1. Cell C is grateful for the opportunity to submit its comments to Parliament on the ICASA Amendment Bill ("the Amendment Bill"). Cell C would like to use this opportunity to furthermore express its interest in participating in any public hearing on the Amendment Bill.

 

2. We note that the Amendment Bill’s significance lies in the fact that it sets out a major revision to the framework in accordance with which regulation of the communications sector takes place. This is of particular importance at this time, as the Convergence Bill is about to be finalised. The Convergence Bill, once finalised, will undoubtedly result in an increased role and responsibilities for ICASA and thus it is in Cell C’s opinion imperative that the basis on which ICASA is to regulate in a converged world is clear and robustly set out .

 

3. The WTO Reference Paper makes provision for the establishment of "separate" regulators. The ITU defines a separate regulator as "one that is independent – in terms of finance, structure and decision-making – from the operator and the relevant government ministry.^" From an international investor perspective, Cell C draws Parliament’s attention to the fact that the extent to which the regulator is perceived to be independent of political control, and separate from operators greatly affects the level of confidence that the industry and the general public have in the regulator’s decision-making. It further affects the regulator’s capacity to make credible commitments and thus to attract investment, both foreign and local.

 

4. Investments in electronic communications networks and the services delivered through them - both by incumbents and by their competitors - are proceeding on a massive scale throughout the world. South Africa is no exception. The regulatory framework is a key determinant of the extent and efficiency of investment, which in turn dictates to a considerable extent the benefits that will accrue to end users of electronic communications services. Cell C‘s concerns with the Amendment Bill are based on our experience as an international investor with strong local participation and ownership. It is further based on Cell C’s position as a licensee in the telecommunications sector, and a late entrant in the mobile cellular market, which has frequent and significant interactions with the communications regulator, ICASA. Our position as an investor and a late entrant in the telecommunications sector and the South African economy necessitates a transparent and non-discriminatory regulatory framework, and a strong regulator in order to enable proper decision making within Cell C. This is the premise from which Cell C’s comments on the Amendment Bill are made.

 

5. Cell C’s comments relate on one level to functional independence which is generally measured through the institutional framework and the effectiveness of statutory provisions governing the appointment and removal of officials; and reporting requirements and financial autonomy. However, the institutional framework and how it relates to regulatory independence is only one aspect of the regulatory framework and Cell C is further concerned with the fact that the regulator needs to additionally make decisions in a procedurally correct, transparent, non-discriminatory manner and be accountable for such decisions. These are the characteristics that Cell C wishes to see in the ICASA Amendment Bill, and as a result Cell C’s submission is drawn with the express concern that such principles are enshrined in legislation.

 

6. Following Part I (Introduction), Cell C’s submission will therefore address the following broad topics:

• Part II: GENERAL

• "Electronic" Communications Authority of South Africa
• Objects of the Amendment Bill

• Part III: INSTITUTIONAL FRAMEWORK

• Appointment and Removal of Councillors (section 8, amendment of section 5 of ICASA Act )
• Financial Autonomy (Section 17, insertion of section 15(1)A of ICASA Act)

• Part IV: PROCEDURES (ENSURING TRANSPARENCY & NON-DISCRIMINATION)

• Conduct of Inquiries (Section 7, insertion of sections 4B and 4C of ICASA Act)
• Regulations by Authority (taken from section 4 of the Convergence Bill)
• Establishment of Complaints and Compliance Committee (Section 20, insertion of section 17A – 17H)

1. Part II: GENERAL

 

1. "Electronic" Communications Authority of South Africa

 

1. Cell C would like to indicate at the outset that it is concerned about the use of the term "electronic communications" in both the Convergence Bill and the ICASA Amendment Bill.

 

2. The Electronic Communications and Transactions Act, 2002 (No. 25 of 2002) states in the preamble that its aims, to "provide for the facilitation and regulation of electronic communications and transactions"… to promote universal access to electronic communications and transactions and the use of electronic transactions by SMMEs… and to provide for matters connected therewith." Furthermore, the objects of Electronic Communications and Transactions Act are "to enable and facilitate electronic communications and transactions in the public interest…"

1. Basically, while the ECT Act confines electronic communications to data messages, the Convergence Bill refers to all signals; the emission, transmission or reception of information, whether it is voice or data. It accordingly broadens the scope of the definition. There is a need for the alignment of the two definitions in the Convergence Bill, the Electronic Transactions Act and now in the Amendment Bill, or the amendment of one of the two definitions. In the absence of this alignment there will be two Acts supposedly addressing the same issue with differing definitions of the concept "electronic communications."

 

2. In addition to the confusion generated by the use of the term "electronic communications" in two distinct pieces of legislation, Cell C is concerned that naming ICASA the "Electronic" Communications Authority on one hand, whilst including postal regulation in its mandate, on the other hand is not only a misnomer but cause for further confusion. Postal services do not fall under the ambit of "electronic communications" as defined in either the ECT Act or the Convergence Bill, and the proposed name "ECASA" would not be truly reflective of the role and functions of the regulatory authority. Cell C proposes that the term "communications" be used instead of "electronic communications" as it would encompass, in a cohesive sense the broadcasting, telecommunications and postal sectors.

