TELKOM’S COMMENTS TO THE PORTFOLIO COMMUNICATIONS ON THE INDEPENDENT AUTHORITY OF SOUTH AFRICA AMENDMENT BILL

Telkom SA Limited ("Telkom") wishes to express its appreciation to the Portfolio Committee on Communications (the Committee) for the opportunity to offer its comments on the Independent Communications Authority of South Africa Amendment Bill (the "Bill").

Telkom is cognisant of the importance of developing appropriate legislation to better define the functions and powers of ICASA in the context of a converged communications environment and the new legislative framework that Parliament is considering in support of such environment. Telkom, therefore, supports the proposed legislation and appreciates the opportunity to contribute in its development.

Telkom's comments on the Bill are divided in two parts: the first part addresses the primary provisions of the Bill in general terms; the second part offers, where appropriate, comments, suggestions or proposed amendments for each Section of the Bill.

GENERAL COMMENTS

Telkom supports the purpose of the Bill to determine in greater detail the functions and powers of the Authority and provide a broader scope to its financing. Telkom also believes that the establishment of the Complaints and Compliance Committee, in conjunction with the establishment of inspectors with the necessary powers to assist it, is a positive development that will provide certainty to stakeholders, which is critical to the orderly development of a converged communications market.

Nevertheless, Telkom deems it necessary to point out to the Committee certain concerns that it has on some aspects of the Bill, where either the purpose of certain provisions and/or the consequences thereof are not clear, or where certain provisions in the Bill may be in conflict with other provisions therein. Primary among these are:

• The provisions relating to inquiries by the Authority (Section 4B). Telkom fully agrees that the Authority should be empowered to conduct public enquires on any matter that it deems relevant to the performance of its functions and to achieve the objects of the Act. Section 4B, however, while providing for enquiries "for the purpose of improving the performance of [the Authority's] functions", in fact deals, among other, with compliance by persons with the relevant Acts or the terms and conditions of a licence. The tenor of the section, in fact, seems to be more in the nature of a hearing into the possible misbehaviour by persons, resulting in enforceable findings of law, rather than of an enquiry. Such process, however, is envisaged in the provisions of sections 17A to 17F in a much procedurally structured manner. Other, perhaps unwanted, consequences may result from the structure of section 4B, which are discussed in more detail later in this submission.

• The power of the Authority to delegate any of its functions to a Councillor, a Committee of the Council (which might not comprise any Councillor) or to the Chief Executive Officer. In Telkom's view this power is too broad and should be somewhat restricted (see, for example, section 91 of the Telecommunications Act, Act 103 of 1996).

• The establishment of standing and special committees that do not contain a Councillor as a member, and to which, among others, any power of the Authority can be delegated. This concern does not apply to the Complaints and Compliance Committee (CCC), whose functions and processes are well defined and circumscribed.

• Some of the powers of the Authority are not explicitly linked to the underlying statues (while many are). This could create uncertainty as it might be possible to interpret these powers as independent of and overriding the underlying statutes.

• There might be an overlap of responsibilities between the CCC and the Inspectors, which may lead to confusion.

Most of these concerns are discussed in more detail in the next section and, where possible, Telkom has respectfully proposed textual amendments that could address the issue in question.

DETAILED COMMENTS

This section provides comments on specific sections of the Bill. Where no comment is offered on a proposed amendment in the Bill, such amendment is supported.

Where an alternative text is offered, this is boxed for clarity.

References to the Convergence Bill are to the text of the Bill as originally tabled in Parliament.

Substitution of section 4 of Act 13 of 2000: Functions of Authority and chairperson

Section 4(3)

"(c) must manage the radio frequency spectrum in accordance with bilateral agreements or international treaties entered into by the Republic;

(e) must grant, renew and amend licences

"(f) must approve technical parameters and transmitter and transmission characteristics to be used by licensees;"

In Telkom's view the above clauses do not belong in this Bill. They are more appropriately addressed in the underlying legislation. For example Chapter V of the Convergence Bill addresses extensively spectrum management and Chapter VI addresses technical standards. The power to grant, renew and amend licences can also be only as provided by the underlying statutes. Telkom respectfully submits that the deletion of the above clauses would improve clarity and certainty.

Section 4(4)

"(4) The Council may, in writing, delegate any function of the Authority in terms of this Act, or the underlying statutes t~

(a) a councillor;

(b) a committee of the council established in terms of section 17; or

(C) the chief executive officer appointed in terms of section 14."

