to offer telecommunication services or facilities to other carriers but not to the public.

The definition in the Telecommunications Amendment Bill strongly indicates that the concepts "carrier of carriers" and "carriers' carrier" are similar in nature (being responsible for provision of service to other licensees but not directly to the public) but different in scope as in the Bill use of the term is restricted to the provision of an international telecommunication service. However, it is clear that "carrier' in the United States refers to an entity, whereas in the definition it is clearly defined as a service. This is, however, in conflict with the text in section 32C, as further commented therein.

There is an inconsistency in the text, which refers to "interconnected long distance telecommunication service and international telecommunication operator"

Telkom recommends that the term "service" be used in both instances thus:

This term is of American origin as is the term 'central office" and is generally used to refer to 'a facility of a telecommunication common carrier where calls are switched". In South African and in most of the world's terminology it is known as an "exchange". An 'end office" is a central office to which subscribers are connected or, in South African terminology a "local exchange".

Telkom would accordingly recommend that the term "local exchange" rather than "end office" be used. Also, the manner in which the term "end office" is used in the Bill is such that the reference to "location or place" is ambiguous, as it could refer to the exchange or only to the Main Distribution Frame (MDF) in the exchange. Furthermore, the reference to "trunks" could be equally misleading, as it would exclude from the definition the exchange concentrators, to which many subscribers are directly connected. Thus:

The definition as it stands includes, besides the public switched telecommunication service licensees, "…any other person who provides a licensed telecommunication service by means of a telecommunication system". The definition is open ended in character and accordingly would include all Chapter V licensees, including VANS and PTNs, all of whom would be "operators". It would also suggest that there is to be no legislative limitation on the number of fixed line operators that could operate either in terms of this or any other legislation.

A further interpretation of this definition would be that another category of licenses could be issued, beside the public switched telecommunication service, to provide a form of fixed telecommunications services. This can hardly be the case if the intention is to license only one additional facilities based competitor to Telkom. Telkom would rather suggest that the definition of 'fixed line operator' be limited to holders of a licence to provide public switched telecommunication service and that the phrase "…or any other person who provides a licensed telecommunication service…" be deleted, the amended definition thus becoming:

The service is defined as a "connection to the public switched telephone network" provided by the "holder of a public switched telecommunication service license". It is, therefore, meant to be a public switched telecommunication service service.

The first comment that Telkom wishes to make on this definition is that it clearly refers to a "connection" from a customer to the local exchange from which the customer is served ('end office'). This connection is commonly known as the "local loop" and in Telkom's public switched telecommunication service licence as an Exchange Line. It is, therefore, an integral part of the public switched telecommunication network, as it is currently constituted.

The second comment to be made is that such a connection is a "wireless" connection, i.e. established by means of radio, to the "user's premises". It is, in other words, a "wireless local loop", the provision of which is not only common practice it is also an integral element of Telkom's local access services. While the service is called "fixed-mobile", no mobility whatsoever is envisaged in terms of the definition. The name is accordingly a misnomer.

To reiterate: the service, as defined, is "a connection between the local exchange and the user's premises". It is accordingly difficult to see what rights granted by incorporating this service in a public switched telecommunication service licence, as it is already part of Telkom's public switched telecommunication service licence.

The reference to section 30 of the principal Act is unnecessary. Section 30(3)(b) unequivocally states that a frequency spectrum licence is required, in addition to a telecommunication licence, when radio is used in the provision of a telecommunication service.

The reference to section 37 of the principal Act (mobile cellular telecommunication services) is rather more puzzling. Since the definition, as it stands, only refers to a fixed radio connection, it is inconceivable that a mobile cellular licence should be required to provide the service. In any event, as said above, Telkom's public switched telecommunication service licence already provides for this right. However, the mention of section 37 in this definition may provide some guidance as to what the intention of the drafters may have been, namely: to give a public switched telecommunication service licensee the right to provide a mobile service, but not one equivalent to a mobile cellular telecommunication service, the latter of which can only be provided in terms of a section 37 licence.

Furthermore, in accordance wit section 34 of the principal Act an application for a section 37 licence can only be entertained after an invitation by the Minister. Consequently Telkom and the SNO would not be allowed to apply for such licence.

The main characteristic of a mobile cellular service is that a user can access the network, and be accessed from it, anywhere in the country. Its service number is in fact not geographically bound. In contrast to this, the user of a public switched telecommunication service can only obtain service from the exchange to which it is connected, as defined by its service number, which carries a geographical significance. If mobility is now added to a public switched telecommunication service, as made possible by the use of radio connection, but the other primary differentiation between public switched telecommunication service and mobile cellular is retained, then the public switched telecommunication service user could obtain service either from a fixed point or whilst in motion, but only within the geographical area served by user's exchange (this as defined by user's service number).

The above interpretation is the only one, which would seem capable of giving meaning and efficacy to the concept 'fixed-mobile'. It should be noted that the policy pronouncements in this regard have been many and conflicting and that the Telecommunications Amendment Bill has made little contribution towards resolution. Nevertheless, the following definition of fixed-mobile service is offered, to replace the one in the Telecommunications Amendment Bill:

Proposed new definition:

The local access telecommunication service is mentioned in section 39 of the principal Act but is not therein defined. It is not clear, therefore, what type of service is intended to be licensed in terms of section 39. Telkom strongly recommends that an appropriate definition be provided to enhance the applicability of the Act.

In broad terms, the local access service is a telecommunication service provided by a facilities based licensee within a defined geographical area. It allows any customer of the licensee:

1. to communicate with any other customer of the licensee within the area covered by the local access licence; and
2. to communicate with the customers of any other operator through the interconnection that the local area licensee has, directly or indirectly, with those operators.

The right to provide local access telecommunication services is imbedded in the licence right to provide public switched telecommunication services, with respect to which public switched telecommunication service licensees are entitled as licensees to provide the local access telecommunication service in each and every area covered by their licence (i.e. in the territory of the Republic). The principal Act, however, also envisages the local access telecommunication service as a service that is capable of being separately licensable outside of the public switched telecommunication service licence framework. A definition of local access telecommunication service is provided in Telkom's public switched telecommunication service licence. Telkom recommends that such definition be adopted in the Telecommunications Act.

Alternatively, Telkom would propose the following more generic definition:

(i)

The multimedia service is defined as a " digital broadcasting service". Aside for the problems inherent in the licensing of a broadcasting service in terms of the Telecommunications Act, 'broadcasting' is defined in the Broadcasting Act, 4 of 1999, as a "unidirectional telecommunication (service) intended for the public". In other words, it is a unidirectional point–to-multipoint telecommunication service. However the services to be provided under this rubric are referred to as 'interactive'. For this to be possible within the scope of a broadcasting service licence, the service delivery path would have to be provided by the broadcasting system while the request path is provided via the public switched telecommunication service. Given that only the distribution (service delivery) path would in this context be provided in terms of the multimedia licence, Telkom suggests that the phrase "in an interactive format" be deleted from the definition. Accordingly Telkom would propose that the service be defined as:

This will not only ensure greater clarity but will also allow for the delineation of the component elements of the service.

The proposed multimedia service remain are a source of concern from a number of standpoints. To begin with in terms of Section 34 the licensing of any new telecommunication service should be as prescribed. There is little evidence that this is a service that is prescribed either in terms of Section 34 (2)(v) or in terms of any other process even though it is stated in the memorandum of objects that the multimedia service will be a new telecommunications licence category (paragraph 2.7). The envisaged multimedia service also contains elements of licensed telecommunication services, in this instance of both VANS and public switched telecommunication service. Services such as Internet access, video on demand and e-commerce are held to be multimedia services when they for the most part are e typical VANS applications, as described in the Act. If the multimedia service is, as would seem is intended, to be the touchstone for converged services it should be explicitly acknowledged that a considerable portion of the services encapsulates under the digital multimedia service moniker may just as easily be provided by other parties as either VANS or public switched telecommunication service.

There are in addition problems in the ambiguous and confusing manner in which the services are described.. The multimedia service is held to included services described as "data" and "text." The provision of public switched telecommunication service includes the right to convey signals, of which the conveyance of data is a subset. The term '"text" is not defined and is meaningless in the telecommunications context. The only reference to 'text' as a service is to be found in the Broadcasting Act, where it is a substitute for written word. The proviso that the multimedia service shall not include public switched telecommunication service does not provide any clarity as to how the elements of the multimedia service which approximate public switched telecommunication service are to be distinguished from public switched telecommunication service.

