Submission on Electronic Communications Amendment Bill

[ellipsis]

Electronic Communications Amendment Bill 2012

Deadline for submissions: 14 September 2012
Internal deadline for contributions: 20h00 Friday 7 September 2012

This is a relatively technical and legalistic document which is not easy to break down into simple, bite-sized chunks. It is also not straightforward to reduce this all to a consumer angle.

The main issues initially identified are:
- insertion of definition of broadband
- the proposal to somehow restrict the rights of some electronic communications network service (ECNS) licensees to roll out infrastructure
- the proposal to create a new Spectrum Management Agency

Lesser issues:
- some amendments to the ECS/ECNS licensing framework relating to empowerment
- some well-intended amendments to the interconnection, facilities leasing and competition provisions of the ECA
- some fiddling with the e-rate

In the next few posts i will set out the Memorandum published with the Bill - this gives a quick overview of all the issues covered and is not in legalese, i.e. a good place to start.

After that will put some detailed posts on the main issues.

 

[ellipsis]

Memorandum on the Electronic Communications Amendment Bill

1. BACKGROUND AND OBJECTS

The object of the Bill is to amend the Electronic Communications Act,
2005, so as to align the Act with broad-based black economic empowerment;
to incorporate the Authority's recommendation on ownership and control of
commercial broadcasting services; to introduce a Spectrum Management Agency
and clarify the responsibilities of the Agency and the Authority in respect
of frequency spectrum management; to refine licensing issues; to improve
the competition provisions; to improve turn-around times for consultative
processes; to improve the governance provisions of the Universal Service
and Access Agency of South Africa; to remove regulatory bottlenecks; and to
provide for matters connected therewith.

2. PROVISIONS OF BILL

2.1 Amendment of section 1 of Act 36 of 2005

This clause seeks to amend the definitions of the Act as follows:

a) Definitions are inserted for "allocation", "assignment" and
"broadband". The definitions are linked to the Chapter 5 amendments
on Frequency and are based on the ITU Radio Regulations. A new
definition of broadband is proposed. Even though the definition in
paragraph 1.3.3 of Broadband Policy for SA, GG33377, 13 July 2010
indicates a broadband speed of 256kbps, it is understood that EXCO
decided that it must be left open to determine from time to time;

b) the definition of "broadcasting service radio frequency bands" is
amended to refer to the ITU table of allocation as opposed to
allotment;

c) common carrier is redefined to mean 'Sentech Limited, a public
company established in terms of the Sentech Act, 1996 (Act No. 63 of
1996) and any other [a] person licensed to provide an
electronic communications network service who is obliged to provide
signal distribution for broadcasting services on a non-
discriminatory and nonexclusive basis'. See discussion under
'Sentech as Common Carrier' below;

d) the definitions for "community" and "community broadcasting service"
are redefined to limit the service to a geographically defined
community. ICASA requested that community broadcasting service
should be restricted to a geographic area since frequencies are
finite. 'Community' and 'community broadcasting service' were
subsequently redefined to limit the service to a geographically
defined community;

e) a definition is inserted for "control". ICASA proposed amendments to
sections 64, 65 and 66 of the Act. The recommendations must be
tabled in the National Assembly as required by the Act. Instead of
describing what constitutes control in a new clause 65(1 A) as
recommended by 1CASA, the insertion of a definition for control in
section 1 should be considered. The current section 66(5) should
subsequently be deleted. This approach is suggested since ICASA's
recommendation will still leave uncertainty regarding the meaning of
control in section 64. See discussion under 'Limitations on Control
and Cross-Media Control of Commercial Broadcasting Services' below;

f) the definition of "electronic communications facility" is amended to
include access to wiring in multi-tenant buildings as well as both
active and passive components. The amendments were requested by
ICASA since operators argue that they are only obliged to lease the
passive components on their network;

g) the definition of "end-user" is amended so that it is defined in
relation to not only licensees, but also those exempt from
licensing. "End-user" is currently defined in relation only to
licensees, but there are end-users in respect of those using licence
exempt services as well, so the definition should be amended;

h) the definition of "electronic communications service licensee" is
amended to include a reference to section 5(4) (class licences)
since it currently only refers to section 5(2) (individual
licences);

i) the definitions for "existing licences" and "transition period" are
deleted since they have become redundant. ICASA commented that the
definitions for "existing licences" and "transition period" are
redundant as license conversion is completed;

j) the definition of "ITU" is corrected to reflect the correct name
i.e. "'ITU' means International Telecommunication Union";

k) the definition of "licensee" is substituted to include radio
frequency spectrum licensees. According to ICASA the definition has
always fell short, failing to include radio frequency spectrum
licensee(s) in terms of Chapter 5 of the Electronic Communications
Act, 2005. The existing definition has as a result excluded a radio
frequency spectrum licensee or holder to be characterised as a
licensee as defined in the Act. The anomaly in the definition
creates technical challenges in the monitoring and enforcement
functions of the Authority;

l) the definition of "radio frequency plan" is amended to refer to the
national radio frequency plan contemplated in section 34 and to
provide the correct terminology since it should refer to ITU table
of allocations and not allotments;

m) the definition of "radio frequency spectrum" is substituted to
include broadcasting in addition to electronic communications.
"Radio frequency spectrum" and "radio station" are defined in
relation only to ECS and not also BS, which is not consistent with
the reality that BS licensees use spectrum. The terms, "radio
frequency spectrum" and "radio station" should be amended to be
defined in relation to BS, as well as ECS;

n) a definition is inserted for "radio frequency spectrum licence".
ICASA indicated that the definition of 'licensee' (discussed above)
has always fell short, failing to include radio frequency spectrum
licensee(s) in terms of Chapter 5 of the Electronic Communications
Act, 2005. The Authority proposed that definitions be inserted for
"service licensee" and "radio frequency spectrum licensee";