In Telkom's view the above section is too wide and may confer powers on a committee or the Chief Executive Officer which are not appropriate and may result in the Authority fettering its own powers. Telkom strongly recommends that this section be augmented with the safeguards contained in section 91 of the Telecommunications Act and that the following sub-sections be added:

(4A) The power to make regulations shall not be delegated in terms of subsectIon (4).

(4B) A power or duty delegated to the chief executive officer may be exercised or performed by any other staff member of the Authority authorised thereto by the chief executive officer, except where precluded by the terms of such delegation.

(4C) Any delegation or authorisation in terms of subsection (4) or (4B)-

(a) shall be subject to such conditions and restrictions as may be determined by the Council or chief executive officer, as the case may be; and

(b) may at any time be amended or revoked.

(4D) The Council shall not be divested of any power or function or relieved of any duty which it may have delegated in terms of subsection (4), and may amend or rescind any decision made in terms of such a delegation, except where any licence, approval, certification or registration will be affected thereby.

Section 4(5)

Telkom is of the view that the term "managing" in clause (b) is perhaps inappropriate to the functions of councillors and should be replaced by words such as "supervising" or "co-ordinating".

Insertion of sections 4B and 4C in Act 13 of 2000

4B. (1) The Authority may, for the purpose of improving the performance of its functions, conduct an inquiry into any matter with regard t~

(a) the achievement of the objects of this Act or the underlying statutes;

(b) regulations and guidelines made in terms of this Act or the underlying statutes;

(c) compliance by applicable persons with this Act and the underlying statutes; and

(d) compliance with the terms and conditions of any licence by the holder of such licence issued pursuant to the underlying statute."

Telkom fully agrees that the Authority should be empowered to conduct public enquires on any matter that it deems relevant to the performance of its functions and to achieve the objects of the Act. Such enquiries could, for example, relate to finding whether existing regulations are effective, or whether market conditions are such that additional or different regulatory intervention may be required. It is totally unclear, however, in what manner an enquiry in the "compliance by applicable persons" with the relevant statutes or "compliance with the terms and conditions of any licence" by a licensee, may contribute to improving the performance of the Authority's function. Furthermore, when read with the provision of section 4C, a strong impression appropriate provision, in a fairly comprehensive and procedurally structured manner, for enquiries into the actions of licensees or other persons by means of sections 17A to 17E.

Consequently, Telkom respectfully submits that section 4B should be amended by the deletion of clauses 4B(1)(c) and (d):

4B. (1) The Authority may, for the purpose of improving the performance of its functions, conduct an inqujy into any matter with regard t~

(a) the achievement of the objects of this Act or the underlying statutes;

(b) regulations and guidelines made in terms of this Act or the underlying Statutes[;

(d) compliance with the terms and conditions of any licence by the holder of such licence issued pursuant to the underlying statutes].

Subsection (2) stipulates that in the notice of enquiry the Authority must "indicate the subject matter of the inquiry". In Telkom's view the Authority should indicate more than just the subject matter, but rather should provide as much background information as possible on the issue on which comment is sought. Telkom, however, is not offering any specific amendment to the text of subsection (2).

"Conduct of inquiries

4C. (1) Subject to this Act, the person presiding at an inquiry conducted in terms of section 4B must determine the procedure at such inquiry.

(2) The Authority may, subject to any law governing privilege, for the purpose of an inquiry-

(a) through the person presiding at such inquiry, by notice in writing in the prescribed form, require from any person such particulars and information as may be reasonably necessary;

(b) by notice in writing in the prescribed form under the hand of a councillor, addressed and delivered by an authorised person or a sheriff to any person, require such person to-

(i) appear before it at the date, time and place specified in such notice;

(ii) make a statement; and

(iii) submit to it all the documents or objects in the possession or custody or under the control of any such person which may be reasonably necessary; and

(c) through the person presiding at such inquiry and after explaining applicable rights under the Constitution and this section, question any person referred to in paragraph (b) in connection with any matter as may be reasonably necessary"

Subsection (2) lays out procedural matters which clearly provide for the power to subpoena information to be produced and persons to appear at the enquiry. This interpretation is supported by subsection (4), providing that a person appearing at the enquiry may have legal representation. Section 17H(1) makes a failure to comply with a notice issued in terms of section 4C(2)(a) or (b), or a failure to answer a question put in terms of section 4C(2)(c), an offence under the Act.

In view of the above, Telkom finds it disturbing that no provision has been made in section 4C(1) for the qualifications of the person presiding at the enquiry. Telkom respectfully submits that such a person should be a councillor and section 4C(1) should be amended accordingly.