In the absence of any definitive characterisation of these services and concepts like "combination of media' remain nebulous as do many of the specific services it is important that safeguards are adopted. It is for instance by no means clear what distinguishes graphics from animation, video from visual content as sub-categories of telecommunications services. Accordingly it is important that the licence right that is granted to Sentech does not amount to an exclusive right to provide all or any of the services listed as "multimedia services". Similar services may be provided in terms of either a VANS or public switched telecommunication service license or in terms of the envisaged changes to the Broadcasting Act by other similarly licensed parties.

This is an example of a definition that does not amount to more than a naming convention, since the national long distance telecommunication service is mentioned in section 38 of the principal Act but is not therein defined.

In broad terms, national long distance telecommunication service is a service provided by a facilities based licensee for the purpose of facilitating communication between two separate local access telecommunication service areas. Customers must subscribe to the long distance service and access it via the local access provider to whom they are connected.

Here too it should be noted that the right to provide national long distance telecommunication services is imbedded in the right to provide a public switched telecommunication service, public switched telecommunication service licensees are entitled to provide these services between any of the local areas covered by their licence (i.e. in the territory of the Republic). The principal Act, however, also envisages the national long distance telecommunication service to be a service that is separately licensable outside of a public switched telecommunication service licence. A definition of the national long distance telecommunication service is provided in Telkom's public switched telecommunication service licence. Telkom recommends that such definition be adopted in the Telecommunications Act. The definition, together with the necessary auxiliary definitions, is reproduced for convenience in Appendix A.

Alternatively, Telkom would propose the following more generic definition:

The definition of number portability in the Telecommunications Amendment Bill is extremely wide in scope. It refers to the ability of a customer to retain his or her telephone number regardless of which licensee provides the service, or of the nature of the new and old service, or of the location, where applicable, at which the new service is provided in relation to the old one. Thus it should be possible, in terms of the definition, to retain a telephone number when changing:

1. from one mobile cellular licensee to another;
2. from a mobile cellular licensee to a public switched telecommunication service licensee or to a local access telecommunication service licensee, and viceversa;
3. from a public switched telecommunication service licensee or a local access telecommunication service licensee to a public switched telecommunication service licensee or to a local access telecommunication service licensee, and regardless of whether or not the service is to be provided at the same location as the old one or not; and
4. in the case of a public switched telecommunication service licensee, when changing the physical location at which the service is provided, even if by the same licensee.

There are considerable technical hurdles to be overcome in implementing such capabilities and costs of doing so would be prohibitive. Telkom, cannot accede to the proposition that number portability should be statutorily mandated in South Africa, at least not until a thorough study has been made of the effective demand for the capability, the benefits to be derived from it and the costs to be incurred in implementing and maintaining it.

Telkom strongly believes that the definition is so wide ranging that it can only lead to arguments and disputes in any attempt to implement it, and that this is unnecessary. Telkom recommends that a more specific definition be provided, based on the arguments offered below. Telkom is not able to comment on the advisability or practicality of implementing mobile-to-mobile number portability.

Telkom believes that number portability between the fixed and mobile networks should be avoided. Aside from any consideration of technical complexity and the cost of implementation, such a capability would be contrary to the interest of the general public since a person making a call to a ported number would not know whether the call is to a fixed or to a mobile number and, therefore, would not know before hand the tariff that will apply to the call.

Telkom also believes that number portability when a change of location is involved should also be avoided. Here too the general public may be detrimentally affected when making a call to a ported number, as the geographical information carried by the number would be lost and here also the calling party would not know before hand the tariff that will apply to the call. Furthermore, this capability can only be implemented by means of a full Intelligent Network (IN) solution. This is not only the most costly of the possible technologies that could be used for implementing number portability, which may also not be the best one for the South African market in the foreseeable future. Telkom submits that the Act should not mandate (even if only implicitly) any one technological solution, and that the choice of the appropriate technology, where alternatives exist, should be left to the industry.

It should be noted that number portability at the same physical address is the only type of number portability for fixed numbers contemplated in the European Community's Numbering Directive (98/61/EC).

In conclusion, therefore, Telkom submits that the following definition be used:

Section 39(2) of the principal Act refers also to the public pay-telephone service, as distinct from the local access telecommunication service contemplated in section 39(1). The public pay-telephone service is also not defined and Telkom recommends that the following definition be inserted in the Act:

The definition of public switched telecommunication network provided in this section of the Telecommunications Amendment Bill defines the concept in general terms. However, the public switched telecommunication network is also defined in the new section 36(B) in much more detail. Telkom believes that having two different definitions in the Act for the same concept is inappropriate, unless the second definition is meant to identify an exception to the general meaning, applicable only to the section in which it appears or as otherwise explicitly indicated. As this does not appear to be the case, and section 36B contains no substantive provisions but is merely a description, Telkom recommends that only one definition be retained. Telkom also strongly recommends that such definition be contained in the definition section of the Act, as this will give it unambiguous applicability throughout the Act. Of the two definitions in question, Telkom recommends that the text contained in section 36B of the Telecommunications Amendment Bill be used as the definition, and accordingly the section should then be deleted.

Telkom, however, suggests that certain amendments be made to the text of the definition, as contained in section 36B, as discussed herein.

• The expression "such as" in the first sentence of the definition should be replaced by the expression "including, but not limited to".
• The definition of "fixed-mobile service", both as proposed by the Telecommunications Amendment Bill and by Telkom, clearly identifies this service as a public switched telecommunication service, to be added by the Telecommunications Amendment Bill to other service such as the local access or the national long distance services. It is not appropriate, therefore, to refer in the amended Act to "public switched telecommunication services and fixed-mobile services" as if they were separate concepts. Thus the expression "and fixed-mobile services" in the first sentence of the definition should be deleted. It would be appropriate, however, to refer to a "fixed-mobile network" as a component of the public switched telecommunication network and it is proposed that such expression be added to the definition.

It should be noted, furthermore, that the expressions "terminal connection point" and "network connection point", used in section 36B, are not themselves defined. However, these are not terms subject to a generic interpretation, but have a very specific technical meaning in the context of a public switched telecommunication network. Telkom therefore strongly recommends that appropriate definitions of these terms be provided. In so far as these terms are used and defined in Telkom's public switched telecommunication service license, it is recommended that such definitions be used in the Act. This would be necessary, whether or not the definition of public switched telecommunication network is contained in the definition section of the Act or in the proposed new section 36B is used.

In conclusion, Telkom would recommend that the current definition of public switched telecommunication network in section 1 of the Telecommunications Amendment Bill be replaced by the following definition, being an amended version of the definition in section 36B:

The definition of public switched telecommunication service provided in this section of the Telecommunications Amendment Bill is confusing. The public switched telecommunication service is herein defined by reference to section 36 of the principal Act, where such service is mentioned, but not defined. On the other hand, the new section 36A purports to provide a full definition of the service.

For reasons similar to those mentioned in respect of the definition of public switched telecommunication network, Telkom strongly recommends that a definition of public switched telecommunication service be provided in the definition section of the Act, using essentially the text in section 36A, and that section 36A, accordingly, be deleted.

Telkom, however, suggests that certain amendments be made to the text of the definition, as contained in section 36A, as discussed herein.

• The first sentence of the definition refers to public switched telecommunication service as services provided "to the general public on a subscription basis". This statement is incorrect on two accounts:
• public switched telecommunication services are not provided only to the general public, but also to other licensees such as mobile operators, VANS operators, etc.;
• not all public switched telecommunication services are provided on a subscription basis. The provision of some services, such as telephone services to customer premises, entails both a subscription charge (line rental) and a usage charge (calls), while the provision of others, such as public pay-telephone services and certain packaged offerings, do not require any subscription.

• The reference to section 39 in paragraph (c) is unnecessary and should be deleted, or else similar references should consistently be made in other paragraphs, as appropriate.
• The term "marine" in paragraph (e) is not defined. Perhaps the drafters of the Telecommunications Amendment Bill intended to refer to the "maritime service", which is an international service defined in the Radio Regulation of the ITU, and which is considered an element of Telkom's public switched telecommunication service licence. Telkom recommends that the term "marine" be replaced by "maritime".
• As previously discussed, the fixed-mobile service has been introduced by the Telecommunications Amendment Bill as a public switched telecommunication service. Telkom recommends that it be included in the definition of public switched telecommunication services as a new paragraph (h), the existing paragraph (h) and following paragraphs being re-numbered accordingly.
• The expression "such as" in paragraph (h) should be replaced by the expression "including, but not limited to".
• The logical structure of this definition, which is exactly the same as that found in the corresponding definition in Telkom's public switched telecommunication service licence, is that:
• paragraphs (a) to (g) make a direct reference to services that are contemplated to be encompassed in the public switched telecommunication service;
• paragraph (h) refers to the network that is to be used in the provision of public switched telecommunication services and then it expands on the previous paragraphs by explicitly indicating that one of the public switched telecommunication services is the provision of telecommunication facilities to be used by other licensees (sub-paragraphs (i) to (v)), consistently with other provision in the Act in this regard.