1. OBJECTS OF THE ACT (Amendment of section 2 of Act 13 of 2000)

 

1. In light of the global move towards the liberalisation of the communications industry, Cell C would like to point out that one of the principal duties of a regulator is to "further the interests of consumers in relevant markets, where appropriate, by promoting competition" Cell C therefore proposes that a similar requirement be added to the objects of the ICASA Act. The Tanzanian Communications Regulatory Authority Act of 2003 also contains the following provisions which Cell C believes should be considered for inclusion into the Amendment Bill:

• promoting effective competition and economic efficiency;
• enhancing public knowledge, awareness and understanding of the regulated sectors;
• taking into account the need to protect and preserve the environment.

1. It is accordingly proposed that section 3 of the Amendment Bill be amended to read as follows:

3. The object of this Act is to establish an independent authority which is to –

1. Part III: INSTITUTIONAL FRAMEWORK

 

1. Appointment & Removal of Councillors (Section 8, amendment of section 5 of ICASA Act )

 

1. Cell C notes the increase in the size of the Council from 7 (seven) to 9 (nine) members, and assumes that this is due to the additional workload required due to the addition of postal functions, and the resource requirements of the Convergence Bill.

 

2. Cell C notes that the appointment process has been changed from a Parliamentary process, wherein nominations are accepted from the public and the final decision made by the President, to one wherein the Minister makes the recommendation to the President based on a recommendation from an ad hoc panel that s/he has appointed. Cell C is concerned that the process proposed in the Amendment Bill blurs the separation of powers "from the relevant government ministry" that is discussed in the ITU definition of independence cited above. Although in Cell C’s view the appointment of an "independent and impartial" panel by the Minister does create a certain separation, it does not, in our opinion go far enough to ensure the separation of powers. It is furthermore not clear to Cell C why the present manner of appointing Councillors is considered flawed and in need of change.

 

3. Finally, with respect to the amendment of section 8 of the ICASA Act, Cell C notes with concern that subsections (2) and (3) have been deleted from section 12. Subsections (2) and (3) provide a clear framework in terms of which a Councillor may be removed from office. The deletion of these two provisions removes the clarity which previously existed with respect to who may make the decision whether to remove a Councillor from office. It is therefore submitted that section 8(2) and 8(3) of the ICASA Act be retained in order to ensure that section 12 can in fact be implemented.

2. Funding (Section 17, Insertion of section 15(1)A of ICASA Act)

 

1. Cell C notes that the Amendment Bill inserts s15(1)A which states that "The Authority may receive money determined in any other manner as may be agreed between the Minister and the Minister of Finance and approved by Cabinet." Cell C welcomes the expansion of the sources from which ICASA can obtain financing. Cell C further supports the principle that government, through the relevant Ministers, should ensure that the Authority use such additional finances appropriately and can thus justify such additional finances.

 

2. Notwithstanding the above, Cell C is however concerned that section 15(1) A, as drafted, is vague in that it does not address or outline the sources of such financing. It accordingly does not provide sufficient security that the Authority will be able to timeously secure sufficient funding as would allow it to take on the responsibilities set out in the Convergence Bill or that such appropriations will be legally defensible.

 

3. In Cell C’s view, certainty of funding is a key element of the institutional framework of an effective regulator, in particular in light of the increased responsibilities of ICASA in terms of the Convergence Bill. It would therefore be advisable rather than leave the provision vague and defer the funding decisions to a later stage, to provide a transparent framework for the terms on which additional or alternative funding can be provided.

 

4. The Malaysian model in this regard is instructive and is set out in the Malaysian Communications and Multimedia Commission Act 1998 / Act 589. The Malaysian framework allows the regulator to source funding from sources other than Parliament, including all or part of license fees, administration charges, levies or other charges imposed by or payable to the Commission under the communications and multimedia laws; moneys derived as income from investments, the sale, disposal, lease or hire of, or any other dealing with, any property, mortgages, charges or debentures vested in or acquired by the Commission; all moneys earned from consultancy and advisory services and any other service provided by the Commission; and all other moneys lawfully received by the Commission, including interest.

 

5. However, in Malaysia, before obtaining these funds, the regulator must motivate for the use of such funds to the Minister justifying proposed expenditure and the preparation of estimates. Cell C has taken the principles supported by the Malaysian Act and using language relevant to the South African scenario makes the following proposal:

S15(1)A The Authority may receive money determined in any other manner as may be agreed between the Minister and the Minister of Finance and approved by Cabinet, including from:

1. The above-mentioned proposal seeks to marry the current appropriation process with one in which monies are obtained from sources other than Parliamentary appropriation (through the Ministry of Communications). This would grant ICASA greater financial security while ensuring that the appropriate checks and balances are put in place. Cell C notes that, as per Annexure A, other regulators in South Africa, namely the Civil Aviation Authority, the Competition Commission and the National Energy regulator, are funded in part by monies collected from the industries that they regulate.

 

2. In terms of section 81 of the Convergence Bill the Authority shall prescribe regulations determining the manner in which licensees are required to make contributions to the Universal Service and Access Funds. Such contributions shall be allocated to the Universal Service Agency by Parliament based on the budget of the Universal Service Agency for specified universal service and access projects. Cell C accordingly believes that the Authority should determine the contribution to the Universal Service Fund, based on the responsible, effective, efficient, economical and transparent use of resources by the Universal Service Agency.