4C. (1) Subject to this Act, the person, who shall be a councillor, presiding conducted in terms of section 4B must determine the procedure at such inquiry.

"(6) The Authority must, within 180 days from the date of conclusion of the hearing-

(a) make a finding on the subject matter of the inquiry; and (b) publish in the Gazett~

(i) a summary of its finding; and

(ii) the details of the place where and the time when the finding and the reasons for the finding can be obtained by the public." (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 to their regulated activities."

At inquiry

Subsection (6) provides that the Authority must make findings. Subsection (7) provides that such findings are enforceable and binding on all licensees. This provision does not agree with the stated purpose of the enquiry "of improving the performance of its [the Authority's] functions". In Telkom's view the findings of the enquiry may lead to the Authority concluding that some regulatory intervention may be necessary to improve the performance of its functions. To the extent that such intervention may need to be enforceable and binding on licensees, such will probably require the making of regulations, as provided for in the underlying statutes. In view also of what was said in respect of section 4B(1)(c) and (d), Telkom respectfully submits that subsection (71 should be deleted, especially if the person presiding at the enquiry has the power, as provided for in section 4C(1), to determine the procedure at the enquiry. Failing the deletion of subsection (7), an alternative process would have been created for making rules with the force of law (and without any appeal process), independent of, arid without reference to, the regulation making provisions of the underlying statutes, and under conditions less procedurally satisfactory.

Amendment of section 5 of Act 13 of 2000: Constitution of and appointment of councillors to Council

Telkom notes that the selection and appointment of councillors is now a prerogative of the Minister. Considering that the State, through the Minister, is a shareholder in several major licensees, Telkom is concerned that a conflict of interest may arise in the selection and appointments of councillors.

Insertion of sections 14C in Act 13 of 2000

Section 14C provides for the protection of confidential information by the Authority and its employees. Telkom supports these provisions. Flowever, it is not clear to Telkom whether experts and inspectors are considered to be employees o~ the Authority. If not, they should be brought within the ambit of section 14C. In fact any person performing any task or function for or on behalf of the Authority, or providing any advice to the Authority, whether under terms of employment or not, should be bound by the non-disclosure provision of section 14(;.

Amendment of section 15 of Act 13 of 2000

"(1A) 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."

Telkom has consistently advocated that the Authority should be adequately financed, thus it supports the insertion of subsection (1A). Telkom hopes, however, that this should not result in an increased financial burden (e.g. through increased licence fees) on operators.

Amendment of section 17 of Act 13 of 2000, as amended by section 30 of Act 64 of 2002

"Section 17 of the principal Act is hereby amended by the deletion of subsections (2), (3), (4), (5), (6), (7), (8) and (9), the current subsection (1) becoming section 17".

Telkom does not see the value of deleting subsections (2) to (9), as they provide a solid framework for the composition of the committees, in particular that a committee must comprise at least one councillor, and the procedures and processes that they must follow. These committees may be involved in addressing matters of great importance (licence applications, enquiries, regulations, etc.) which may affect the rights of interested persons. It is therefore important that there should be no opportunity, or even a remote possibility, for indiscretion in the composition and working of the committees. Telkom respectfully submits that the existing section 17 should remain unaltered.

Insertion of sections 17A, 17B, 17C, 17D, 17E, 17F, 17G and 17H in Act 13 of 2000

17A. (1) The Authority must establish a Complaints and Compliance Committee which consists of not more than seven members, one of whom must be a councillor."

Telkom supports this provision, although it would have preferred this body to be in the nature of a tribunal, so as to separate the Authority's rule making powers from its adjudicative powers.

Telkom believes that the CCC should be established as soon as possible and that a time limit should be set for such establishment. Telkom, therefore, respectfully submits that subsection (1) should be amended accordingly:

17A. (1) The Authority must. within six month after the commencement of this section. establish a Complaints and Compliance Committee which consists of not more than seven members, one of whom must be a councillor.

Telkom also would like to suggest that the word 1'or'1 should be added at the end of clause 1 7A(2)(a). It is clear that the Chairman should either be a judge or an advocate, or a magistrate.

In addition to the above, Telkom respectfully submits that further clarification is needed on the following:

• Whether the CCC is a permanent body or is set up ad hoc. The provisions of sections 17B and 17C seem to indicate that the committee is a permanent one;

• The relationship between the CCC and the staff of the Authority, and how the CCC is going to be financed and its members remunerated;

• The relationship between enactment of the Convergence Act and the ICASA Amendment Act. It is assumed that the Convergence Act will repeal the Telecommunications Act, and in particular section 100 thereof. If that should happen before the CCC is established, there could be a lacuna in the handling of complaints, either already pending in front of the Authority in terms of section 100 of the Telecommunications Act, or to be lodged in the interim.