• Unlike the definition in Telkom public switched telecommunication service licence, however, the logic structure of definition contained herein breaks down, and unnecessarily so in Telkom's opinion, in (vi) to (viii). Here reference is made to telecommunication facilities and/or technologies that the public switched telecommunication service licensee will employ in its network to provide the services that it is licensed to provide, and not to facilities to be made available, as such, to other licensees.

• Sub-paragraph (2) of the definition is confusing:
• the reference to section 30 of the principal Act is unnecessary. Section 30(3)(b) unequivocally states that a frequency spectrum licence is required, in addition to a telecommunication licence, when radio is used in the provision of a telecommunication service;

• The reference to section 37 of the principal Act (mobile cellular telecommunication services) is puzzling. Since the definition, as it stands, would implies that a public switched telecommunication service licensee would need to also obtain a mobile cellular telecommunication licence. This could not possibly have been the intention of the drafters. However, in the corresponding definition in Telkom's licence the provision of mobile cellular telecommunication services under the public switched telecommunication service licence is explicitly excluded. Telkom recommends that such unequivocal approach be taken in the Act.

In conclusion, Telkom recommends that the definition of public switched telecommunication service in section 1 of the Telecommunications Amendment Bill be replaced by the definition shown in the next page, being an amended version of the definition currently in section 36A:

Telkom understands the definition in the Telecommunications Amendment Bill to mean that there is a party, who:

1. is licensed to provide public switched telecommunication services;
2. leases telecommunication facilities from a facilities based licensee; and
3. uses these facilities to provide services to its customers.

There are two fundamental concepts in the definition: the one is the leasing of facilities with which to build up a service to be sold to customers, and the other is the resale of a service to customers that has been built by someone else. These two concepts are conflated in this definition and accordingly confused.

Internationally a reseller is recognised as a telecommunications service provider primarily engaged in the purchase of telecommunication services in bulk at wholesale tariffs for resale to consumers at a retail tariff. The Telecom & Networking Glossary, for example, defines "resellers" as:

In other words resale is a form of service-based competition. Usually the reseller does not own any network infrastructure. A good example of a reseller is the cellular service providers who purchase airtime from the mobile cellular network operators for resale to their customers. Another example is the international reseller who buys traffic minutes in bulk from an international operator from one country to another and retails it to his or her customers.

Facilities leasing on the other hand is the leasing of telecommunication facilities, in the main by facilities based operators to either of the following:

1. service providers: to enable them to provide services (e.g. electronic commerce) over these facilities;
2. cellular mobile operators: to build up the fixed link elements of their networks;
3. facilities based public switched telecommunication service operators: to build elements of their public switched telecommunication network to provide their own licensed services in competition to the incumbent, pending the full roll out of their own networks;
4. individual users: to build networks for their own private use, such as private telecommunication networks.

Although a reseller may also lease facilities, the leasing of facilities does not necessarily make the lessee a reseller. In all instances the manner in which the party is licensed and the intention of the party to whom the facilities are made available is paramount.

Telkom is particularly concerned that clarity be achieved on this issue, as past experience has shown the lack thereof has led to protracted disputes and litigation that neither the Authority nor the Courts have yet fully settled. For example, VANS providers have been leasing telecommunication facilities from the public switched telecommunication service operator ostensibly to be used in the course of providing VANS to their customers. What some of these VANS operators have provided to their customers, however, is a service consisting in the making available to them of telecommunication facilities, repackaged in the form of a virtual private network (VPN). These VANS providers, therefore, have not been using the telecommunication facilities to provide a service they are licensed to provide (say e-commerce) to customers but rather have been reselling the facilities to them, in contravention of sections 40(4)(a) and 41(2) of the principal Act.

The stated policy of the Government as envisaged in the proposed sections 32A(1)(c) and 32A(5) has been that reselling or service-based competition will only be considered in May 2005 after the completion of a feasibility study into its advisability. Telkom supports this approach and would request that the reference to 'resale ' or reselling be made only in the context of the introduction of service-based competition. The right of the SNO to use Telkom’s facilities to provide public switched telecommunication service for a defined period amounts to facilities leasing, and should be referred to as such.

It should also be noted that this definition makes reference to the provision of public switched telecommunication service on facilities not owned by the provider of such services. In other words public switched telecommunication service provided on facilities leased from another entity. This would imply that a public switched telecommunication service operator would be classified as a reseller even if a single facility were leased from another entity. Furthermore, only holders of a public switched telecommunication service licence can engage in resale. This would be a peculiar situation, unlike in any other telecommunication market were resale is permitted, and Telkom doubts whether such was the intention of the legislator.

Telkom therefore recommends that the following definition of resale be adopted:

Telecommunication facility in the current principal Act is defined as any "…wire, cable, antenna, mast or other thing, which is used for or in connection with telecommunication". Generally the term facility is limited to an object. The Telecommunication Amendment Bill however includes in its definition of telecommunication facility "right of way" and "area".

A right of way, which is separately and clearly defined in section 70(1) of the principal Act cannot be construed to fall within the definition of facility and the term "area'" is also too ill defined as to be construed as a telecommunication facility.

There is no provision for co-location or co-location space in the Act. Co-location space has to be created in terms of a commercial agreement entered into between two licensed operators in accordance with the Interconnection and Facilities Leasing Guidelines. The references to right of way, area and co-location space should accordingly be deleted.

Under-serviced area licences are referred to in section 40A of the Telecommunications Amendment Bill. The section refers to the licensing of small businesses for the provision of "telecommunication services and facilities" in certain areas. Such terminology is extremely vague and provides no indication as to what services can be licensed under this category. The phraseology in section 40A, as well as that in the "Memorandum of objects of the Telecommunications Amendment Bill", strongly indicate that an under-serviced area licence is a local access telecommunication service licence to be issued in certain areas to certain entities, as provided for in section 40A.

Telkom therefore suggests that the following definition be inserted in the principal Act, before the definition of "universal access"

Telkom has other concerns in respect of the provisions of section 40A, which are discussed later as appropriate.

See Telkom's comments on the amendment to section 40 proposed by the Telecommunications Amendment Bill in respect of the usage of this expression.

The definition is incomprehensible as it provides no basis to distinguish a virtual private network from other types of private telecommunication networks

The inclusion of "other telecommunication facility" is equally problematic. There is no indication of what this might be nor does it provide any further clarity on what is meant by a virtual private network. In any event, if as stated a virtual private network is a private telecommunication network then, in terms of section 40(2)(a) of the principal Act it must be provided by means of telecommunication facilities made available by a public switched telecommunication service licensee to the operator of the service and not an intermediary who is then assumes responsibility for the provision of the service, as is envisaged. These facilitates are, and can only be, facilities of the public switched telecommunication network. The only exception to this rule is as contemplated in section 40(2)(b).

Telkom accepts that a virtual private network is a private telecommunication network as envisaged in section 41 of the principal Act, and is subject to its licensing provisions. More specifically, a virtual private network is that form of implementation of a private telecommunication network that uses technology, such as packet switching, to create out of the underlying telecommunication infrastructure a network which is "virtually" dedicated to the private use of a person, albeit the telecommunication facilities on which it is based are not. This in contrast with the more traditional implementation of a private telecommunication network where the telecommunication facilities used are dedicated to the exclusive use of the private telecommunication network and cannot be used by the public switched telecommunication service licensee for any other purpose.

To provide clarity on this issue, Telkom suggests that the following definition be used:

The definition of voice over the internet protocol in the Telecommunications Amendment Bill contains, and unfortunately perpetuates, a not uncommon confusion between two separate and distinct concepts: those of voice over the "internet protocol" (or VoIP) and voice over the "internet".

The Internet Protocol, or IP, is a communication protocol, i.e. a set of rules and procedures aimed at facilitating the reliable transmission of telecommunication signals over telecommunication networks. As such, the function of IP is similar to that of other communication protocols, such as the "X.25" and "Frame Relay" packet switching protocols used primarily in data communication (in fact IP is itself a packet switching protocol) or the "Signalling System Number 7" used in circuit switched telephony.