 

3. In line with Cell C’s proposal regarding the Authority’s determination of contributions to the Universal Service Fund, the same principles should be applied in determining license and spectrum license fees. Cell C therefore proposes the addition of section 15(4)(B)

1. PART IV: PROCEDURES

 

1. Functions of the Authority and Chairperson (Substitution of section 4 of ICASA Act)

 

1. Cell C welcomes the inclusion of a thorough list of functions for the Authority and Chairperson in the Amendment Bill as it believes that it is imperative that a creature of statute has a clear mandate. It should however be noted that it would be to the advantage of the industry if there were to be a requirement that ICASA regulate with a clearly articulated and publicly reviewable annual plan, with stated policy objectives. This would allow for proper planning by both ICASA and the industry. It is an axiom that regulatory certainty has a positive effect on investment and uncertainty negatively impacts on efficient planning and resource utilisation. It is therefore proposed that ICASA publish an annual plan to guide the Authority, government and the industry, and that this requirement be added to the list of stated functions in section 6 of the Amendment Bill.

 

2. The addition of this provision would not be unique to South Africa, as it is a model followed by, amongst others Ofcom (the United Kingdom’s regulator of Communications Services) which produces an annual plan; and the Canadian Radio-television and Telecommunications Commission (CRTC) which publishes a three year work plan that provides a detailed overview of the schedule of activities the Commission has planned over the three year period to fulfil its mandates under the Broadcasting Act and the Telecommunications Act. The CRTC plan is a three year plan, which is reviewed annually.

 

3. In line with Cell C’s proposal regarding the establishment of a Complaints and Compliance Committee in terms of section 17 of the Amendment Bill, as will be discussed in greater detail below, Cell C also proposes that the Authority be mandated to not only monitor compliance as set out in section 4(3)(b), but also to investigate and evaluate alleged contraventions of the Amendment Act and underlying statutes.

 

4. It is noted that there is a global move to regulate with a bias against intervention and "regulatory creep." This does not however obviate the need to regulate with a willingness to intervene firmly, promptly and effectively where required. This approach has been proven to strengthen investor confidence in a market. Cell C therefore proposes that ICASA should aim to always seek the least intrusive regulatory mechanisms to achieve its policy objectives.

 

5. Sound research is the basis for good regulatory policy. Cell C submits that ICASA must be required to conduct research on all matters affecting the postal and communications sectors in order to exercise and perform its duties in an informed manner. It is therefore proposed that subsection (h) be amended to direct ICASA to conduct research.

 

6. Of extreme importance to Cell C is that ICASA must act at all times within the parameters of administrative justice. The importance of due process can therefore not be over-emphasised. It is proposed that a provision be added to the functions of the Authority that requires the Authority to consult affected stakeholders in performing any function in terms of this Act.

 

7. Cell C also believes that ICASA should be sufficiently empowered to investigate and evaluate communication network providers, communication service providers and broadcasters to ensure compliance to licenses and regulations, and to endorse and enforce findings of the Complaints and Compliance Committee (which is discussed in more detail in Cell C’s comments on section 17). Although section 17 sets out the framework for the Complaints and Compliance Committee, the ability to endorse and enforce its findings should be set out in ICASA’s functions for the sake of clarity.

 

8. The Authority should furthermore be able to impose penalties and other sanctions in line with section 17E of the Amendment Bill and the relevant provisions of the Convergence Bill. Cell C has therefore made proposals with respect to ICASA’s functions in the redrafted clauses hereunder which it believes will sufficiently empower ICASA.

 

9. Lastly, consideration should be given to instances where jurisdiction is shared between ICASA and other regulatory authorities. It is therefore proposed that the level of overlap of functions should be managed by agreements to be concluded between the regulators that share jurisdiction.

 

10. In light of the above it is proposed that section 6, dealing with the functions of ICASA and its Chairperson, be amended as follows:

Section 6: Functions of Authority and Chairperson

6. (1) The Authority –

(a) must exercise the powers and perform the duties conferred and imposed upon [the former authorities by or under] it by this Act, all underlying statues and by any other law;

[(b) may exercise the powers conferred upon the former authorities by or under the underlying statutes;]

(b) in so far as its powers and duties conferred and imposed upon it by this Act falls within the functions of another regulator, this Act must be construed as establishing concurrent jurisdiction, to be managed, to the extent possible in accordance with any applicable agreement.

(c) subject to section 231 of the Constitution, must act in a manner that is consistent with the obligations of the Republic under any applicable international agreement.

(2) The Authority is subject to the Public Finance Management Act, 1999(Act No. 1 of 1999).

(3) Without derogating from the generality of subsection (1), the Authority –

(aA) must regulate in terms of a clearly articulated and publicly reviewed published annual plan, with stated policy objectives.

