How ANC municipality nearly stopped fibre broadband rollout

The Supreme Court of Appeal recently ruled in favour of Dark Fibre Africa (DFA) in a case involving the roll out of fibre in the Msunduzi Municipality, also known as Pietermaritzburg. The importance of this ruling for broadband in South Africa is significant.

To understand why this case is so important, it is necessary to look back at what happened over the last two years.

In 2012 DFA submitted wayleave applications to the Msunduzi Municipality to roll out a fibre network in Pietermaritzburg. The applications were never approved.

DFA CEO Gustav Smit explained that they tried to work with the municipality, but “after months and months” they had no choice but to start construction.

In November 2013, DFA started construction of its fibre network in Pietermaritzburg without any wayleave approvals. This was possible because of the rights given to DFA in section 22 of the ECA (Electronic Communications Act) as an electronic communications network licensee:

An electronic communications network service licensee may –
(a) enter upon any land, including any street, road, footpath or land reserved for public purposes, any railway and any waterway of the Republic.
(b) construct and maintain an electronic communications network or electronic communications facilities upon, under, over, along or across any land, including any street, road, footpath or land reserved for public purposes, any railway and any waterway of the Republic.

“We will adhere to everything else, but if they do not want to sign off a wayleave we were going to use the rights afforded to us to build our networks,” said Smit.

The Msunduzi Municipality was not happy, and confiscated DFA and DFA’s contractor’s equipment used for the fibre network rollout.

MyBroadband asked the Msunduzi Municipality why it did not provide DFA with wayleave permissions in a timely manner.

It said that “the sheer volume of applications received from service providers, including those exercising their rights in terms of Section 22 of the ECA, meant that the municipality had to introduce a policy framework to protect the existing infrastructure and others affected by the intended wayleaves”.

First legal battle

The Msunduzi Municipality applied for a restraint to prevent DFA from conducting construction work on municipal property.

In April 2014 the High Court in Pietermaritzburg dismissed this application with costs. The judgement highlighted some interesting facts.

The court papers included an August 2013 circular from the Msunduzi Municipality which stated that “all wayleaves issued since the 1st January 2013 are null and void and must be terminated with immediate effect”.

According to the judgement it was “evident that such [wayleaves] permits … would in all likelihood not have been granted”.

With this favourable ruling DFA was allowed to continue trenching, but this was not the end of the story. The Msunduzi Municipality appealed the ruling in the Supreme Court of Appeal.

Second legal battle

On 1 October 2014 the Supreme Court of Appeal (SCA) dismissed the municipality’s appeal. The SCA held that licensees under the Electronic Communications Act do not require permission from a local authority to exercise their rights under section 22 of the ECA.

“In this case the municipality had not made out any case that DFA had failed to comply with laws, practices, and procedure applicable in the construction underway,” the SCA ruled.

The court further said that the Msunduzi Municipality had “repeatedly refused to cooperate with DFA for approval of the plan of construction, including agreement on conditions on which construction would proceed”.

Why this was important

By winning the two legal battles, DFA paved the way for fibre network operators to be able to roll out networks without having to deal with possible problems at a municipal level.

“This ruling is not only a win for Dark Fibre Africa, but for the industry as a whole,” said DFA’s Tshego Distshego.

“We hope that it will enable more beneficial engagement between telecommunications operators and the various municipalities across South Africa in future.”

What should be of concern to everyone is that DFA was rolling out this network for an ANC government department to link up universities.

The Msunduzi Municipality was therefore trying to stop DFA from rolling out a government and educational network, which would have directly benefited organisations in its municipal area.

DFA CEO Gustav Smit explained the situation as follows: “If we were not allowed in the city, no one else would have been allowed in the city either. This means that Pietermaritzburg would never have fibre”.

What was behind this legal battle?

One of the possible reasons for the Msunduzi Municipality’s opposition to DFA’s fibre rollout is that the municipality may have wanted to build its own fibre network.

However, this may have left the municipality with only one fibre network. “As an industry we do not want only one player in any city or town, because it is not good for the industry at all,” said Smit.

MyBroadband asked the Msunduzi Municipality whether it had plans to roll out its own fibre network, and whether this was the reason for its legal action against DFA.

The municipality did not say whether it had plans to roll out its own fibre network in the city.

Instead, it said that the reason for the legal battle was because of the manner in which DFA proceeded to exercise its rights in terms of Section 22 of the Electronic Communications Act.

“Section 22 has huge implications for all land owners. While the economic interests of the country are acknowledged, the rights of affected persons should not be negated in the exercise of the Section 22 rights,” the municipality said.

MyBroadband also asked the municipality whether it does not think it is beneficial that DFA roll out fibre in the area.

The Msunduzi Municipality agreed that “the roll-out of fibre-optic networks by any service provider in a properly controlled manner is beneficial to the City and the country”.

“In doing so, however, such service providers must have proper regard to the interest of all land owners, other service providers, and the citizens,” it said.

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How ANC municipality nearly stopped fibre broadband rollout