o) the definition of "radio station" is substituted to include
broadcasting in addition to electronic communications;

p) the definition of "registered political party" is substituted with
"political party" since only the latter term is used in the Act;

q) the definition of "reseller" is substituted to correct the language;

r) the definition of "service charter" is substituted to add 'end-
users' to 'subscribers' for consistency with the text in the Act.
This is required since all references in the Act to 'service
charter' is preceded by the words 'end-user and subscriber'. End-
user is the person who uses a product. The end-user or consumer may
differ from the person who purchases the product or subscribes to
the service;

s) a definition is inserted for "service licensee". ICASA indicated
that the definition of 'licensee' (discussed above) has always fell
short since it fails to include radio frequency spectrum licensee(s)
in terms of Chapter 5 of the Electronic Communications Act, 2005.
The Authority proposed that definitions be inserted for "service
licensee" and "radio frequency spectrum licensee";

t) a definition is inserted for "Spectrum Management Agency" to mean an
Agency established in terms of legislation prepared for this
purpose. See discussion under Radio Frequency Spectrum below;

u) the definition of "universal service" is substituted to clarify that
it applies to electronic communications network services in addition
to electronic communications services and broadcasting services.

2.2 Amendment of section 2 of Act 36 of 2005

a) The purpose of the amendments is to amend some of the Objects of the
Act. This clause seeks to amend section 2(b) to narrow the meaning
of the obligation to create a technologically neutral licensing
framework. ICASA believes this narrowed meaning should be inserted
as the term technology neutrality has compounded the administration
of licensing. ICASA is of the view that the distinction between ECS
and BS contradicts a technology neutral licensing framework. A
narrowed meaning is required to allow technology specificity where
applicable such as the frequency plan.

b) The amendment of section 2(h) is discussed under BEE below.

2.3 Amendment of section 3 of Act 36 of 2005

a) This clause seeks to amend section 3(1) by adding a new paragraph on
ownership and control of individual licences to the policy making
categories; this clause further amends section 3(2) to enable the
Minister to issue policy directions to the Universal Service and
Access Agency of South Africa (USAASA). It further seeks to broaden
the scope of policy directions that may be issued.

b) The amendment of clause 3(4) seeks to include USAASA.

c) It further amends section 3(5) to include USAASA and to amend the
consultative period to 30 calendar days; it further seeks to add a
new subsection to enable deviation from the Promotion of
Administrative Justice Act, 2000 by the Minister when reasonable and
justifiable.

 

[ellipsis]

Memorandum cont...

2.4 Amendment of section 4 of Act 36 of 2005

This clause seeks to amend section 4(1)(d) to amend ICASA's power to
make regulations from 'control' of the radio frequency spectrum, to 'use'
of the radio frequency spectrum; it further seeks to amend section 4(3) to
create more latitude for ICASA regarding the imposition of fines; this
clause amends sections 4(4) and (5) to amend the consultative period to 30
calendar days and to require that a copy of the proposed regulations be
made available to the Minister 30 calendar days before such regulations are
made; it further seeks to add a new subsection to enable deviation from the
Promotion of Administrative Justice Act, 2000 by ICASA when reasonable and
justifiable.

2.5 Amendment of section 5 of Act 36 of 2005

This clause seeks to amend section 5(3)(b) by replacing 'regional' with
'provincial' to provide more certainty; it seeks to amend section 5(3)(c)
to better describe the types of electronic communications services that
require an individual licence; it further seeks to delete section 5(3)(d)
since it is not required; this clause amends section 5(5)(b) to distinguish
between 'community broadcasting' and 'low power services' that are two
distinct categories; it seeks to insert a new section 5(5)(c) to ensure
that the same distinction that applies between individual and class
electronic communications network services should also apply to electronic
communications services using scope and coverage; it further adds a new
paragraph 5(8A) to ensure that applicants for licence exemption must be
South African similar to other licence applicants to close the loophole
used by foreign entities; and it seeks to amend section 5(9)(b) by
replacing the empowerment of historically disadvantaged persons with broad-
based black economic empowerment.

2.6 Amendment of section 6 of Act 36 of 2005

This clause seeks to delete all references to spectrum licence
exemptions.

2.7 Amendment of section 8 of Act 36 of 2005

This clause seeks to amend section 8(2) to clarify that the standard
terms in licences may be about and not just take into account certain
listed matters. It further seeks to clarify that ICASA may impose
additional licence terms and conditions. It seeks to make it clear that
ICASA may impose licence terms and conditions on designated licensees
relating to universal access and universal service. It further seeks to
ensure that ICASA consults with USAASA on universal service and access.

2.8 Amendment of section 9 of Act 36 of 2005

a) It is proposed that the focus of the Act be changed from the
empowerment of historically disadvantaged persons to broad-based
black economic empowerment. ICASA has requested an alignment of the
ECA's use of the terms historically disadvantaged persons and groups
with section 4(3)(k) of the ICASA Act that refers to regulations in
accordance with the BBBEE Act. ICASA should therefore be enabled to
prescribe regulations in accordance with the BBBEE Act, Code of Good
Practice, and Balanced Scorecard.

b) This clause seeks to replace the required equity ownership by
historically disadvantaged groups in section 9(2)(b) with broad-
based black economic empowerment requirements prescribed under
section 4(3)(k) of the ICASA Act. It also contains consequential
amendments following the amendment of sections 8(3) and (4).
Consequential amendments are also required in the definitions,
sections 2(h), 5(9)(b), 13A(3)(a) and 65(6)(a).

2.9 Amendment of section 10 of Act 36 of 2005

This clause seeks to amend section 10(1)(h) to remove ambiguity. The
amendment enables ICASA to amend a license whether regulations have been
issued under Chapter 10 or not.