(aB) must seek the least intrusive regulatory mechanisms to achieve its policy objectives

(a) may make recommendations to the Minister on policy matters and amendments to this Act and the underlying statutes which according with the objects of this Act and the underlying statutes seek to promote development in the postal and communications sectors;

(bA) may make regulations with regard to any matter in which may be prescribed in terms of this Act or the related legislation, in accordance with applicable processes;

(b) must monitor the postal and communications sectors to ensure compliance with this Act and the underlying statutes;

(bA) must appoint inspectors to investigate and evaluate alleged contravention’s of the Act and underlying statutes by any party;

(bC) may settle with any party that has admitted to contravening the Act and underlying statutes, before the legal process has been finalised;

(bD) may fine or penalise any person who contravenes or fails to comply with this Act or related legislation;

….

(gA) may summon and enforce attendance of any person to the Complaints and Compliance Committee/Communications and/ or Tribunal;

(gB) may require the discovery and production of documents;

(h) [may] must conduct research on all matters affecting the postal and communications sectors in order to exercise its powers and perform its duties…;

 

Insertion of sections 4A, 4B, 4C and 4D in Act 13 of 2000

 

2. Register of licences (Section 4A)

 

1. The efficient management of documents and correspondence, by a regulator is of utmost importance for effective regulation of an industry. Cell C therefore welcomes the addition of a provision to register licences, particularly in light of ICASA’s increased licensing role under the Convergence Bill. However, Cell C proposes that in the interests of transparency and proper access to information by participants in the sector, ICASA should not only have to register licences, but the Amendment Bill should go one step further and ICASA should be required to register all documents and set out a framework for accessing them. ICASA should, like the Competition Commission, have a "Registry Office," which is the central point at which documents are received, stamped and scanned in order to ensure that no information gets lost. With the increased mandate of ICASA, to also deal with postal matters, Cell C believes that such a system would be very effective. It is therefore proposed that ICASA keep a register of all notifications, licences, spectrum allocations, and complaints, which should be available at all times for public inspection, and may use its library for such purposes. ICASA should furthermore make regulations setting out the procedure for delivering, issuing and accessing documents.

 

2. The above-mentioned proposal is consistent with the provisions of the Convergence Bill. An amendment to section 4A(1) to effect the above proposal is set out below:

1. licences granted and amended in terms of this Act and underlying statutes;
2. any transfer of such licenses;
3. notifications by licence exempt communication network and communication service providers;
4. spectrum assignments made by the Authority;
5. interconnection agreements and facilities leasing agreements;
6. complaints and findings against licensed and licence exempt communication networks licensees, communication network service licensees and broadcasting service licensees; and
7. any other documents that should be made available in the public interest.

1. Inquiries by Authority (Section 4B)

 

1. It is noted with concern that the Authority will have very limited powers in terms of subsection 4B of the Amendment Bill which deals with enquiries. Cell C believes that the scope of ICASA enquiries should be broadened and that the Authority should have the ability to conduct enquiries into any matter, and not just "for the purpose of improving the performance of its functions."

 

2. It is accordingly proposed that the Authority should be allowed to conduct a general enquiry regarding compliance with the Convergence Bill and underlying statutes; however ICASA should not be allowed to conduct a hearing regarding any specific alleged contravention by regulated parties – this function should be reserved for the Complaints and Compliance Committee and /or Communications Tribunal. To this end Cell C would like to refer to its suggestions in terms of section 17 wherein the Complaints & Compliance Committee and/ or Communications Tribunal should be the adjudicator regarding alleged contraventions of the Act and underlying statutes. Section 4B(1)(d) which allows for ICASA to conduct an enquiry into licence-related compliance matters is problematic and Cell C proposes that it should be deleted.

 

3. It is accordingly proposed that section 4B(1) be amended as follows:

1. the achievement of the objects of this Act or the underlying statutes;
2. regulations and guidelines made in terms of this Act or the underlying statutes;
3. compliance by applicable persons, as a sub-sector, with this Act and underlying statutes;
4. compliance with the terms and condition of any licence by the holder of such licence issued pursuant to the underlying statutes.

1. Conduct of inquiries

 

1. Cell C supports the provisions in section 4C in so far as they set out the conduct of inquiries by the Authority.

 

2. Cell C is however concerned with section 4C(7) which states that the findings contemplated in section 4C(6) are enforceable and binding on all licensees and other stakeholders in the postal and communications sectors to the extent that such findings are applicable to regulated activities. Cell C is of the opinion that this provision should be qualified as it may extend the application of ICASA decisions beyond their legislated ambit.

 

3. It is accordingly submitted that ICASA should have two broad options after finalising a public enquiry:

 

1. It should publish its findings and, based on its findings, draft regulations, should the inquiry indicate such a need. This is currently provided for in terms of section 27 of the Telecommunications Act.

 

2. Should the inquiry have been instituted to clarify and /or provide guidance on the application of existing regulations, ICASA’s findings will be binding to the extent to which they, clarify or provide such guidance. Currently, in the telecommunications regulatory framework, this is not possible. ICASA cannot enforce a finding except through regulation as provided for in paragraph 4.4.3.1. This is problematic as sometimes the enquiry seeks to clarify aspects of the regulatory framework and not to make regulations. Without the power to make declaratory orders, the result has been that ICASA has in the past reached findings which have been considered unenforceable, being beyond the scope of its powers.