Some communication protocols and networks were developed to optimise voice communications, and other protocols and networks were developed to optimise data communication (IP being one of them in relation to the Internet network, whence its name). Advances in network technologies and in protocol structures, however, are blurring this distinction, so that voice signals, once digitised, are indistinguishable from data signals inside a network, and data communication protocols have now acquired the capability of handling the idiosyncrasies of voice (e.g. intolerance to some transmission delays or to echoes). Consequently, data communication protocols are becoming capable of satisfactorily carrying voice telephony. IP is one such protocol.

The South African statutory telecommunication environment has, for the most part, followed a technology neutral approach to the licensing of services. Since VoIP is but a technology that can be used to provide a voice telephony service, there is no need to make reference to it in the licensing regime. Any person licensed to provide voice telephony should be free to choose the technology that it deems appropriate, including VoIP, to provide such a service, within the overall constrain imposed by the Act (e.g. on spectrum usage).

The provision of voice over the Internet can only mean the provision of voice telephony as an Internet service. Clearly, the IP will be used to provide this, like any other Internet service, hence the confusion in the definition. It is the characteristics of a service and not the technology used to provide it that determine the appropriate licensing conditions. Providing voice telephony using a technology that is commonly used in the Internet (IP) is not the same as providing voice as an Internet service. In South Africa an Internet service is characterised as a VANS. A VANS licensee may not provide voice telephony, by whatever technology. Voice over the internet can only be provided with the participation of Internet Service Providers (ISP) (albeit not necessarily with their knowledge or consent). Should it take place (with their knowledge?) the ISP would be in breach of section 40(3) of the Act. It should be noted that it would be difficult to limit the provision of this service to a specified region with respect to most applications. For example a PC-to-phone application may be limited to a geographical area, but it is impossible to do so with a PC-to-PC application.

Telkom recommends that this definition and the provisions in the Telecommunications Amendment Bill where the concept is used be deleted, to avoid perpetuating that above confusion. It would also wish to reiterate that it is not necessary, and in fact undesirable, to prescribe in the Act which technology may be used to provide a service, unless the circumstances make it absolutely necessary, which is not the case here.

The proposed amendment adds, as a further objective of the principal Act, to "promote and facilitate convergence of the telecommunication, broadcasting and information technology." The term "convergence" is however not defined in the amendment Bill and the Bill does not address how this object is to be achieved.

No comments.

4. Amendment of section 29 of the Act

No comments.

5. Insertion of section 30A and 30B in the Act

The provision that both the SNO and Telkom are deemed to be holders of the 1800 MHz spectrum licence to provide services that the second national operator is licensed to provide is peculiar, in view also of the provisions of paragraph (b) which accords this right to both Telkom and the SNO. The wording used in section 30B(2)(a) seems more appropriate.

Telkom notes that the Authority is obliged to assign a radio frequency spectrum in the 1800 MHz band to the mobile operators within 30 days of receipt of an application as contemplated in section 30A(1)(b). However, in relation to the fixed operators, no period is specified within which the Authority is obliged to issue a radio frequency spectrum licence and to assign a frequency spectrum to the fixed operators.

Although section 30A(2) deems the fixed operators to be holders of a frequency spectrum licence, a right of this nature would be void until a specific sub-band in the 1800 MHz spectrum was assigned to each of these operators. Without an assignment of this nature they would be unable to provide any service in the 1800 MHz.

In order to ensure that the right granted to Telkom in terms of subsection (2)(a) is meaningful, and can be exercised without delay, subsection 30A(2)(c) should be revised to provide certainty the deemed rights do not remain void for an undetermined period.

Telkom therefore recommends that section 30A(2) be amended as shown in the next page:

Section 30B.

No comments.

Paragraph (a) states that Telkom and the SNO are the only holders of public switched telecommunication service licences, but it appears from the context in section 40A that the SMME’s under-serviced area licences is a sub-set of public switched telecommunication service. Telkom's proposed definition of under-serviced area licence and suggested amendments to section 40A should address any possible confusion in this regard.

Paragraph (a) provides that the SNO shall use for two years Telkom's facilities (presumably meaning telecommunication facilities) "on a resale basis". The issue of confusion between "facilities leasing" and resale has been discussed under the definition of "resale".

The SNO will not be "reselling" the facilities that it leases from Telkom but rather will use them, combined with the facilities that it over the two year period, to provide the services that the SNO is licensed to provide. This is exactly the same situation that pertains to the mobile cellular operators, who have used and continue to use telecommunication facilities provided by Telkom, in terms of section 37(2)(d) of the principal Act, to set up their networks. Except that, while the mobile cellular operators were obliged to use Telkom's facilities, the SNO is permitted, for two years, to use them.

Therefore, the reference to resale in this paragraph is inappropriate and confusing, and Telkom recommends that the paragraph be amended as follows:

Paragraphs (b) and (c) of subsection (1) are very clear in their provision - subject to a feasibility study:

• one or more public switched telecommunication service licences may be issued in future;
• if any licences are issued, at least one of the additional public switched telecommunication service licensees shall be service based, meaning that it will not be permitted (or not be compelled) to provide its own telecommunication facilities on which to provide its licensed services;
• as a corollary of (ii) above, other public switched telecommunication service licences may be issued, in addition to the service based one, which may be either service based or facility based.

Sub-section (6), however, appears to be in contradiction with the above as it seems to contemplate the granting, as a result of the feasibility study, of only service based public switched telecommunication service licences:

• paragraph (b) of sub-section (6) refers to "A holder of a licence contemplated in paragraph (a)", and sub-paragraphs (i) and (ii) clearly indicate that such a licensee must be service based;
• paragraph (a) of sub-section (6), on the other hand, refers to "any additional public switched telecommunication service licence" that may be granted, which would include therefore, for consistency with sub-section (2), both service based and facility based licences;
• however sub-paragraph (a)(i) of sub-section (6), refers to those licences that "may be granted to provide services-based competition";

These conflicting provisions can be reconciled if the reference to "paragraph (a)" in paragraph (b) of sub-section (6) is amended to read " paragraph (a)(i)".

Sub-section (6) also appears to confuse facilities based and service based licences:

• sub-section (6)(b)(i) correctly identifies these service based licences as those where the licensee does not have its own telecommunication facilities. The sub-section explicitly provides that the licensee "may not provide its own facilities until the Minister so determines"
• sub-section (6)(b)(ii) refers to the utilisation, by the licensees of the telecommunication facilities that they have obtained from Telkom and the SNO, "for a period of two years".

There is clearly a contradiction between the statements "until the Minister so determines" and " for a period of two years". While sub-section (6)(b)(i) is consistent with service base competition, sub-section (6)(b)(ii) would only make sense if the licensee in question were a facility based licensee, to whom, as in the case of the SNO, a period of grace of two years were granted in rolling out its infrastructure. This is clearly not the case and Telkom recommends that the phrase "for a period of two years" in sub-section (6)(b)(ii) be deleted.

Finally, sub-section (6) also contains confusing references to "resale" and "leasing of facilities".

Sub-section (6)(b)(ii) refers to the utilisation, on a "resale basis" by such licensees of the telecommunication facilities that they have obtained from Telkom and the SNO

As discussed under the definition of resale, a reseller sells to its customers on a retail basis the facilities or services that it obtains wholesale from other operators.

If the licensee contemplated in sub-section (6) "resells" the facilities, than these facilities are all that the licensee provides to its customers. This hardly amounts to the provision of public switched telecommunication services which, as contemplated in section 36A of the Telecommunications Amendment Bill, comprises a wide set of services, of which the making of telecommunication facilities available to customers is but one element.

If, on the other hand, the licensee contemplated in sub-section (6) is to have the right to provide the wide set of public switched telecommunication service, then this licensee is not reselling the telecommunication facilities that it leases from facility based operators, but rather is using them in order to provide the public switched telecommunication service that it is licensed to provide.

Telkom believes that this confusion needs to be eliminated. Telkom recommends that, if the licensee contemplated in sub-section (6) is to be licensed to provide public switched telecommunication service rather than resell facilities that sub-section 6 be amended to reflect this.

In conclusion, Telkom recommends that sub-section (6) be amended as follows:

The concept of "resale' is again used in sub-section (8) in the context of the leasing of facilities to public switched telecommunication service licensees. For the reasons discussed above, Telkom maintains that this is a confusion of concepts and recommends that sub-section (8) be deleted.

No comments.

