Telecoms showdown
Uncertainty over the precise meaning of certain 2004 Ministerial Determinations by Communications Minister Dr Ivy Matsepe-Casaburri has led to a dramatic showdown set to take place at the Pretoria High Court next week between VANS licensee, Altech Autopage Cellular on the one side and ICASA on the other.
In April 2008 an application was made by Altech Autopage Cellular to interdict the ICASA-regulated Electronic Communications Act (ECA) license conversion process insofar as such process was dealing with the conversion of Value-Added Network Service (VANS) licenses to ECA-type Individual Electronic Communication Network Service (I-ECNS) licenses.
The ECA specifically mandated ICASA to carry out the conversion of all telecommunication and broadcasting licenses issued under the old Telecommunications Act within 24 months after the promulgation of the ECA (with an option to extend if necessary by a maximum of a further six months).
The conversion process in respect of VANS licensees effectively began in 2007, and after a number of about-turns and changes in the process, public hearings were held in March 2008. At these hearings those VANS licensees wishing to have their licenses converted to I-ECNS licenses made representation to ICASA.
It was not long thereafter that Autopage Cellular, apparently having been led to believe that it was not likely to be successful in having its VANS license converted into an I-ECNS, lodged a High Court Application against ICASA.
The intended effect of this application was two-fold. Firstly it was to stop the ICASA VANS license conversion process. Secondly it was to obtain a court order to the effect that VANS licensees could from 1 February 2005 self-provide (which means that VANS were not obliged to source underlying telco network facilities/infrastructure from Telkom or some other PSTS licensee such as Neotel).
Importantly, the effect of the latter decision by a court, Autopage Cellular argued, would render the entire conversion process from VANS license to I-ECNS license redundant and immaterial. This because if VANS licensees could self-provide, then the license category to which they should automatically be converted under the ECA conversion process should be to that of an I-ECNS license (the telecommunications license which includes the provision of network infrastructure provisioning).
As such, following Autopage Cellular’s logic, the conversion process did not grant ICASA any discretion in converting VANS to I-ECNS licenses, as all VANS licensees should have a right to an I-ENCS license.
At the end of April ICASA gave Autopage Cellular an undertaking that the VANS license conversion process would be suspended until such time as all the matters in Autopage Cellular’s application were considered by the High Court. The process was thereafter put on hold and the Autopage Cellular application was set down to be heard in the Pretoria High Court from 29-31 July 2008.
Autopage Cellular’s application is opposed by ICASA, the Department of Communications and a small number of VANS industry players who wish the license conversion process to be allowed to continue unhindered.
ICASA and the DOC appear to take the view that VANS licensees have never been entitled to self-provide (and the entire argument of Autopage Cellular relating to automatic license conversion is thus negated).
In its response to Autopage Cellular’s application, ICASA also appears to be of the view that it may ultimately reverse the VANS-related license conversion process and replace it with an "invitation-to-apply" (ITA) process whereby certain VANS licenses are invited to apply for an I-ECNS license, but there is no conversion from a pre-existing license. The Minister of Communications has indicated that this is also her preference.
Regardless of the outcome of next week’s hearing, there is no doubt that it will be of great significance to the VANS industry and to the ongoing liberalisation and deregulation of the telecommunications industry in South Africa.
The future telecommunications landscape is in many ways dependant on decisions coming out of these hearings. One can only hope that such decisions do indeed recognise the critical need for further deregulation of the industry and the freeing up of resources to enable the rapid reduction in telecommunication costs going forward.
While CUASA would like to see the conversion process proceed in order to allow incremental competition in the market, we also understand and sympathise with Autopage Cellular’s position. The Minister’s 2004 Ministerial Determinations were widely interpreted to mean that VANS would be able to self-provide and to our knowledge this interpretation has neither been officially retracted, nor has it been tested.
Should Autopage Cellular’s hearing be successful, all VANS may well be entitled to self-provide under the ECA – leading to real and effective communications competition in South African. CUASA, and no doubt most of the telecoms industry in South Africa, will be monitoring next week’s court proceedings with considerable interest.
VANS license conversion discussion
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