 

3. Cell C proposes the following amendment to section 4C(7) to address the above-mentioned concerns:

 

Conduct of enquiries

 

(7) The findings contemplated in subsection (6) are enforceable and binding on all licensees and other stakeholders in the postal and communications sectors to the extent that such findings are [applicable] relate to the application and interpretation of existing regulations. [their regulated activities.]

 

2. Section 4 of the Convergence Bill: Regulations by Authority

 

1. Cell C notes that Section 4 of the Convergence Bill which deals with regulation-making, was, during the Convergence Bill deliberations held in abeyance pending the finalisation of the ICASA Amendment Act. Cell C therefore feels that it is appropriate to comment on this issue. It appears that the drafters intended the ICASA Amendment Bill to address all procedural matters, and the Convergence Bill to address substantive matters. Although Cell C believes that best practice would indicate that all the procedural and substantive matters should be in the Convergence Bill, if this approach is to be followed, section 4 of the Convergence Bill on regulation-making should be moved to the Amendment Bill. Of concern to Cell C, irrespective of where the regulation-making procedure is located is how enquires are conducted – transparency in decision making and due process is key to a successful undertaking in this regard.
2. Cell C supports the provisions contained in section 4 of the Convergence Bill on regulation-making and applauds the level of independence afforded to the Authority in giving it the ability to make and promulgate its own regulations. The notification process which provides that ICASA must notify the Minister section 4(5) constitutes the act of advising the Minister and not seeking the Minister’s approval. Cell C supports this approach.
3. Cell C is however concerned that section 4(1) provides that the Authority may make regulations with regard to any matter which in terms of this Act or the related legislation must be prescribed, governed or determined by regulation. This provision is extremely broad particularly in an instance such as this where there is no reference or any indication as to legislation which may be considered to be "related" to the Convergence Bill. It is also contrary to administrative law for Parliament to delegate authority in a Bill to make policy in terms of another Bill. Such delegation must be contained in the specific Bill/Act in terms of which the policy is made.
4. Section 4(7)(b) provides that the Authority need not declare its intention to make regulations, nor invite written representations on regulations where the "public interest" requires that such regulation should be made without delay. Although Cell C recognises that this provision is taken from the Telecommunications Act, it is again extremely broad and would allow the Authority to make regulations without comment or input from interested parties as long as it can justify that the "public interest requires the regulations be made without delay." As ICASA was established to regulate all matters in the public interest satisfying this condition should not prove an insurmountable hurdle. Cell C therefore proposes that this provision should only apply in exceptional circumstances and then only in instances where intervention in the "national interest" and not "public interest" is called for.

 

3. Confidential information

 

1. In line with Cell C’s submission relating to ICASA’s mandate to monitor and investigate compliance by the industry with the Act and underlying statutes, it is submitted that both the Authority and the Complaints and Compliance Committee and/or Tribunal must be subject to the provisions contained in section 4D relating to confidential information.

 

2. It is furthermore submitted that ICASA and the Complaints and Compliance Committee and/or Tribunal may in performing their functions, take confidential information into account in making decisions. If the reasons for their decisions would reveal any confidential information, ICASA or the Communications Tribunal must provide a copy of the proposed reasons to the party concerned at least 10 days before publishing these reasons. A party should have the right to apply to ICASA or the Complaints and Compliance Committee and/or Tribunal for an appropriate order to protect the confidentiality of the relevant information. Cell C accordingly proposes that section 4D be amended as follows:

Confidential information

---

4D (1)(a) When a person submits information to the Authority or the Communications Tribunal/Complaints and Compliance Committee, such person may request that specific information be treated as confidential information.

(b) The request for confidentiality must be accompanied by a written statement explaining why the specific information should be treated as confidential.

(2) Within 14 days of receiving a request for confidentiality, the Authority or the Communications Tribunal/Complaints and Compliance Committee must make a determination whether or not confidentiality will be granted and provide the person contemplated in subsection (1) with written reasons for such determination.

(3) Should the Authority or the Communications Tribunal/ Complaints and Compliance Committee determine that a request for confidentiality cannot be acceded to, the party providing the information must be given an opportunity to withdraw the information that is the subject of the confidentiality request.

(4) When considering a request contemplated in subsection (1), the Authority or the Communications Tribunal/ Complaints and Compliance Committee must treat the following information as confidential information namely:

(a) Trade secrets of such person;

(b) financial, commercial, scientific or technical information, other than trade secrets, the disclosure of which is likely to cause harm to the commercial or financial interests of such person;

(c) information of which the disclosure could reasonably be expected –

(i) to put the person at a disadvantage in contractual or other negotiations; or

(ii) to prejudice the person in commercial competition;

(d) the names of prospective employees; and

(e) business plans of a licensee.

(5) A determination of confidentiality may not be made in respect of a document or information that is in the public domain or is required to be disclosed by operation of law or a court order.

(6)(a) When making any decision in terms of this Act or underlying statutes, the Authority and the Communications Tribunal/ Complaints and Compliance Committee, may take confidential information into account in making a decision.