Depending on how the above issues are addressed, additional provisions may have to be made in the Bill. Due to the uncertainty, Telkom is regretfully not able to make constructive suggestions thereto.

"Functions of Complaints and Compliance Committee

17B. The Complaints and Compliance Committee-

(a) must, through inspectors appointed by the Authority, investigate, hear and make a finding on-

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

(ii) all complaints received by it; and

(iii) all allegations of non-compliance with this Act or the underlying statutes received by it; and

(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."

Telkom notes that sections 17B(a)(ii) and (iii), when read with section 17B(a)(i), contemplate that the CCC might receive complaints and allegations of non-compliance also from parties other than the Authority. This, in Telkom's view, is contradictory to section 17C(1), which provides that any person should lodge complaints with the Authority, rather than directly with the CCC. In Telkom's view, section 17C(1) is more appropriate, as it provides the Authority, as distinguished (for this purpose) from the specialised CCC, to determine whether there is prima facie substance to a complaint, and prevent burdening its special committee with having to address complaints which are clearly without substance or frivolous. It is also important that the CCC not be burdened with ordinary customer complaints (accounts, quality of service, etc.). This would require the amendment to section 17C(1)(b) proposed later herein. Telkom, therefore, respectfully suggests the following amendment to section 17B:

17B. The Complaints and Compliance Committee-

(a) must, through inspectors appointed by the Authority, investigate, hear and make a finding on

[-(i)] all matters referred to it by the Authority;

[(ii) all complaints received by it; and

(iii) all allegations of non-compliance with this Act or the underlying statutes received by it;] and

(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."

"Procedure of Complaints and Compliance Committee

17C. (1) (a) A person who has reason to believe that a licensee is guilty of any noncompliance 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."

It is not clear to Telkom why only "licensees" that may be in contravention of the Act should fall under the purview of the Authority. It is true that currently the Authority has no locus standi to hear complaints pertaining to non-licensees who are providing illegal telecommunications services but, in Telkom's view, this is an opportunity to rectify this shortcoming.

The use of the phrase "is guilty or' in clause (a) is unfortunate, as guilt is something that can only be determined through due process and not by way of assumption or suspicion.

In view of the above, Telkom respectfully proposes that subsection (1)(a) be amended as follows:

17C. (1) (a) A person who has reason to believe that a licensee is [guilty of any noncompliance with] in contravention of the terms and conditions of its licence or that any person is in contravention of [with] this Act or the underlying statutes, may lodge a complaint with the Authority within sixty days of becoming aware of the alleged non-compliance.

"(2) Before the Complaints and Compliance Committee hears a matter it must-

(a) provide the licensee to the dispute with-

(i) a copy of the complaint where a complaint has been lodged; and

(ii) a notice setting out the nature of the alleged non-compliance;

(b) afford the licensee a reasonable opportunity to respond to the allegations in writing; and

(c) afford the complainant a reasonable opportunity to reply to such response in writing where a complaint has been lodged"'

Telkom supports the provisions of subsection (2). However, the phrase "a reasonable opportunity" is vague and subjective and should be replaced with a more specific time limit, while still providing the CCC with the necessary flexibility. Telkom, therefore, respectfully proposes that subsection (2) be amended as follows:

(2) Before the Complaints and Compliance Committee hears a matter it must-

(a) provide the licensee to the dispute with-

(i) a copy of the complaint where a complaint has been lodged; and

(ii) a notice setting out the nature of the alleged non-compliance;

(b) afford the licensee [a reasonable] an opportunity to respond to the allegations in writing within 14 days. or any longer period the Complaints and Compliance Committee may deem appropriate; and

(c) afford the complainant [a reasonable] an opportunity to reply to such

response in writing within 14 days. or any longer period the Complaints and Compliance Committee may deem appropriate where a complaint has been lodged.

Telkom fully supports the remainder of this section.

17D. (1) The Complaints and Compliance Committee must make a finding within 90 days of a hearing contemplated in section 17B.

(2) The Complaints and Compliance Committee must recommend to the Authority what action by the Authority should be taken against a licensee, if any.

(3) The Complaints and Compliance Committee must submit its finding and

recommendations contemplated in subsection (1) and a record of such proceedings to the Authority for a decision regarding the action to be taken by it."