2.10 Amendment of section 13 of Act 36 of 2005

a) This clause seeks to ensure that the transfer of individual licences
including the transfer of control, letting and sub-letting of such
licences, require the prior approval of ICASA.

b) The ownership and control provisions are removed from section 13
that deals with transfers and included in a separate new clause 13A.

2.11 Insertion of section 13A in Act 36 of 2005

This clause seeks to empower ICASA to impose limitations on ownership,
and control even outside the context of a transfer application. The
limitations should be applicable to existing and new licences, with due
regard to section 4(3)(k) of the ICASA Act.

2.12 Amendment of section 16 of Act 36 of 2005

This clause seeks to change the requirement that ICASA grants class
licences as the intention is mere registration; it provides that class
licences obtained by any person may not collectively assume the scope or
coverage of an individual licence; it enables ICASA to prescribe the
intervals at which registrations may be submitted and allows the transfer
of a class licence upon notification to ICASA.

2.13 Amendment of section 17 of Act 36 of 2005

This clause seeks to simplify the class licence registration process
and turnaround time and includes consequential amendments following the
amendment of section 16.

2.14 Amendment of section 20 of Act 36 of 2005

Following the Altech judgement, a significant number of former Value
Added Network Service licenses were converted to ECNS licenses with
accompanying right of way rights under Chapter 4. The section 20 amendment
seeks to limit the application of Chapter 4 to specific ECNS licensees as
prescribed by the Authority since it is currently impractical; it also
seeks to make better provision for the regulation of ECNS licensees that
exercise any rights and obligations under this Chapter.

2.15 Amendment of section 21 of Act 36 of 2005

Due to the critical importance of the provision in section 21 on the
Guidelines for the rapid deployment of electronic communications facilities
especially for broadband roll-out, it should be considered how to best give
full effect to it. This clause seeks to replace guidelines with policy and
policy directions made by the Minister to remove the uncertainty on the
status of guidelines. It further enables ICASA to prescribe regulations to
give effect to the policy and policy directions..

 

[ellipsis]

Memorandum cont...

2.16 Amendment of sections 30 to 34 of Act 36 of 2005

a) This clause seeks to align the radio frequency spectrum issues in
Chapter 5 of the Act with the Cabinet approved National Radio
Frequency Spectrum Policy. It further seeks to introduce a Spectrum
Management Agency within the portfolio of the Minister of
Communications with overall responsibility for the country's
spectrum as contemplated in the White Paper on Broadcasting Policy,
1998.

b) The National Radio Frequency Spectrum Policy clarifies the Minister
and ICASA's role in respect of allocation and assignment as follows:

"2.1.3 The Minister of Communications ("The Minister") acts as the
custodian of the spectrum on behalf of the people of South Africa."

"2.5 Roles and Responsibilities

2.5.1 The Minister

The Minister represents South Africa in the ITU. This includes, inter
alia the allocation of the radio frequency spectrum to various radio-
communication services.

The Minister is responsible for all international spectrum matters
pertaining to South Africa, including Regional and sub-Regional spectrum
planning, all cases concerning international harmful interference and
international frequency co-ordination. The Department will liaise with
ICASA in such matters.

2.5.1.1 The Minister is responsible for issuing policies and policy
directions in relation to the radio frequency spectrum.

2.5.1.2 The Minister is responsible for the development of the South
African national allocation plan, and for the allocation of spectrum to the
different radio-communication services.

2.5.1.3 The Minister is required to allocate spectrum for the exclusive
use of the security services, and that such spectrum be included in the
national frequency plan.

2.5.1.4 The Minister is responsible for the co-ordination and approval
of any Regional radio frequency spectrum plans applicable to South Africa.

2.5.2 ICASA

2.5.2.1 ICASA is responsible for, administering and managing the usage
of the radio frequency spectrum, and for the licensing thereof.

2.5.2.2 In order to fulfil its functions ICASA issues National Radio
Regulations that must be adhered to by all the users of national spectrum.

2.5.2.3 ICASA is responsible for the implementation of this Policy.

2.5.2.4 ICASA is responsible for the assignment of radio frequency
spectrum to licensees and for the development of national assignment
plans."

c) The role and functions allocated to the Minister in the National
Radio Frequency Spectrum Policy should be assigned to the Spectrum
Management Agency with the exception that the Minister must approve
the national radio frequency policy 'as the custodian of the
spectrum on behalf of the people of South Africa'.

d) Accordingly, the Department will prepare a separate Bill to
establish the Spectrum Management Agency.

2.17 Amendment of section 35 of Act 36 of 2005

This clause seeks to close a loophole by requiring that persons
possessing equipment and facilities must also obtain type approval from
ICASA.

 

[ellipsis]

Memorandum cont...

2.18 Amendment of section 37 of Act 36 of 2005

This clause seeks to redefine the reasonability of interconnection
requests by changing the requirement for financial feasibility to economic
feasibility that have wider application; it further seeks to ensure that
interconnection agreements are not in any way discriminatory compared to
the comparable network services provided by a licensee to itself or an
affiliate.

2.19 Amendment of section 38 of Act 36 of 2005

This clause seeks to add a reference to section 41 that is about the
wholesale interconnection rate regulations, that could now form part of the
main interconnection regulations under section 38; it also enables class
licensees to enter into interconnection agreements; it further seeks to
ensure that ICASA can regulate interconnection and facilities leasing
regardless of what it does or does not do in terms of Chapter 10 of the
ECA; it further seeks to make consequential amendments by changing cross-
references to section 39 following changes to the sequence of subsections.

2.20 Amendment of section 39 of Act 36 of 2005

This clause seeks to amend the sequence of the subsections to ensure
that the processes are in correct order; it further seeks to permit the
review of interconnection agreements even before formally concluded and
filed.

