DA slates ECA Amendment
“South Africa would not have faced a problem with a lack of competition in the infrastructure layer now if the Electronic Communications Act had not contained the one section we opposed in that law,” Dene Smuts said when the EC Amendment Bill was passed in the National Assembly in November.
“The ECA is Parliament’s law. It is specifically our law, too. We reconceptualised and redrafted the Convergence Bill of 2005 into a law that dealt not only with convergence, but also opened the sector up to competition.”
“However, section 5 (6) is a red robot. It prevents Icasa from issuing invitations to apply for network licences above a certain scope until our Honourable Minister issues policy directions, not only for big networks, but also for any licence in which a state-owned entity holds 25% or more,” said Smuts.
“The light has remained resolutely red, but now enters the Honourable Public Enterprises Minister Alec Erwin, to turn the light from red to green. Unfortunately, he did so by using the only entities over which he holds sway, the State Owned Enterprises.”
The case for liberalisation in telecoms is conclusive. But ‘Telephone Minister Number Two’, as Smuts nicknamed him, made proposals on terrestrial fibre optic which sounded as if they had the potential to break the bottleneck in terrestrial backbone facilities.
“Infraco could not simply be deemed a licence under its own Act for legal reasons, but also because it had to fit the pro-competitive logic of the ECA. It had to be brought into Icasa’s domain,” said Smuts.
“The amending bill tabled by the Minister of Communications brought it into her own domain rather than the regulator’s. It created an effective parallel licensing regime under which she could emulate the Public Enterprise Minister and licence her own SOEs.
The Communications Committee has instead placed this provision within the ECA’s policy direction-making section, where it is automatically subject to checks and constraints. The regulator has the final say.”
Smuts said that it remains regrettable that this amendment does not open the Invitation to Apply (ITA) up to private sector entities that wish to build infrastructure. It is no more than a form of damage control against the ambitions of both telephone ministers. It limits these State licences to infrastructure, and the intentions of the amending Bill to make possible only wholesale, cost-related offerings are spelt out.
“Networks of provincial scope can still be built as of right under the ECA. We can only hope the State networks do not discourage large-scale private sector infrastructure. We do not want a return to state telecoms. What we need is not the competition between two Ministers which we are going to get – they are already competing with undersea cables – but real, open competition,” said Smuts.
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