While Telkom supports the provisions of this section, it believes that the recommendations of the CCC should be based on the underlying statutes, and that this should be explicitly provided for. Telkom also believes that the complainant and the licensees concerned should be informed of any recommendation made by the CCC. In 17D(2) reference to "licensee" should be replaced with a term such as "transgressor" for the reasons mentioned earlier. Telkom therefore, respectfully proposes that section 17D be amended as follows:

17D (1) The Complaints and Compliance Committee must make a finding within 90 days of a hearing contemplated in section 1 7B.

(2) The Complaints and Compliance Committee must recommend to the Authority what action, if any, by the Authority should be taken against (a licensee] the transgressor, as provided for in the underlying statutes [if any,].

(3) The Complaints and Compliance Committee must submit its finding and recommendations contemplated in subsection (1) and a record of such proceedings to the Authority for a decision regarding the action to be taken by it.

(4) The Complaints and Compliance Committee must provide the complainant and the person against whom the complaint was lodged with a copy of its findings.

"Decision by Authority

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.

Telkom is of the view that the findings and recommendations of the CCC should form the primary basis of the decision to be made by the Authority. In exercising its discretion on how to implement the CCC recommendations, however, the Authority will take into account the matters contemplated in clauses (a) to (e). Telkom, therefore, respectfully proposes that subsection (1) be amended as follows:

"Decision by Authority

17E. (1) When making a decision contemplated in section 17D, on the basis of findings and recommendations of the Complaints and Compliance Committee, 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].

(2) The Authority must make a decision permitted by this Act or the underlying statutes and provide persons affected by such decision with written reasons therefor."

Telkom is of the view that the phrase "permitted by this Act or the underlying statutes" in subsection (2) may be interpreted as providing the Authority with a choice between this Act or the underlying statutes. This Act, of course, assists the Authority in coming to a decision, but the decision itself must be in line with the underlying statutes. Telkom believes that any possibility of equivocation should be eliminated. Telkom therefore, respectfully proposes that the following amendment to subsection (2).

(2) The Authority must make a decision permitted by this Act [or] read with the underlying statutes and provide persons affected by such decision with written reasons therefor

Inspectors

Telkom is in general agreement with the provision of section 17F. Certain aspects of this section are, however, of some concern as there appears to be some confusion in the functions of the inspectors and those of the CCC, and in fact some overlap. In particular, the following should be considered:

there should be a single point of entry for lodgement of complaints with the Authority. Inspectors should not be empowered to receive complaints or to initiate investigations - this might lead to abuse of powers

• any conduct of the inspectors should be mandated;
• inspectors should not act as a point of entry for complaints and initiate investigations; they should only perform investigations on instructions.

In order to eliminate, as far as possible, these uncertainties, respectfully proposes the following amendments to subsection (5):

(a) monitor compliance by licensees of licence terms and conditions; Telkom

(b) monitor compliance by licensees with the provisions of this Act and the underlying statutes;

(c) investigate and evaluate, on the instruction of the Complaints and Compliance Committee. any alleged or suspected-

(i) non-compliance by a licensee with its licence terms and conditions and provisions of this Act or the underlying statutes;

(ii) breach by a licensee of an agreement between such licensee and its subscribers;

(iii) failure to provide a broadcasting communications service that the licensee is required to provide under the terms of its licence or in terms of this Act or the underlying statutes;

(d) refer their reports on all non-compliance matters to the Complaints and Compliance Committee for consideration where an inspector determines that a licensee has not complied with the terms and conditions of its licence, provisions of this Act or the underlying statutes or failed to provide broadcasting or communications services;

(e) refer their reports on all complaints to the Complaints and Compliance Committee for consideration after an investigation into the complaint has been carried out;

Offences and Penalties

Telkom supports the provision of section 17H, except in respect of subsection 17H(1)(c) which provides as follows:

(c) makes a false statement before the Authority on any matter, knowing such statement to be false or not knowing or believing it to be true;

In Telkom's view the phrase: "knowing such statement to be false or not knowing or belle ving it to be true" poses an unreasonable burden on the person making a statement, particularly in view of the R10 000 fine that can be imposed (subsection 2), and should, therefore be deleted:

(c) makes a false statement before the Authority on any matter, knowing such statement to be false [or not knowing or believing it to be true];

Telkom believes that the ICASA amendment Bill is a very important piece of legislation that will go a long way in assuring that the Authority can exercise its functions efficiently in the complex environment of the communications market, present and future.

Telkom substantially supports the provisions of the Bill and hopes that its comments and suggestions will have contributed to further improve this piece of legislation.

Telkom wishes the Portfolio Committee on Communications success in this very important endeavour and, once again, expresses its gratitude to the Committee for having been allowed to make this contribution.