2.21 Amendment of section 41 of Act 36 of 2005

This clause seeks to ensure that ICASA may prescribe a framework of
wholesale interconnection rates regardless of what it does or does not do
in terms of Chapter 10 of the ECA.

2.22 Amendment of section 42 of Act 36 of 2005

This clause seeks to delete the timeframe that is now irrelevant.

2.23 Amendment of section 43 of Act 36 of 2005

This clause seeks to redefine the reasonability of facilities leasing
requests by changing the requirement for financial feasibility to economic
feasibility that have wider application; it further seeks to ensure that
facilities leasing agreements are not in any way discriminatory compared to
the comparable network services provided by a licensee to itself or an
affiliate; it further seeks to provide clarity on how essential facilities
are to be treated and provided without delay and to enable ICASA to act
swiftly in terms of this provision, which is essential to the
implementation of a non-discriminatory access regime; it further seeks to
nullify exclusivity provisions contained in any agreement or other
arrangement that is prohibited under subsection (10) three years after the
commencement of this Act.

2.24 Amendment of section 44 of Act 36 of 2005

This clause seeks to ensure that ICASA can regulate facilities leasing
regardless of what it does or does not do in terms of Chapter 10 of the
ECA; it further seeks to make consequential amendments by changing cross-
references to section 45 following changes to the sequence of subsections.

2.25 Amendment of section 45 of Act 36 of 2005

This clause seeks to amend the sequence of the subsections to ensure
that the processes are in correct order; it further seeks to permit the
review of facilities leasing agreements even before formally concluded and
filed.

2.26 Amendment of section 47 of Act 36 of 2005

This clause seeks to enable ICASA to regulate wholesale rates
applicable to specified types of electronic communication facilities
regardless of what it does or does not do in terms of Chapter 10 of the
ECA.

2.27 Substitution of section 55 of Act 36 of 2005

This clause seeks to ensure that ICASA may regulate scheduling of
adverts, infomercials and programme sponsorships as proposed by ICASA. This
is due to the fact that the ASA's code of advertising practice does not
regulate it. The scheduling of adverts, infomercials and programme
sponsorships was previously regulated via regulations issued in 1999
(Advertising, Infomercials and Programme Sponsorship regulations).

2.28 Amendment of section 62 of Act 36 of 2005

a) Common carrier has been redefined in the definitions section as
follows:

'"common carrier' means Sentech Limited, a public company
established in terms of the Sentech Act, 1996 (Act No. 63 of 1996) and any
other [a] person licensed to provide an electronic
communications network service who is obliged to provide signal
distribution for broadcasting services on a non-discriminatory and non-
exclusive basis;";

b) This clause seeks to provide that Sentech is the common carrier; it
further seeks to clarify that radio frequency should be assigned to
the ECNS licensee that performs the signal distribution; it seeks to
ensure that the common carrier provides signal distribution in
accordance with the national radio frequency plan and submits
tariffs for approval.

2.29 Substitution of sections 65 and 66 of Act 36 of 2005

These clauses contain amendments requested by ICASA in line with
recommendations made by the Authority under sections 65(7), 66(1) and 66(7)
of the Act. The recommendations follow the publication by ICASA of a
Discussion Document on Ownership and Control on 17 November 2009. Public
hearings were held from 05 to 07 May 2010 and a Findings Document published
on 15 September 2011. The Minister must table the recommendation in the
National Assembly. The National Assembly also determines the limitations on
cross-media control, and has to consult with the Minister. The amendments
as proposed by ICASA have been included in the Bill to facilitate the
consideration thereof by the National Assembly.

2.30 Amendment of section 67 of Act 36 of 2005

This clause seeks to delete subsections (1) to (3) to ensure a clear
demarcation between ex-ante regulation, being the preserve of ICASA and ex-
post regulation, being within the Competition Commission's domain; it
further seeks to rewrite subsections (4) to (7) to make it clear that will
assist ICASA in implementing the competition matters regulatory regime set
out in Chapter 10.

2.31 Amendment of section 68 of Act 36 of 2005

This clause seeks to remove a redundant timeframe.

2.32 Amendment of section 72 of Act 36 of 2005

It is proposed that section 72 be amended to ensure that the public can
access government directory and information services free of charge. The
amendment is required to reflect government directory and
information services. This is a service that is currently provided by SITA
on behalf of DPSA. The four digit number allocated for this as per s. 72(6)
is 1020. The call centre handles calls for government information, queries
and directory and related services. Currently because section 72(7) refers
to government directory information services, the cost is carried by DPSA
that was not the initial intention. The wording should be changed to
"government directory information and related services" to close the
loophole and oblige operators to carry these communications to the centre
free of charge.

2.33 Insertion of section 72A in Act 36 of 2005

This clause seeks to empower the Minister to establish a Broadband
Inter-Governmental Implementation Committee as contemplated in the
Broadband Policy for South Africa, Government Gazette 33377, 13 July 2010
to advise the Minister on broadband policy and implementation; it further
describes the functions of the Committee.

2.34 Amendment of section 73 of Act 36 of 2005

It is proposed that section 73 be amended further to assist with the
enforcement of the e-rate provisions. It is necessary to make it clear when
an ECS licensee should give the discount and when the ECS licensee is
entitled to a discount from the ECNS licensee. A problem is also
experienced due to ISPs that do not want to give the 50% discount to USAASA
when USAASA pays the charge on behalf of a school. A new subsection is
proposed to make it clear that USAASA can pay a charge on behalf of a
school and will in such instance be entitled to the 50% discount.

 

[ellipsis]

Memorandum cont...

2.35 Amendment of section 74 of Act 36 of 2005

This clause creates certain offences related to the Universal Service
and Access Agency of South Africa and sets out the penalties that may be
imposed.