(b) If the Authority or Communication Tribunal/ Complaints and Compliance Committee’s, reasons for the decision would reveal any confidential information, the party concerned must be provided with a copy of the proposed reasons, at least 10 business days before publication of the reasons;

(c) A party may apply to the Authority or the Communications Tribunal/Complaints and Compliance Committee, after receiving a copy of the proposed reasons, for an appropriate order to protect the confidentiality of the relevant information.

 

4. Complaints and Compliance Committee (Section 20, insertion of section 17A – 17H)

 

1. Section 20 of Amendment Bill provides that the Authority must establish a Complaints and Compliance Committee ("the Committee"). Essentially the Committee is required to investigate (through inspectors appointed by the Authority), hear and make findings on:

• Matters referred to it by the Authority;
• Complaints received; and
• All allegations of non-compliance with the ICASA Act and underlying statutes.

1. The Committee having made a finding based on a hearing must recommend to the Authority what action should be taken against a licensee.

 

2. The precedent for the establishment of the Committee is clearly the Broadcasting Monitoring and Complaints Committee (BMCC), established in terms of the Independent Broadcasting Authority Act 153 of 1993 ("the IBA Act"). The latter committee was established to monitor compliance by broadcasting licensees with their respective licenses and the IBA Act. The scope of the committee, and the findings it was able to make were limited. Cell C is of the opinion that the constitution of a similar committee to investigate, hear and make findings on non-compliance in a converged communications sector is inappropriate.

 

3. The converged communications sector will invariably be a vastly more complicated sector awash with competing and sometimes irreconcilable interests. The capital investment and revenue generated by the communications sector and the impact of non-compliance with license provisions and underlying legislation requires a far more robust adjudication body and adjudication procedures. Such adjudication body and procedures should result in the powers of the various bodies being clearly separated and the assertion of the adjudicating body’s independence.

 

4. In the Amendment Bill, there is no separation of the powers granted to the Authority, the Committee and the Inspectors. Effectively the Authority acts as the "judge, jury and executioner." The Authority appoints the Committee and the Inspectors. Both the Inspectors and the Committee have investigative powers and the Committee is empowered to make findings and recommendations to the Authority.

 

5. The Amendment Bill provides that although the Committee may investigate a matter and then presides over the formal hearing on the same matter, its findings are merely recommendations to the Authority. The Authority must take all matters into account when making a decision, including the Committee’s recommendation but there is no requirement that the Authority follow the Committee’s recommendation.

 

6. Ideally, in Cell C’s opinion, the Committee should be appointed by a third party, namely the President, based on recommendations made by the Minister, in this case the Minister of Communications. In our opinion, the complaint process should unfold in the following manner:

• The Authority receives a complaint and/or allegation of non-compliance with license provisions or underlying legislation.

• The Inspectors, appointed by the Authority should investigate the allegation and non-compliance and present their findings in person before the Committee.

• Any person may present its complaints or allegations to the Committee, should their complaint not be supported by the Authority.

• The Committee should be independent and in a position to hear complaints and matters of non-compliance and make findings which are final and binding on licensees or other parties to the hearing. There should be no referral back to the Authority.

1. A further consideration, in Cell C’s view, is that the Authority will be the party responsible for any administrative action to be taken and as such should give a party, which would be prejudiced by such action, reasonable opportunity to be heard. The party (the Authority in this instance) that presides over the hearing of a complaint or matter should be the party that makes the finding and decision in respect of such hearing, failing which the litigating parties will not have not been given an opportunity to be heard as is required by administrative law.

 

2. Ideally, the adjudication body and procedure, as described above, should take the form of a Tribunal.. The provisions of the Competition Act in so far as the establishment of the Communication Tribunal is concerned are a useful precedent and may subject to certain amendments be adopted. A draft of the suggested sections for inclusion is attached hereto as Annexure B.

 

3. Should Parliament be inclined towards establishing a Complaints and Compliance Committee, Cell C would suggest the changes and amendments to the current wording of the Amendment Bill listed below. Such changes and amendments will be of assistance in alleviating some of the problems in the Amendment Bill that we have alluded to above.

 

4. Cell C notes that there is currently no provision for the Complaints and Compliance Committee to deal with matters on an urgent basis. Cell C believes that any person should at any time be able to apply to the Complaints and Compliance Committee for an interim order in respect of an alleged practice. The Complaints and Compliance Committee in any decision taken on such matter, must base its decision on the urgency of the matter, the possibility of serious or irreparable damage to the complainant taking the balance of convenience into consideration.

 

5. Cell C believes that it is of utmost importance that the Amendment Bill contain as provision allowing any user or undertaking to appeal against any decision by the Authority. Although the current practice is that parties may appeal to the High Court, it is submitted that an independent tribunal familiar with the communications industry, would be a more suitable body. It is furthermore not a foreign concept in South Africa – the Competition Appeal Court and the Water Tribunal are good examples. Cell C accordingly proposes that an independent appeal body be established. Internationally, the concept has been adopted by Europe's decision-making bodies, and regulators, such as the Telecommunications Regulatory Authority of India (TRAI) whose governing legislation has been amended as would allow any user or undertaking providing electronic communications networks or services the right of appeal to an independent appeal body in the event of any disputes with a national regulatory authority

 

Section 17A: Establishment of Complaints & Compliance Committee

 

6. In the absence of a Communications Tribunal Cell C would support the establishment of a Complaints and Compliance Committee, as it believes that it would make the functioning of the Authority more effective and efficient. It is however important to ensure that the members of the Complaints and Compliance Committee are in a manner similar to the Councillors of the Authority, not involved in any matter wherein there may be a conflict of interest. It is therefore proposed that a provision to that effect be added as section 17A(A). It is also noted that there is no specific provision dealing with the remuneration of members of the Complaints and Compliance Committee and Cell C therefore proposes the addition of section 17A(B), as follows:

 

Disclosure of conflicts of interest by members of the Complaints and Compliance Committee

 

(17AA)(1) A member of the Complaints and Compliance Committee must disclose any conflict of interest in any matter in which the member is participating and that is heard before the Committee.