As discussed under the relevant definition, a carrier of carriers is defined in the Telecommunications Amendment Bill as being a telecommunication service, rather than as being a provider of certain telecommunication services, as it is common in other jurisdictions. The wording in this section, however, refers to Sentech being able to "operate as a carrier of carriers". Furthermore, "an international telecommunication gateway" is not in the nature of a service contemplated in the principal Act or in the Telecommunications Amendment Bill. The gateway is more properly referred to as a telecommunication facility.

Telkom recommends that this confusing usage of the terms be eliminated and that the relevant sub-section be amended as follows:

Section 33 of the principal Act deals with the licences that may be granted in terms of the Act. Sub-section (1)(a) has been amended to include the service contemplated in section 32C(1)(b), i.e. the multimedia service to be granted to Sentech. The service contemplated in section 32C(1)(a), however, has been left out, probably by oversight. Telkom recommends that the sect be amended as follows:

No comments.

No comments.

No comments.

As discussed under the definitions of public switched telecommunication service and public switched telecommunication network, Telkom recommends that sections 36A and 36B of the Telecommunications Amendment Bill be deleted, to be replaced by appropriately amended definitions in section 1.

Telkom’s licence must be amended in order to ensure fair competition between Telkom and the second network operator. Although this eventuality is contemplated in section 48 of the Act, it is submitted that the Authority is granted discretion in this regard and has the right to elect not to initiate the process of amending Telkom’s licence. Accordingly, it is necessary to provide some assurance in the Act, in the form of an obligation on the Authority to amend Telkom’s licence in order to ensure fair competition between similarly licensed operators. The following new sub-section (10) is proposed for insertion in the Telecommunications Amendment Bill, namely:

2.12 Amendment of section 37 of the Act

No comments

No comments.

No comments.

Section 40 of the principal Act deals with the licensing of "value-added network services". The Telecommunication Amendment Bill amends Section 40(2) of the principal Act by substituting the term "electronic transaction service" for the term "value-added network service".

The Telecommunication Amendment Bill does not however define "electronic transaction service", which is, therefore, another undefined category of licence.

Notwithstanding the deletion of the term "value-added network service", a definition of the term is introduced in the Act by the Telecommunications Amendment Bill, albeit such definition is, as discussed earlier, an ineffective one. Furthermore, the term continues to be used in the title of the section, in other subsections of section 40, and by the proposed amendment to section 41 of the Amendment Bill. Unfortunately, a systematic replacement of the one term for the other, while it would eliminate the inconsistency, it would not solve the problem since the new term would still remain undefined.

As it stands, the term "electronic transaction service", is not used anywhere else in the Telecommunications Amendment Bill. On the other hand, the term "electronic transactions" is used in the definition of multimedia service, where it is said to include "e-commerce". The latter term is also not defined, but the Director General of Communications, in his presentation to Parliament, indicated that the term "electronic transaction service" will be defined in the proposed "Electronic Commerce" Act, which is being prepared by his Department where, presumably, the nature of the service and the telecommunication infrastructure required to support it would be clarified. It would appear, therefore, that the intention is to introduce the concept in the Telecommunication Act ahead of it being defined in a future Act whose contents the Department of Communications has yet to make known.

Telkom would be strongly opposed to such an approach, which would create the right for certain licensees to provide a service whose nature and scope is unknown on facilities whose character is also unknown. . Other than within this context, Telkom cannot see any reason to replace the one term for the other, and strongly recommends that the term "value-added network service" be retained in the Act, save for the need to provide a proper definition for it, as earlier discussed.

The proposed new paragraph (b) again introduces the concept of voice over the Internet protocol, this time within the context of value-added network services. This once more provides for intellectual confusion between:

• providing voice using the internet protocol as the underlying technology, which Telkom maintains is a vested right of public switched telecommunication service licensees and, in the context of the relevant definition proposed by Telkom, of under-service area licensees; and
• providing voice over the internet which given that Internet Access is indisputably a value-added service, would not simply be against Telkom's existing rights under its public switched telecommunication service licence but, just as importantly, be against the specific prohibition contained in section 40(3) of the principal Act.

Telkom submits that the proposed paragraph (b) is misguided and unnecessary and recommends that it be deleted.

In conclusion, Telkom recommends that none of the amendments to section 40 of the principal Act proposed by the Telecommunications Amendment Bill be implemented.

The Telecommunication Amendment Bill provides that: "the Minister shall by notice in the Gazette determine those geographic areas where less than 5% of the population has access to telecommunications services or facilities in respect of which small business may apply to the Authority for under-serviced area licences to provide such services or facilities."

This provision contains some key concepts that, in Telkom's opinion, need some discussion and perhaps clarification. These are essentially:

• the nature and scope of the services that can be provided under this licence;
• the geographical area in which they can be provided; and
• the basis and manner in which the "5%" threshold standard will be calculated.

These are critical aspects that are unfortunately not addressed in the Telecommunications Amendment Bill, nor are they addressed in the policy direction issued by the Minister (Notice 1756 of 2001, published in Government Gazette 22503 of 23 July 2001).

Before engaging in a discussion of the issues arising from the above, Telkom wishes to contextualise them by stating its understanding of the purpose of this type of licence, as follows:

1. Notwithstanding Telkom's massive roll-out of telephone services to under-served areas in the last five years, as per its licence obligations, many South Africans still do not have access to, or cannot afford, these services;
2. the primary causes of low service penetration are the very high cost of provision in certain areas, and the low income of people living in certain areas, of South Africa. These high-cost and low-income areas tend to be very strongly correlated;
3. the Government has elected to address this problem, to a certain extent, through the mechanism of the under-served areas licences. Since these would be licensees will be confronted by the same high-cost/low-income issue that confronted Telkom, service provision and service usage in these areas will have to be subsidised, for which provision has also be made in the Policy and in the Telecommunications Amendment Bill (e.g. the enhanced universal service fund);
4. in addition, with a view to promoting job creation and the participation of historically disadvantaged people in the telecommunication sector, only SMMEs will be licensed to provide these services.

Telkom fully supports these policy objectives and, to a large extent, the mechanism to be used to achieve them. Nevertheless, Telkom believes that more clarity and certainty is required on the earlier mentioned aspects to avoid confusion and possible disputes, and thus promote the success of the policy.

Firstly, Telkom believes that the nature and scope of the services to be licensed must be identified much more precisely than by the very generic expression "telecommunication services and facilities" herein used. Telkom believes that classifying these licences as "local access service licences" using an appropriate definition of "local access services" will address this issue while meeting the objectives of the policy.

The second and third issue, of how to define and circumscribe the geographical area in some objective or ascertainable manner, and how to determine the penetration therein in relation to the threshold of 5% penetration, are correlated. It is critical that the relevant area be defined on the basis of some objective criteria and that these have a clear and definable relationship with the public switched telecommunication network exchange areas, else it would be almost impossible or meaningless to calculate teledensity. Also, the expression "access to telecommunications services or facilities" is too undefined to determine what it is that has to be measured.

The normal standard to express teledensity is "number of fixed telephone services in use per 100 people". In Telkom's view, a magisterial district would be a good basis to circumscribe the area of a licence, as it would provide good information on population. On the other hand, the area served by Telkom's exchanges, as listed in Telkom's public switched telecommunication service licence also provide a well defined geographic delimitation and would provide good information on number of services in a particular area. In fact Telkom's exchange areas and magisterial districts tend to coincide, especially in the less densely populated areas.

Finally, it is unclear whether the number of telephone services provided by Telkom will be used to calculate teledensity or whether the services to be provided by the SNO will be taken into account.

Although it might be considered inflexible to provide all the necessary details in an Act, nevertheless decidedly more clarity than that which is provided in section 40A(1) is absolutely necessary. Telkom's proposal is that:

• the Act require that the Minister issue a policy direction providing the basic criteria to be used in identifying qualifying areas;
• the Authority conducts the necessary study or studies to identify, on the basis of the said Policy Direction, the areas that qualify, and report its finding to the Minister accordingly; and
• the Minister determine by notice in the Gazette the areas thus identified in respect of which licences can be applied.

Telkom, therefore, proposes that the following sub-sections replace sub-section (1) in the Telecommunications Amendment Bill (and consequential renumbering):

Sub-section (3) of the Telecommunications Amendment Bill again refers to the "voice over Internet protocol". As previously discussed, Telkom believes that the specific provision of the service is unnecessary in respect of public switched telecommunication services, and the sub-sets of PSTS such as local access telecommunication service in under-serviced areas services and its use can also lead to confusion.