2.36 Insertion of section 79A in Act 36 of 2005

This clause seeks to ensure that the State and persons employed at 112
Emergency Centres, do not attract liability when performing an act in good
faith and in accordance with the law.

2.37 Insertion of section 79B in Act 36 of 2005

A new clause 79B seeks to enable access to information held by ICASA or
USAASA for the purposes of the performance of the functions of the
Minister.

Lack of information hampers a number of functions including impact
assessment and monitoring, compilation of relevant statistics, provision of
updated information to the ITU etc.

2.38 Amendment of section 80 of Act 36 of 2005

This clause seeks to make it clear that USAASA is subject to the Public
Finance Management Act, 1999.

2.39 Insertion of section 80A in Act 36 of 2005

This clause seeks to expand the current provisions in the Act on the
composition of the USAASA Board and makes it clear that the Board is
responsible for the affairs of the Agency.

2.40 Amendment of section 81 of Act 36 of 2005

This clause seeks to improve the functions of the USAASA Board
especially from a governance perspective.

2.41 Insertion of sections 81A to 81F in Act 36 of 2005

This clause seeks to make provision for the disqualification from
membership of the USAASA Board, appointment of non-executive members of the
Board, resignation, removal from office and vacancies, fiduciary duty and
disclosure, committees of the Board, delegation and assignment of functions
by the Board.

2.42 Amendment of section 82 of Act 36 of 2005

a) The amendment of section 82 and definitions seek to remove
contradictions between section 82 and the definitions of universal
access and service to ensure that broadcasting is also included.

b) 'Universal access' is defined in the EC Act as "universal access to
electronic communications network services, electronic
communications services and broadcasting services, as determined
from time to time in terms of Chapter 14". Section 82(3)(a)(i)
provides that the Minister must determine what constitutes universal
access by all areas and communities to ECS and ECNS. There is no
mention of BS like there is in the definition of universal access
itself. The amendments to this section seek to correct this
inconsistency.

c) The same applies for 'universal service'.

2.43 Deletion of sections 83 of Act 36 of 2005

This clause seeks to delete section 83 due to new provisions in
sections 83A to 83F on the appointment of the CEO and staff of USAASA.

2.44 Insertion of sections 83A to 83F in Act 36 of 2005

This clause seeks to provide provisions on the appointment of the Chief
Executive Officer of USAASA, conditions of appointment, termination of
employment, acting chief executive officer, delegation of authority, and
staff of the Agency. It further seeks to remove provisions that conflict
with the responsibility of the Board to manage the affairs of the Agency.

2.45 Insertion of sections 86A to 86B in Act 36 of 2005

a) These clauses empower the Minister to appoint a person to
investigate the affairs or financial position of the Agency and
compliance by the Agency with the Act. It further obliges the Agency
or an employee of the Agency to provide the Minister or a person
authorised by the Minister with such information, books, accounts,
documents and assets of the Agency as the Minister or the authorised
person may require.

b) It further authorises the Minister under certain circumstances to
issue directives requiring the Agency to take action specified by
the Minister. A directive may for example be issued if the Agency is
in financial difficulty, if it is mismanaged, or if it fails to
perform its functions effectively and efficiently. The clause also
seeks to empower the Minister to replace the members of the Board or
to appoint an administrator to take over certain functions of the
Board if the Board fails to comply with the directive. The Minister
is also empowered to dissolve the Board if, on good cause shown, the
Minister loses confidence in the ability of the Board to perform its
functions effectively and efficiently.

2.46 Amendment of section 87 of Act 36 of 2005

This clause seeks to correct the reference to section 185 in stead of
section 213 of the Constitution regarding the National Revenue Fund; it
further makes it clear that USAASA can collect the Universal Service Fund
contributions.

2.47 Amendment of section 88 of Act 36 of 2005

This clause seeks to correct reference to 'electronic communications
network services', 'electronic communications services' and 'broadcasting
services' in the context of subsidies that may be paid out of the Universal
Service and Access Fund; it ensures that the contradiction between
subsection (1)(c) and (d) are removed by making subsidies payable to all
public schools; it further seeks to empower the Minister, acting with the
concurrence of the Minister of Finance, to prescribe additional uses of
money in the Universal Service and Access Fund from time to time; it seeks
to enable USAASA to create application procedures for persons to apply for
subsidies from the USAF for all of the purposes for which funds may be
distributed under section 88(1), and distribution procedures, at least
every two years; it seeks to change ICASA's obligation to review the
definition of under-serviced area every two years instead of bi-annually;
it further seeks to enable USAASA to make recommendations to the Minister
every two years to determine the meaning of needy persons.

2.48 Amendment of section 89 of Act 36 of 2005

This clause seeks to empower USAASA to collect all money that is due
and payable to the Universal Service and Access Fund.

2.49 Deletion of sections 92 to 93 of Act 36 of 2005

ICASA proposed the deletion of these two sections since license
conversion is complete, and these sections bear no significance.

2.50 Amendment of section 95 of Act 36 of 2005

This clause seeks to amend section 95 to enable ICASA to repeal or
amend existing regulations under related legislation by removing the
prohibitive 24-month time-frame. This amendment is necessary as the current
provision prohibits ICASA from repealing or amending regulations issued
under now repealed Acts, as the 24-month period from the commencement date
of the Act, has passed.

2.51 Short title

This clause provides the name of the Act and seeks to provide that
different dates may be fixed for the coming into operation of different
sections of this Act by Notice in the Gazette. This provision is necessary
to ensure that the amendments relevant to Chapter 5 of the Act only come
into operation once a Spectrum Management Agency has been established under
legislation prepared for this purpose.