(2) If, during a hearing, it appears to a member of the Communication Tribunal/ Complaints and Compliance Committee that a matter concerns a financial or other interest of that member, the member must –

(a) immediately and fully disclose the fact and nature of that interest to the

Chairperson and to the presiding member at that hearing; and

(b) withdraw from any further involvement in that hearing.

 

 

Section 17A(B)

Remuneration and benefits of members of the Complaints and Compliance Committee

(1) The Minister may, in consultation with the Minister of Finance, determine the remuneration, allowances, and other benefits of the Chairperson, Deputy Chairperson and other members of the Communication Tribunal/ Complaints and Compliance Committee 

(2) The Minister may not during the term of office of a member of the Communication Tribunal/ Complaints and Compliance Committee, reduce the member's salary, allowances or benefits

(3) The Minister may determine any other conditions of appointment not provided for in this section

 

Section 17B: Functions of Complaints and Compliance Committee

 

7. The Committee should not be empowered to investigate complaints and non-compliance but merely hear such matters and make findings on them. This will ensure the separation of the investigation and adjudication functions.

 

8. The Committee’s role and authority should be limited to adjudicating in hearings and making findings on complaints and non-compliance and should not be extended to making recommendations to the Authority on its performance and achieving the objects of this Act or underlying statutes.

 

17B The Complaints and Compliance Committee –

(a) Must, through inspectors appointed by the Authority, investigate, hear and make a

findings on –

(i)All matters referred to it by the Authority;

(ii)All complaints received by it; and

(iii)All complaints and allegations of non-compliance with this Act or underlying statutes by

licensees, licensed in terms of the underlying statutes, received by it; and

(aA) Must make any ruling or order necessary or incidental to the performance of its

functions in terms of this Act.

(aB) May consider an application by any person , at any time, whether or not a hearing has

commenced for an interim order in respect of an alleged contravention,

(i) giving a respondent a reasonable opportunity to be heard, and having regard to the

urgency of proceedings; and

(ii) may grant an interim order if it is reasonable and just to do so, having regard to the

evidence relating to a contravention, the need to prevent serious or irreparable damage to the

complainant; and the balance of convenience.

(b) May make any recommendation to the Authority necessary or incidental to –

(i)the performance of the functions of the Authority in terms of this Act or the

underlying statutes; or

. (ii)Achieving the objects of this Act and the underlying statutes.

 

Section 17C: Procedure of Complaints and Compliance Committee

 

9. As stated above, Cell C believes that there should be a clear separation between investigative and adjudicative functions. It therefore proposes that rather than combine the investigative and adjudicative function in section 17C(2) and 17C(3), section 17C should be divided into two separate sections, as set out below.

 

10. Cell C also notes that there is no procedure provided for interested persons to participate in a hearing. Cell C therefore proposes the addition of section 17C(B). To alleviate Cell C’s concern that there should, throughout the Amendment Bill, be due process and transparent procedures, we have therefore proposed the inclusion of a clause which makes provision for a public process, where required.

[Procedure of Complaints and Compliance Committee] Initiating a Complaint

(1) (a) A person who has reason to believe that a licensee is guilty of any non-compliance with the terms and conditions of its licence or with this Act or the underlying statutes may lodge a complaint with the Authority [within 60 days of becoming aware of the alleged non-compliance].

(b) The Authority must direct the complaint to [the Complaints and Compliance Committee] an inspector for [consideration] investigation and evaluation.

(2A) The Authority may initiate a complaint against any person it believes is guilty of any non-compliance with the terms and conditions of its licence of this Act or the underlying statutes.

(2) [Before the Complaints and Compliance committee hears a matter it must] The inspector must within 14 days of receiving the complaint:

(3) – 7(c))…

 

Section 17C(B)

Right to participate in a hearing

(1) The following persons may participate in a hearing, in person or through a representative, and may put questions to witnesses and inspect any books, documents or items presented at the hearing:

(a) the Authority, or any person appointed by the Authority;

(b) the complainant, if—

(i) the complainant referred the complaint to the Communication Tribunal/ Complaints

and Compliance Committee; or

(ii) in the opinion of the presiding member of the Communication Tribunal/ Complaints and Compliance Committee, the complainant’s interest is not adequately represented by such participant, and then only to the extent required for the complainant’s interest to be adequately represented;

(c) the respondent; and

(d) any other person who has a material interest in the hearing, unless, in the opinion of the presiding member of the Communication Tribunal/ Complaints and Compliance Committee, that interest is adequately represented by another participant, but only to the extent required for the complainant's interest to be adequately represented;

 

Section 17D (3) : Findings by Complaints and Compliance Committee

 

11. The requirement that the Authority make a decision based on the Committee’s findings should be included in the correct section being 17E and deleted from section 17D which deals with findings by the Committee.