Telkom recommends that the sub-section be amended as follows:

There is a contradiction between sub-section (4), which contemplates that the Minister issues the under-serviced area licence, and sub-section (2), which stipulates that the Authority grants such licence.

Telkom recommends that sub-section (4) be amended as follows:

The Telecommunications Amendment Bill introduces, by way of sub-paragraph (1)(b)(ii), what appears to Telkom to be a major deviation from the current licensing regime for private telecommunication networks and value-added network services, and it does so in a manner which is confusing. Telkom is very concerned in respect of the content and form of this proposed amendment.

In essence the amendment provides that "a holder of a value-added network service licence may operate virtual private networks without first obtaining a private telecommunication network licence’’.

On the face of it this would appear to say that a value-added network services licensee may operate (i.e. use) 'for purposes principally or integrally related to (its) operations", as stipulated in section 41(1)(a) of the principal Act, that form of private telecommunication network that is referred to as virtual private network. Such licensee, however, unlike any other person, need not to obtain a private telecommunication network licence. Telkom does not believe that there is any rational justification or need for such an exemption from obtaining the said licence exemption and if this were the intention Telkom would object to the amendment on this basis. A value-added network services licensee who needs a private telecommunication network must obtain a private telecommunication network license like any other person, and use the private telecommunication network in accordance with the licence conditions that pertain to a private telecommunication network and the provisions of sub-section (5).

However, Telkom is of the opinion that the intention of the amendment might be, and its consequences would certainly be, that the value-added network services licensees would be permitted to provide to provide virtual private networks (which it is acknowledged to be private telecommunications networks) to their customers. This would make a private telecommunication network a value-added network service, which it cannot be. This would be contrary to many provisions of the Act, to Telkom public switched telecommunication service licence and, presumably to the public switched telecommunication service licence of the SNO. Telkom therefore, strongly objects to the introduction of this amendment.

If, however, it were the intention of the legislator to in fact classify the provision of virtual private network s as value-added network services, and not as a private telecommunication network, then consistent, explicit and unambiguous provisions should be made in section 1 (definitions) and in section 40 (value-added network services) of the Act. Even then it should be noted Telkom would oppose such redefinition, as it is contrary to the nature of the service in question.

In conclusion, Telkom recommend that the proposed amendment not is made and that, since the amendment to sub-paragraph (1)(b)(i) is only required because of sub-paragraph (1)(b)(ii) that it should not be effected.

The new sub-section (10) allows separate entities (public schools and other similar entities) to be linked together by a single private telecommunication network. Telkom, however, believes that the facilities required for such networks are no different from the facilities that would be required for the provisioning of any other PTN and such networks would not differ in any material respect from any other PTN. It is accordingly of the belief that these PTN's should be provided by the public switched telecommunication service licensees. Telkom therefore suggests that paragraph (a) should be amended as follows:

The right to "construct" a network is a misnomer and of considerable concern to Telkom. In all instances where responsibility for the provision of a PTN rests with the provider of public switched telecommunication service, as would be appropriate in this instance, the responsibility for design, configuration, installation and maintenance of such facilities required for the PTN are the responsibility of the public switched telecommunication service licensee. It is only where it is explicitly stated that the PTN is to be self provided, as is the case with the Eskom and Transnet's PTNs in term of Section 41(2), that this responsibility vest in the operator of the PTN.

There is no indication that what is intended here is the licensing of PTNs, which approximates the specialised PTNs 's of Eskom and Transnet, on which mission critical safety systems are embedded on their power and transport infrastructures, respectively. Accordingly clause 10(b) which provides that "entity… shall construct and operate an educational network' should preferably be amended by the deletion of the word "construct".

The sub section makes provision for the establishment of an entity to construct and operate a private network to fulfil South Africa’s obligations in terms of three international conventions. Namely the International Convention for the Safety of Life at Sea (SOLAS) 1974/78, Annexure 12 to the Convention on International Civil Aviation and the International Convention on Maritime Search and Rescue, 1979 ((11)(a)(b)(c)).

Section 4.3.4 of Telkom’s PSTS licence, however provides that Telkom is obliged to provide Maritime Emergency Services on request of the South African signatory of the international convention for the Safety of Life at Sea. This Telkom has done. It is however not known whether what is sought to be done, in terms of section 41(11)(a), is to transfer Telkom's obligations in this regard to a yet to be formed entity. Clarity in this respect is required if there is not to be a duplication of roles with respect to SOLAS.

With respect to the right of the entity contemplated in paragraph (a) of Section 41(11) to provide the services in subsections (a), (b) and (c), Telkom submits that, with respect to subsection (b), such services must be in the nature of services whose primary concern is the assurance of life in aeronautical space. Accordingly the "Maritime and Aeronautical Radio Services" must have as their primary purpose the assurance of life at sea and in aeronautical space and not any commercial objective.

Telkom submits that should a deemed right be granted to provide the service contemplated in 41(11) then this should be limited to providing the service as an emergency service only and not be extended to the provision of a commercial telecommunication service. The facilities for the envisaged network should also be provided by the public switched telecommunication service licensees and there should be no encapsulated right to "construct" a PTN which the public switched telecommunication service licensees are capable of providing.

The amendment proposed by the Telecommunications Amendment Bill toto section 43(1) of the principal Act provides that "Any public switched telecommunication services licensee shall when requested by any other person providing telecommunication services, interconnect its telecommunication systems to the telecommunication system of the other person in accordance with the terms and conditions of an interconnection agreement entered into between the parties, unless such request is unreasonable".

The above amendment implies that a public switched telecommunication service licensee is obliged to interconnect to any entity irrespective of its legal status. Section 43(1)(a) of the Telecommunication Amendment Bill should stipulate that a public switched telecommunication service licensee shall when requested by persons licensed to provide either public switched telecommunications services or mobile cellular services, for want of a better word herein defined as licensed public operators, interconnect its telecommunication system with the system of such person. Interconnection addresses a relationship between licensed public operators of networks and it would be preferable if the Act reflected this.

Section 43(4A) contemplates a strange situation where the Authority makes a determination or proposal between parties to a dispute, but the Minister and not the Authority has the power to make such determination enforceable between the parties. Telkom recommends that the word "Authority" replace the word "Minister".

Section 43 (10)(a) provides that fives years after the date on which an interconnection agreement is concluded a party to that agreement may request the other party or parties to promptly negotiate in good faith to modify or amend some or all of the terms of such agreement.

Section 43 (7)(a) of the principal Act provides that the provisions of subsections (1) to (6) shall apply with the necessary changes, in relation to an amendment of any term or condition contemplated in this Section. This implies that parties to interconnection agreements have a right in terms of this section to effect amendments to any term of their interconnection agreement. There is also no time limitation created by this section within which parties can amend terms of the agreement.

The insertion of Section 43(10)(a) is therefore not necessary as it restates a right already contained in Section 43(7)(a). Telkom therefore suggests that Section 43(10)(a) of the Bill be deleted.

19. Amendment of section 44 of the Act

In Section 44(4) of the Telecommunications Amendment Bill "facilities leasing" and "resale", which are two different concepts are bundled together once more. Telkom refers to section 2.1 (l) of its submission, which provides an elaboration of the distinction between the two concepts. Section 44 of the principal Act refers to the "making telecommunications facilities available". This concept is in line with the concept of facilities leasing.

Telkom recommends that section 44(4) of the principal Act not be amended.

The proposed section 44(5)(b)(i) provides for guidelines addressing resale. For the reasons already adduced, Telkom is of the belief that this amendment is not appropriate.

The proposed section 44(5)(b)(ii) repeats the text of section 44(5) of the principal Act.

Telkom, therefore, recommends that section 44(5) of the principal Act not be amended.

The amendment to section 44(7) of the principal Act recognises that both the SNO and Telkom may be requested to make telecommunication facilities available to a third party. In light of the fact that the SNO will have the same rights to provide telecommunication facilities as Telkom would, any person requesting such facilities must have approached both Telkom and the SNO for the facilities in question before he or she can invoke Section 44(7). This would ensure that the person has exhausted all existing avenues as stipulated by the Act for the provision of telecommunications facilities before being granted the right by the regulator to obtain the facilities from a person other than from a provider of public switched telecommunications services.

Similarly, it would not serve any purpose to grant the Authority the power to propose terms and conditions (in accordance with section 43(a)(b) of the principal Act with respect to a failure of one of the public switched telecommunication service licensees to provide such facilities where there has been no request made to the other public switched telecommunication service licensee to provide such facilities. The correct remedy in a competitive environment is to allow a person who has been unable to obtain the facilities from any of the duly licensed providers, to obtain the facilities from other duly licensed persons.