 

[Paul Hjul]

I've read over the Bill at least 6 times and every time I get to the same point of frustration:
There are dozens of competing and conflicting processes pertaining to overhauling the ICT sector, against such a backdrop passing an amendment bill that doesn't address a gaping hole in an urgent fashion seems contrived and detrimental to every one of these overhaul processes. Of course I am particularly frustrated because without high hopes we are waiting for further announcements on the ICT Policy Review Panel.
The creating a spectrum management agency is going to mean new regulations and new delays and represents a major shift in regulatory dynamics and we simply don't have an explanation for what and who is behind this agenda.


Some of the hitches I have picked up the legislation:
[1] Weaselling Sentech in seems superficial and dangerous - should any individual player in the market be legislatively addressed in the licensing framework? Should we not be moving to less rather than more special statutory provisions pertaining to individual SOEs - IIRC and understand the 2008 Companies Act correctly the idea is to move away from a Sentech Act.

[2] The tightening of section 35 to include possession could if not offset by another legal provision somewhere be really harmful to SA's cargo and shipping industry - I haven't bothered to look into the principal act to check what the exception clauses provide for, but the basic worry I have is that government is trying to make things too water tight but are actually just putting planks on the hull - making the ship heavier and possibly damaging its integrity and ultimately less seaworthy; the opposite of watertight.

[3] The tampering with the sections pertaining to interconnections and facilities leasing seem to be premised on difficulties or perceived difficulties with the Chapter 10 market investigation processes. What is worrying is that rather than seeing the authority being able to act to promote competition without having to establish market dominance these amendments will give somebody (the minister, icasa ...) a free hand to pass an exemption for a certain fixed line operator.

[4] Many of the provisions affect existing right holders, many of whom have deep purses and a smell for litigation by attrition. ICASA truly seems to be without legal capacity. This is a recipe for disaster.

 

[chrisc]

So this is what ICASA have been doing with their time! After a 10 min read I would say that these provisions go beyond the scope of what ICASA has been mandated to do.

Is not spectrum management central to what ICASA have been tasked to do for some time?

 

[AvatarS]

So this is what ICASA have been doing with their time! After a 10 min read I would say that these provisions go beyond the scope of what ICASA has been mandated to do.

Is not spectrum management central to what ICASA have been tasked to do for some time?

This is from the DoC, not ICASA...

Please have a read of post #4 for clarity on spectrum management.

 

[ellipsis]

Definition of "broadband"

Proposed new definition to be inserted into the ECA:

"'broadband' means an always available, multimedia capable connection with a minimum download speed as determined by the Minister from time to time by Notice in the Gazette;";

From the Memorandum

A new definition of broadband is proposed. Even though the definition in paragraph 1.3.3 of Broadband Policy for SA, GG33377, 13 July 2010 indicates a broadband speed of 256kbps, it is understood that EXCO decided that it must be left open to determine from time to time

For background see http://mybroadband.co.za/news/broadband/55611-broadband-definition-more-malleable-in-sa.html

Any issues with this?

 

[ellipsis]

Restriction of infrastructure rights

Proposed in the Bill:

Section 20 of the principal Act is hereby amended

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

"(1) This Chapter applies only to specific electronic
communications network service licensees as prescribed by the
Authority.";

(b) by the insertion after subsection 2 of the following subsection:

"(3) The Authority must prescribe how electronic communications
network service licensees must exercise their rights and obligations under
this Chapter and may impose conditions and obligations on licensees in the
exercise of such rights and obligations, in accordance with the policy and
policy directions, if any, contemplated in section 21, within eighteen (18)
months of the coming into operation of the Electronic Communications
Amendment Act, 2012.".

Why?

Following the Altech judgement, a significant number of former Value Added Network Service licenses were converted to ECNS licenses with accompanying right of way rights under Chapter 4. The section 20 amendment seeks to limit the application of Chapter 4 to specific ECNS licensees as prescribed by the Authority since it is currently impractical; it also seeks to make better provision for the regulation of ECNS licensees that exercise any rights and obligations under this Chapter.

See - http://mybroadband.co.za/news/telecoms/55537-hard-won-network-operator-rights-under-threat.html

....sure we can get lots of comment on this one

 

[ellipsis]

Facilitating roll-out of infrastructure

Since the coming into effect of the ECA in 2006 the Department of Communications has completely failed to get to grips with the work it is required to do under section 21 of the ECA:

[quote = section 21 ECA as it exists]21. Guidelines for rapid deployment of electronic communications facilities

(1) The Minister must, in consultation with the Minister of Provincial and Local Government, the Minister of Land Affairs, the Minister of Environmental Affairs, the Authority and other relevant institutions, develop guidelines for the rapid deployment and provisioning of electronic communications facilities.

(2) The guidelines must provide procedures and processes for -

(a) obtaining any necessary permit, authorisation, approval or other governmental authority including the criteria necessary to qualify for such permit, authorisation, approval or other governmental authority; and

(b) resolving disputes that may arise between an electronic communications network service licensee and any landowner, in order to satisfy the public interest in the rapid rollout of electronic communications networks and electronic communications facilities.[/quote]

AFAIK the Minister has shoveled the responsibility for this to ICASA. ICASA in turn indicated in its medium term strategic framework that it would supply recommendations on the required Guidelines to the Minister by 30 June 2012. There has been significant effort made by ICASA and SALGA but no recommendations and now it looks as if the game is going to change.

There may just be a small amount of irony in the proposal to limit infrastructure rights to only some ECNS licensees because there are too many and managing them is "impractical" when, in reality, the work to facilitate the exercise of these rights simply has not been done.

Anyway....now proposing to amend section 21 as follows:

(a) by the substitution for the heading of the following heading:

"21. [Guidelines for rapid] Rapid deployment of
electronic communications facilities.-";

(b) by the substitution for subsections 1 and 2 of the following
subsections:

"(1) The Minister must, in consultation with the Minister of
[Provincial and Local Government] Cooperative Governance &
Traditional Affairs, the Minister of [Land Affairs] Rural
Development & Land Reform, the Minister of Water and
Environmental Affairs, the Authority and other relevant institutions,
develop [guidelines] a policy and policy directions for the
rapid deployment and provisioning of electronic communications
facilities, following which the Authority must prescribe
regulations.