Section 17D(3)

The Complaints and Compliance Committee must submit its findings and recommendations contemplated in subsections (1) and (2) and a record of its proceedings to the Authority within 90 days from the date of the conclusion of a hearing contemplated in section 17B for a decision regarding the action to be taken by the Authority.

Section 17E: Decision by Authority

 

12. In terms of the Amendment Bill, where the Authority investigates the non-compliance and/or a complaint against a licensee, it is empowered to make orders based on the Committee’s findings and all other relevant matters. The Authority also appoints the Committee.

 

13. Clearly, if the Amendment Bill is promulgated in its present state, this would creates a situation where it would be difficult for the Authority in making an order to act impartially or independently. The Authority, in terms of the process that has been proposed in the Amendment Bill, would not have been the adjudicator during the hearing when the licensee was given an opportunity to be heard, in fact it is likely that the Authority will not have been a party to the hearing. In the circumstances, the Authority’s power to make orders would need to be severely curtailed, in line with the provisions of the IBA Act and the mandate of the Broadcasting Monitoring and Complaints’ Committee.

Section 17E

17E(1) Within 30 days of receipt of a finding of the Complaints and compliance Committee, as provided for in section 17D, the Authority shall make any one or more of the following orders, namely –

(a) Directing the licensee to desist from any further non-compliance or non-adherence;

(b) Directing the licensee to publish such finding at his or her own cost and in the manner required by the Authority;

(c) Directing the licensee to pay, as a fine, the amount prescribed in respect of such non-compliance or non adherence;

(d) Directing the licensee to take such remedial and other steps as may be determined by the Authority;

(e) Prohibiting the licensee from carrying the provision of the relevant licensed service in terms of its license a period of time, subject to a maximum period of 30 days;

(f) If satisfied that the non-compliance or non-adherence to which such finding relates, constitutes and offence, make an order that the record of the Complaints and Compliance Committee and its findings and recommendations be referred to the National Prosecuting Authority with a view to instituting criminal proceedings.

(2)When making a decision contemplated in section 17DE(1), the Authority must take all relevant matters into account, including –

(a)The nature and gravity of the non-compliance;

(b)The consequences of the non-compliance;

(c)The circumstances under which the non-compliance occurred;

(d)The steps taken by the licensee to remedy the complaint;

(e)The steps taken by the licensee to ensure that similar complaints will not be lodged in the future; and

(f)The recommendations of the Complaints and Compliance Committee.

(3) The Authority must make a decision permitted by this Act or underlying statutes and provide persons affected by such an order or decision made in terms of section 17E(1) with written reasons therefore.

 

 

14. Cell C notes that the enforcement powers of the Authority are not explicit. Where the Authority makes a finding or order, capacity to enforce such order is not set out. Cell C therefore proposes a provision, similar to section 64(1) of the Competition Act, which states:

 

Section 17E(4)

17E (4) Any finding or order by the Authority may be served, executed and enforced as if it were an order of the High Court.

Section 17F: Inspectors

 

15. Cell C supports the appointment of inspectors to monitor compliance by all parties subject to the provisions of this Act and underlying statutes, as well as the function of investigating alleged contraventions of the Act and underlying statutes.

 

16. Cell C however believes that an inspector should be allowed, additionally, to negotiate with parties that are not in compliance with the Act or underlying legislation, should the party acknowledge an act or an omission on its part. A proposed settlement with the party should be presented by the investigator to the Authority for consideration. This is a model followed in South Africa competition legislation and helps ensure that the industry is efficiently regulated; it would not be necessary to use the Authority’s resources unnecessarily and inefficiently by referring all such cases to adjudication.

Inspectors

(5A) An inspector may negotiate settlements with any party that has admitted to contravening the Act and underlying statutes, and refer such settlement to the Authority for consideration before referring the matter to the Complaints and Compliance Committee.

 

Section 17G: Power of inspector to enter, search, and seize

 

17. Cell C believes that the provisions contained in section 17G greatly empower the Authority and, provided that it is used in a responsible manner, these provisions could be utilised positively to better regulate the industry.

Cell C thanks the Portfolio Committee on Communications for the opportunity to contribute to the process of finalising the ICASA amendment Bill. The Amendment Bill is key to ensuring that the regulatory framework is built on a solid foundation, and that the regulator is well equipped to facilitate the growth of the communications sector, which in turn is critical to socio-economic development in South Africa. The Amendment Bill, and the provisions in it relating to the establishment of the regulator and the regulatory framework, are key to providing both international and local investors, with the necessary confidence in the stability, predictability and of impartial treatment in the South African environment. Hence, Cell C’s focus in its submission on the institutional framework and on procedure.

We trust that our comments prove useful and are available to elaborate them, should the Committee so request. We further would appreciate the opportunity to make an oral submission should public hearings be held on the Amendment Bill.