Telkom accordingly suggests the following amendment to section 44(7)(a):

No comments.

No comments.

No comments.

Section 53A of the Bill provides for the establishment a Mediation and Arbitration Committee.

Section 33(1) of the Constitution of the Republic of South Africa Act No. 108 of 1996 provides that everyone has the right to administrative action that is lawful, reasonable and procedurally fair. Section 33(3) provides that National legislation must be enacted to give effect to the rights, and must provide for review of administrative action by a court or, where appropriate, an independent and impartial tribunal. Telkom submits that to give effect and to comply with this Section of the Constitution, a Tribunal as opposed to a Mediation and Arbitration Committee be established in terms of the Bill be established.

In terms of Section 53A of the Act the committee mandate arises when it is invoked by the Minister at the request of the Authority and any other party to an unresolved dispute. The Committee is therefore not a permanent body but an ad-hoc body created when a request is made. Telkom proposes that the body should be a permanent body, which would serve to promote consistency in the decisions it make, which will not be the case with ad-hoc bodies and would establish a body of law around such matters.

Telkom strongly recommends that the Telecommunication Act establish an independent and appellate body referred to as the "Appeals Tribunal". Telkom's motivation in support of this is:

1. the current subsection (1) gives the Minister the power to establish the committee. It also requires her to establish the committee upon a request directed to her by any of the parties to an unresolved dispute;
2. we prefer the above formulation because the Appeals Tribunal is established by the Bill itself and not by the Minister. This would obviate any delay, after the promulgation of the Bill into law, which may arise, were the Minister not to act with due expedition in establishing the Appeals Tribunal;
3. we also believe that the above formulation will ensure that the establishment of the Appeals Tribunal becomes an obligatory matter and not discretionary as is the case in subsection (1) of the Bill. The above formulation will effectively do away with the creation of the Appeals Tribunal based on the request and consent of the parties
4. the formulation will also ensure that the Appeals Tribunal is established as a permanent statutory body.

We also prefer, as a matter of nomenclature, that the body should be called the Appeals Tribunal, in order to ensure that, firstly, it is a tribunal in the ordinary sense of the word and that it is required to meet the test of independence and impartiality set forth in section 34 of the Constitution, and secondly, its main function is to deal with appeals from decisions, directions and determinations of the Authority made in terms of the Telecommunications Act.

Telkom also proposes that the chairperson shall be either Senior Counsel or other legal practitioner "with not less than ten years experience in the practice of law". This formulation gives content to the concept of "senior legal practitioner". This we believe will ensure that the qualification of a candidate is measured objectively and not through an elastic concept.

Furthermore, Telkom proposes that the appointment and removal of the members of the Appeals Tribunal is done through a selection and removal processes similar to that which led to the establishment of the council of the Authority is the same as that applicable to the tribunal. The idea is to achieve and promote consistency and uniformity in the appointment and dismissal of the members of the two bodies.

Telkom believes that that the Appeals Tribunal should have the latitude and flexibility of determining its own rules. However, we suggest that there should be a measure of public participation in regard to the rules that the Appeals Tribunal would be entitled to make in terms of subsection. Telkom proposes a process similar to that of regulation making contemplated in section 96 of the principal Act.

Telkom believes that the Act should provide for clear and unambiguous parameters of the powers of the Appeals Tribunal. The Appeals Tribunal should have both appellate jurisdiction, in respect of decisions, directions and determinations made by the Authority in terms of the Telecommunications Act, and also have jurisdiction as an adjudicative forum of the first instance in respect of specific categories of issues which may arise in relation to the interpretation, rights and obligations, privileges and scope of licences and licensing agreements governed by the Telecommunications Act.

Telkom also believes that having both forms of jurisdiction of the Appeals Tribunal will ensure that the parties involved in any dispute or disagreement, or an appeal will be obliged to refer that dispute or disagreement or appeal to the Appeals Tribunal for determination and that ordinary courts will only be involved in these issues by way of review. In this context the decisions of the Appeals Tribunal would become final and binding on the parties and may only be challenged in ordinary courts by way of review.

There is no need, in Telkom's view for the Appeals Tribunal to perform any mediation, simply because this form of dispute resolution is dependent upon the willingness and co-operation of the parties to settle their dispute or disagreement. In any event, if the parties are desirous of settling their differences by mediation, they would not be prevented from doing so.

Telkom, therefore, proposes that the following text replace the text for section 53A proposed in the Telecommunications Amendment Bill:

No comments.

No comments.

No comments.

The Telecommunication Amendment Bill amends section 66 of the principal Act by expanding the purposes for which the Universal Service Fund can be utilised.

Section 66(1)(b) already provides for the payment of subsidies to all licensees "who have obligations to provide services to areas and communities which are not served or not adequately served by telecommunication services".

Section 66(1)(f) seems to repeat this provision, which is confusing. Telkom recommends that section 66(1)(f) be deleted.

Telkom suggests that the universal service contribution should be more specifically based on the licensee's turnover from licensed activities, rather than on the overall turnover.

29. Insertion of section 67A in the Act

This section provides that the Agency may "award universal access projects by public competitive bid".

There is however no definition provided for the term "universal access projects". The Telecommunication Amendment Bill needs to define and set out criteria for such universal access projects. It is further unclear whether the Agency will be awarding the projects in question or awarding subsidies for the projects. Further whether the USA is the appropriate statutory body to adjudicate on what are, to all intents and purposes, public works projects. Telkom recommends that the section be amended as follows:

2.30 Insertion of a new Chapter X in the Act

The "new" Chapter X inserts sections 78 to 82 in the principal Act. There is no mention, however, of a repeal of the existing Chapter X (sections 78 to 87) which deal with human resources development.

Section 89(1)(b) provides that number portability shall be introduced in 2005 and that a national number portability database be created for this purpose. This implies that the legislators have determined that number portability is indeed beneficial to South Africa. Furthermore, since a "national number portability database" is contemplated, the technological option based on an Intelligent Network is to be implemented.

Telkom has discussed at length the issues surrounding the implementation of number portability when dealing with its definition. In essence, Telkom believes that a statutory imposition of number portability is not in the interest of South Africa, but that rather the Act should mandate the Authority to conduct a thorough investigation of the benefits and costs of implementing number portability in South Africa. This investigation would, by necessity, also determine the preferred technological implementation and address cost allocation and cost recovery issues.

Telkom, therefore recommends that section 89(1) of the principal Act not be amended, and that the following new sub-section (7) be added:

2.32 Insertion of sections 89A and 89B in the Act

This new section mandates the introduction of carrier pre-selection by 2005.

This facility is intended to promote competition in national long distance and international telephony, as it offers the customers of a public switched telecommunication service licensee or of a local access telecommunication service licensee the choice of alternative suppliers of long distance and international services. The Telecommunications Amendment Bill:

• does not envisage the licensing of national long distance operators before 2005;
• local access telecommunication service licensees will not be licensed to provide national long distance and international services; and
• Sentech, as a "carrier of carriers", will not be licensed to provide services to customers but only to operators.

Therefore, only the SNO will be capable of taking advantage of this facility before 2005.

The SNO, however, will be permitted to use Telkom's facilities for the first two years of operation. If during this period the SNO were also permitted to offer alternative services to Telkom's customers on the basis of preselection, there would be a very strong disincentive for the SNO to roll out telecommunication facilities to compete with Telkom for customers. The SNO would be capable to provide the more profitable national long distance and international services, without the costly investment in local access. This would be contrary to the primary objective of encouraging investment in the network and to the principle of facilities based competition.

Telkom therefore supports the provision that no form of carrier selection be introduced before 2005.

Section 89B of the Telecommunication Amendment Bill provides that the Authority may prescribe, or impose through licence conditions, as the case may be, measures in respect of directories and directory enquiry services.

Telkom’s public switched telecommunication service licence sets down Telkom’s obligations in terms of Directory Services. It is not known how both Telkom and the SNO's public switched telecommunication service licence obligations in this regard (given the equivalence in licence rights the SNO will have similar obligations with regard to Directory Services) will be affected by "the establishment of a national directory information database" (Section 89B(h)), or the purposes to which such database may be put. It should however be noted that whilst the consolidation of information contained in the directories of either public switched telecommunication service licensee may be desirable, this can easily be made a feature of either one of the public switched telecommunication service licensees' Directories. It would also be necessary to guard against unnecessary duplication and the avoidable costs that such a process would give rise to should a separate national information established database be established and maintained at the cost of the public switched telecommunication service licensees.