(2) The [guidelines] regulations must provide procedures
and processes for-

(a) obtaining any necessary permit, authorisation, approval or other
governmental authority including the criteria necessary to qualify
for such permit, authorisation, approval or other governmental
authority; and

(b) resolving disputes that may arise between an electronic
communications network service licensee and any landowner, in order
to satisfy the public interest in the rapid rollout of electronic
communications networks and electronic communications facilities.";

(c) by the insertion after subsection 2 of the following subsection:

"(3) The policy and policy directions contemplated in subsection (1)
must be made within twelve (12) months of the coming into operation of the
Electronic Communications Amendment Act, 2012."

Due to the critical importance of the provision in section 21 on the Guidelines for the rapid deployment of electronic communications facilities especially for broadband roll-out, it should be considered how to best give full effect to it. This clause seeks to replace guidelines with policy and policy directions made by the Minister to remove the uncertainty on the status of guidelines. It further enables ICASA to prescribe regulations to
give effect to the policy and policy directions..

Comments? Will the proposed amendments make any difference?

Members with a deeper interest in this aspect of the Bill may also want to look at these two cases
- SMI Trading CC v Mobile Telephone Networks (Pty) Ltd and Others (3013/09) [2011] ZAGPJHC 7; 2012 (2) SA 642 (GSJ) (15 February 2011): case involving MTN's right to maintain a base station on the land of someone who does not want it there. Note that this has been appealed to the Supreme Court of Appeal - to be heard on 7 September 2012.
- Kwazulu Natal South African Road Agency Ltd v Telkom SA Ltd (8131/2009) [2010] ZAKZPHC 88 (25 October 2010)

 

[ellipsis]

Spectrum Management Agency

See http://mybroadband.co.za/news/telecoms/55503-spectrum-responsibility-shuffle-on-the-cards.html

will create a separate thread for this one

 

[ellipsis]

I've read over the Bill at least 6 times and every time I get to the same point of frustration:
There are dozens of competing and conflicting processes pertaining to overhauling the ICT sector, against such a backdrop passing an amendment bill that doesn't address a gaping hole in an urgent fashion seems contrived and detrimental to every one of these overhaul processes.

100% agree - very difficult to navigate one's way through the different processes. An amendment to the ECA while we await for a Green Paper on a new communications policy is tricky, especially where the Bill deals with policy issues such as restricting infrastructure rights and the creation of a Spectrum Management Agency.

If the Bill restricted itself to fixing technical issues as well as practical difficulties experienced by ICASA in the implementation of the provisions relating to interconnection, facilities leasing and competition this would not be such an issue.

Of course I am particularly frustrated because without high hopes we are waiting for further announcements on the ICT Policy Review Panel.

don't wait, rather resolve to be surprised if anything actually happens....

The creating a spectrum management agency is going to mean new regulations and new delays and represents a major shift in regulatory dynamics and we simply don't have an explanation for what and who is behind this agenda.

I agree there will be delays etc which we can hardly afford in addition to the delays already experienced but I am not convinced that this aspect constitutes a "major shift" in regulatory dynamics. Will cover this in the relevant thread.

Some of the hitches I have picked up the legislation:
[1] Weaselling Sentech in seems superficial and dangerous - should any individual player in the market be legislatively addressed in the licensing framework? Should we not be moving to less rather than more special statutory provisions pertaining to individual SOEs - IIRC and understand the 2008 Companies Act correctly the idea is to move away from a Sentech Act.

agree with the principle. please expand on the Companies Act point.

[2] The tightening of section 35 to include possession could if not offset by another legal provision somewhere be really harmful to SA's cargo and shipping industry - I haven't bothered to look into the principal act to check what the exception clauses provide for, but the basic worry I have is that government is trying to make things too water tight but are actually just putting planks on the hull - making the ship heavier and possibly damaging its integrity and ultimately less seaworthy; the opposite of watertight.

will look at this

[3] The tampering with the sections pertaining to interconnections and facilities leasing seem to be premised on difficulties or perceived difficulties with the Chapter 10 market investigation processes. What is worrying is that rather than seeing the authority being able to act to promote competition without having to establish market dominance these amendments will give somebody (the minister, icasa ...) a free hand to pass an exemption for a certain fixed line operator.

We think these amendments are well-intentioned and they are indeed based on suggestions made by ICASA due to difficulties it has experienced in implementing the provisions relating to interconnection/facilities leasing/competition. The idea seems to be to simplify section 67 in particular and make it easier for ICASA to use this section to impose pro-competitive conditions, including pricing obligations. Will still need to examine the proposed amendments in detail to assess whether this intention is achieved.

Cannot see that the amendments give greater latitude to exempt Telkom - in fact read this as the opposite, i.e. they will make it easier to deal with some of Telkom's conduct as well as with the MNOs. Imposing pro-competitive obligations is a significant intervention into the market and there needs to be evidence of market failure and an assessment of the dynamics of the market before these can be imposed.

[4] Many of the provisions affect existing right holders, many of whom have deep purses and a smell for litigation by attrition. ICASA truly seems to be without legal capacity. This is a recipe for disaster.

The proposed restriction of infrastructure rights is unlikely to pass muster. Other than that we will have to wait for the Bill to be finalised before making a call on the need for litigation.

 

[Paul Hjul]

don't wait, rather resolve to be surprised if anything actually happens....

My wager is on a bad panel rather than no news.

I agree there will be delays etc which we can hardly afford in addition to the delays already experienced but I am not convinced that this aspect constitutes a "major shift" in regulatory dynamics. Will cover this in the relevant thread.

