Telecoms law needs some tuning
The act will come into effect at a date to be proclaimed by the president. One reason for the delay is that the Independent Communications Authority of SA (Icasa) Amendment Bill has not yet been passed.
This has been sent back to Parliament after serious concerns were raised about its constitutionality. In addition, the act requires Icasa to overhaul the net of regulations and licences that support the new framework.
Much groundwork, therefore, remains to be done before the act can become operational. We suggest that it is several years away from that.
The act aims to open up competition through reforming the licensing framework, and expanding the powers of Icasa so as to introduce measures to stop abuses of dominance before they happen.
On the licensing framework front, one of the shortcomings of the present Telecommunications Act is that services are licensed separately in accordance with the platforms (fixed line and cellular) they use.
There is also a discrepancy in the way similar services have been regulated under the telecommunications and broadcasting legislation. Thus, for example, there are no restrictions on the number of broadcasting network operators who could provide signal distribution. This is in contrast to telecommunications, where there are tight restrictions on facilities-based competition.
The act seeks to introduce a single, platform-neutral licensing regime. It proposes two generic licence categories for communications infrastructure services:
Electronic communications network services, which entail the right to operate a network, whether it be a telecommunications or a broadcasting signal distribution network; and
Electronic communications services, which involve the right to provide connectivity over a network.
This is to be welcomed. Under the Telecommunications Act, whenever a new service cropped up that the drafters did not anticipate, Icasa needed to prescribe a new licence category. The ensuing administrative delays and controversies often resulted in new services simply not being licensed.
The act cuts through all of this. It is also designed to simplify the licensing regime. It falls short of this goal, though, mainly because it gets the class licensing regime wrong.
The Electronic Communication Act recognises three methods for authorising service providers in the market: individual licences, class licences and licence exemptions. The difference between them is that:
Individual licences require the regulator’s approval before a service provider can commence operations;
Class licences should not require the regulator’s approval, but many jurisdictions require service providers to notify the regulator before setting up shop; and
Licence exemptions refer to activities that may be provided without advance approval or notification.
The introduction of a class licence is a key feature of the new act. One of the problems with the Telecommunications Act is that it, in effect, requires all telecommunication service providers to obtain Icasa’s individual approval — even in the case of smaller value-added network service providers and private telecommunication network providers. This has clogged up Icasa’s administrative machinery.
Unfortunately, the class licensing regime under the new act does not remedy the problem. The act still requires class licensees to apply to Icasa for approval. This, in effect, amounts to an individual licensing regime. Failure to remedy the problem represents an opportunity missed.
The act precludes Icasa from including any monopoly or exclusionary rights in any licence, which is good news for competition. Yet certain issues may slow the process. One is that Icasa may consider and grant applications for individual electronic communications network services licences only on the basis of a policy directive issued by the communications minister.
A consequence of this is that the time line for the introduction of new network operators remains a matter of ministerial discretion, as opposed to being determined in the act.
Another very curious feature of the act is that it requires all entities that provide voice telephony using numbers from the national numbering plan to apply to Icasa for an individual electronic communication service licence, even if they are resellers.
This will make it more difficult, although not impossible, to obtain a licence to provide voice services.
Another of the act’s far-reaching implications is that it allows Icasa to impose procompetitive obligations on all service providers who wield significant market power. This is conceptually very different from the Telecommunications Act, where the main target of regulation was Telkom.
When the Telecommunications Act was passed in 1997, the drafters did not anticipate the subsequent explosive growth of cellular telephony. Neither did the drafters foresee that the cellular network operators would acquire the degree of market power that they hold. As a result, cellular network operators were under regulated.
Under the new act, Icasa will be able to impose a number of procompetitive measures on significant market power providers, among them the obligation to act fairly in response to requests for interconnection and facilities leasing; not to discriminate; and to charge cost oriented prices.
One gaping hole is that the act does not recognise a broad concept of access. By concentrating on interconnection and facilities leasing, it neglects other forms of access, including collocation, which is the sharing of sites, ducts and so on.
Other elements of the access regime, such as access to rights of way, are simply unworkable. The act grants blanket rights of way to network operators which wish to construct their own networks, rights that are not environmentally sustainable in a multi-operator environment.
Overall, the act is undoubtedly welcome. Nevertheless, there are problems that demand a comprehensive policy-making process before passing a statute of this magnitude into law. These problems will need to be ironed out over time by way of a further parliamentary process.
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