In the absence of clarity on these issues it is suggested that sub Section 89B(h) be amended to read "the maintenance of national directory information databases by the public switched telecommunication service licensees".

No comments.

This section of the Telecommunications Amendment Bill establishes a Telecommunication Museum and contemplates the content of the Telecommunication Museum to be transferred to such telecommunication museum. Since no mention of compensation is made this would appear to amount to expropriation.

No comments.

No comments.

APPENDIX A

LICENCE ISSUED TO TELKOM SA LIMITED TO PROVIDE TELECOMMUNICATION SERVICES UNDER SECTION 36 OF THE TELECOMMUNICATIONS ACT, 1996.

"Customer Premises Equipment" means an item of Approved Equipment which does not form part of the Public Switched Telecommunication Network but is connected, or intended to be connected, to Terminal Connection Equipment, whether fixed or portable, and by means of which signals are initially transmitted or ultimately received.

"Exchange Line" means a Local Line provided to connect a Terminal Connection Point to the Local Exchange.

"International Call" means a call (including, without limitation, any signal conveyed by means of a telecommunication system) which originates in a telecommunication system in the Republic and terminates in a telecommunication system in a country other than the Republic or vice versa or a call (including, without limitation, any signal conveyed by means of a telecommunication system) which originates and terminates in a telecommunication system in a country other than the Republic but is conveyed via a telecommunication system in the Republic.

"International Telecommunication Service" means a telecommunication service comprising the conveyance of an International Call via a Network Connection Point in the International Network, which call:

1. is received from, or sent to, the National Long-distance Telecommunication Network; or
2. is received from or sent to a Network Connection Point composed in the national long-distance telecommunication system of an Operator;

together with the installation, bringing into service, maintenance and repair of that part of the Public Switched Telecommunication Network which is provided, maintained and operated by the Licensee for the purpose of providing the relevant telecommunication service.

"Local Access Network" means the telecommunication systems which are installed or otherwise provided, maintained and operated by the Licensee for the purpose of providing the Local Access Telecommunication Service in one or more Local Exchange Areas.

"Local Access Telecommunication Service" means a telecommunication service comprising the conveyance of signals--

together with the installation, bringing into service, maintenance and repair of that part of the Public Switched Telecommunication Network which is provided, maintained and operated by the Licensee for the purpose of providing the relevant telecommunication service.

"Local Exchange" means that part of the telecommunication system comprised in the Local Access Network installed in a Local Exchange Area to provide switched Local Access Telecommunication Services to Customers connected to Local Lines comprised in that Local Exchange Area.

"Local Exchange Area" means a geographically defined area, as defined from time to time by the Licensee, within which all Exchange Lines are connected to, and served by, the same Local Exchange.

"Local Line" means a telecommunication facility in the Local Access Network comprised within a Local Exchange Area which is installed for the purposes of connecting a Terminal Connection Point to:

(a) another Terminal Connection Point in the same Local Exchange Area;

(b) the Local Exchange in that Local Exchange Area; or

(c) other elements of the Public Switched Telecommunication Network which are not comprised in the Local Access Network.

"Maritime Service" means an International Telecommunication Service consisting of two-way telecommunication (including, without limitation, manually and automatically switched voice and data services) between the International Network and seagoing vessels or other floating structures, which is compliant with the relevant Radio Regulations of the ITU.

"National Long-distance Network" means the telecommunication systems which are installed or otherwise provided, maintained and operated by the Licensee for the purpose of providing the National Long-distance Telecommunication Service.

"National Long-distance Telecommunication Service" means a telecommunication service comprising the conveyance of signals to or from--

(a) a Local Access Network;

(b) the International Network; or

(c) the telecommunication system of an Operator via a Network Connection Point in the Public Switched Telecommunication Network;

together with the installation, bringing into service, maintenance and repair of that part of the Public Switched Telecommunication Network which is provided, maintained and operated by the Licensee for the purposes of providing the relevant telecommunication service.

"Network Connection Equipment" means, in relation to any telecommunication system, an item of telecommunication apparatus comprised in that telecommunication system which is not Terminal Connection Equipment and which is used, or is meant to be used, to provide an interconnection with another telecommunication system.

"Network Connection Point" means any point within an item of Network Connection Equipment comprised in one telecommunication system at which signals are conveyed to or from a corresponding point in another item of Network Connection Equipment comprised in another telecommunication system.

"Number" means any identifier which would need to be used in connection with any telecommunication service for the purposes of establishing a connection with any Terminal Connection Point, user or telecommunication apparatus connected to any telecommunication system providing a telecommunication service, but not including any identifier which is not accessible to the generality of users of a telecommunication service.

"Numbering Plan" means a plan, which (except for the purpose of the definition of Initial Numbering Plan set forth in condition 10.1) may be prescribed by the Authority in accordance with section 89 of the Act, describing the method adopted or to be adopted for allocating and reallocating a Number to any Terminal Connection Point, user, telecommunication apparatus or particular telecommunication service.

"Operator" means any person licensed to provide a telecommunication service pursuant to a licence of a type referred to in section 34(2) of the Act.

"Private Circuit" means a telecommunication facility which provides for transmission capacity between fixed points within a telecommunication system and does not enable the Customer to control the switching functions.

"Private Telecommunication Network" means a telecommunication network licensed under section 41 of the Act.

"Public Emergency Call Service" means the services described in condition 4.3.1.

"Public Pay-telephone" means apparatus (including any kiosk, booth, acoustic hood, shelter or similar structure in which that apparatus may be installed) at which Public Pay-telephone Services are made available to the public or segments of the public, and which contains a device to accept payment for those services.

"Public Pay-telephone Service" means all or any of-

1. the installation, repair and maintenance of Public Pay-telephones;
2. the conveyance of voice telephony messages to and from Public Pay-telephones;
3. the provision of Directory Information Services from Public Pay-telephones; and
4. the provision of Public Emergency Call Services from Public Pay-telephones;

together with the installation, bringing into service, maintenance and repair of that part of the Public Switched Telecommunication Network which is provided, maintained and operated by the Licensee for the purposes of providing the relevant telecommunication service; provided, however, Public Pay-telephone Service shall not include the provision of community service telephones as contemplated in the licences issued under section 37 of the Act.

"Public Switched Telecommunication Network" means the telecommunication systems which are installed or otherwise provided, maintained and operated by the Licensee for the purpose of providing the Public Switched Telecommunication Service, including, without limitation--

(a) the Local Access Network;

(b) the National Long-distance Network; and

(c) the International Network;

by whatever means provided, including, without limitation, copper cables, wireless loops, microwave links, optical fibre cables, satellite earth stations, space segments and satellite systems, by means of which signals can be conveyed between all or any of--

(i) two or more Terminal Connection Points;

(ii) two or more Network Connection Points;

(iii) a Terminal Connection Point and a Network Connection Point;

excluding, for the avoidance of doubt, any telecommunication apparatus connected to Terminal Connection Equipment, except for Public Pay-telephones and any telecommunication system used for the purposes of providing a Mobile Telecommunication Service which is not used for providing any other telecommunication service.

"Public Switched Telecommunication Service" means all those telecommunication services as contemplated under section 78 (1) of the Post Office Act, as that section existed immediately before its repeal by the Act, including, without limitation--

(a) the National Long-distance Telecommunication Service;

(b) the International Telecommunication Service;

(c) the Local Access Telecommunication Service;

(d) the Public Pay-telephone Service;

(e) the Maritime Service;

(f) a service comprising the provision of telegrams;

(g) a service comprising supply of Customer Premises Equipment;

but excluding the provision of Mobile Telecommunication Services and Value Added Network Services.

"Terminal Connection Equipment" means, in relation to any telecommunication system, an item of telecommunication apparatus comprised in that telecommunication system which is situated in a fixed position in a Customer's premises and which enables--

"Terminal Connection Point" means any point within an item of Terminal Connection Equipment at which signals are conveyed to or from one or more items of Customer Premises Equipment.

"Under-serviced Area" means--

(a) any 'Township;

Without prejudice to the generality of the foregoing, Under-serviced Areas includes rural, suburban and urban areas which typically are inhabited by communities historically discriminated against on the basis of race.

"Wireless Local Loop" has the meaning assigned to such term in the radio regulation concerning implementation of accelerated migration within all frequency bands, adopted by the Minister on 6 May 1997.