I am possibly over-estimating the impact of the spectrum management agency and possibly falling into a nomenclature trap arising from the term authority and agency. An authority can basically be a hat whilst to me to speak of an agency is to consider a structure that has staff and permanence and stuff. There is also an idea that an authority makes decisions an agency executes them on behalf of (as an agent of) the authority.

Currently the DoC houses the South African Accreditation Authority, which I don't think even has a permanent member of staff. My understanding of the current situation is that the Minister is the Authority on spectrum and ICASA (despite having authority in its name) the agency administering this.

agree with the principle. please expand on the Companies Act point.

I haven't interrogated the old Companies Act (its a bit of a pesky witness ) but the new Act clearly accommodates SOE as a special standing status issue requiring IIRC that SOE being included in the name of the enterprise. A uniform handling is clearly envisaged and I don't imagine we will be seeing the old way of "The provisions of the Companies Act shall apply where applicable" being the basis of SOEs corporate governance. Of course the 2008 Companies Act - as well as the monsterously large amendment act (at least I think it was an Act) to fix errors in the Act - and its regulations is another subject of aaaargggg regulation mess.

We think these amendments are well-intentioned and they are indeed based on suggestions made by ICASA due to difficulties it has experienced in implementing the provisions relating to interconnection/facilities leasing/competition. The idea seems to be to simplify section 67 in particular and make it easier for ICASA to use this section to impose pro-competitive conditions, including pricing obligations. Will still need to examine the proposed amendments in detail to assess whether this intention is achieved.

Cannot see that the amendments give greater latitude to exempt Telkom - in fact read this as the opposite, i.e. they will make it easier to deal with some of Telkom's conduct as well as with the MNOs. Imposing pro-competitive obligations is a significant intervention into the market and there needs to be evidence of market failure and an assessment of the dynamics of the market before these can be imposed.

I certainly think that the Bill would make it easier to deal with Telkom and the MNOs, my worry is that the language of section 44 in the amended act could backfire.

Basically section 28(a) of the amended Act allows the facilities leasing regulations to exempt ECNS licensees from the obligation to lease. It excises the requirement that the authority had to have "not found, in terms of Chapter 10, such electronic communications network service licensees to have significant market power in the relevant market or market segment".
What is being excised is clumsy and really really problematic but what is left to me reads like a licence to structure the Facilities Leasing Regulations to exclude certain things on novel grounds. The ADSL system (however we want to put it) as a service doesn't need to be put up for lease because it will kill jobs sort of argument is what worries me.

 

[Paul Hjul]

don't wait, rather resolve to be surprised if anything actually happens....

My wager is on a bad panel rather than no news.

I agree there will be delays etc which we can hardly afford in addition to the delays already experienced but I am not convinced that this aspect constitutes a "major shift" in regulatory dynamics. Will cover this in the relevant thread.

I am possibly over-estimating the impact of the spectrum management agency and possibly falling into a nomenclature trap arising from the term authority and agency. An authority can basically be a hat whilst to me to speak of an agency is to consider a structure that has staff and permanence and stuff. There is also an idea that an authority makes decisions an agency executes them on behalf of (as an agent of) the authority.

Currently the DoC houses the South African Accreditation Authority, which I don't think even has a permanent member of staff. My understanding of the current situation is that the Minister is the Authority on spectrum and ICASA (despite having authority in its name) the agency administering this.

agree with the principle. please expand on the Companies Act point.

I haven't interrogated the old Companies Act (its a bit of a pesky witness ) but the new Act clearly accommodates SOE as a special standing status issue requiring IIRC that SOE being included in the name of the enterprise. A uniform handling is clearly envisaged and I don't imagine we will be seeing the old way of "The provisions of the Companies Act shall apply where applicable" being the basis of SOEs corporate governance. Of course the 2008 Companies Act - as well as the monsterously large amendment act (at least I think it was an Act) to fix errors in the Act - and its regulations is another subject of aaaargggg regulation mess.

We think these amendments are well-intentioned and they are indeed based on suggestions made by ICASA due to difficulties it has experienced in implementing the provisions relating to interconnection/facilities leasing/competition. The idea seems to be to simplify section 67 in particular and make it easier for ICASA to use this section to impose pro-competitive conditions, including pricing obligations. Will still need to examine the proposed amendments in detail to assess whether this intention is achieved.

Cannot see that the amendments give greater latitude to exempt Telkom - in fact read this as the opposite, i.e. they will make it easier to deal with some of Telkom's conduct as well as with the MNOs. Imposing pro-competitive obligations is a significant intervention into the market and there needs to be evidence of market failure and an assessment of the dynamics of the market before these can be imposed.

I certainly think that the Bill would make it easier to deal with Telkom and the MNOs, my worry is that the language of section 44 in the amended act could backfire.

Basically section 28(a) of the amended Act allows the facilities leasing regulations to exempt ECNS licensees from the obligation to lease. It excises the requirement that the authority had to have "not found, in terms of Chapter 10, such electronic communications network service licensees to have significant market power in the relevant market or market segment".
What is being excised is clumsy and really really problematic but what is left to me reads like a licence to structure the Facilities Leasing Regulations to exclude certain things on novel grounds. The ADSL system (however we want to put it) as a service doesn't need to be put up for lease because it will kill jobs sort of argument is what worries me.

 

[ellipsis]

Deadline for submissions: 14 September 2012
Internal deadline for contributions: 20h00 Friday 7 September 2012

Deadline extended.

 

[Paul Hjul]

*breathes massive sight of relief. When did this happen?

 

[ellipsis]

Hi Paul,

It happened the day before the deadline.

 

[ellipsis]

Speaking of deadlines... any comments on this? Is it worthwhile doing a mybb response?