ICASA’s spectrum fee snafu

ICASA’s deferral notice regarding the implementation of its new spectrum fees has been deemed illegal, and the regulator now faces the mountainous administrative task of rectifying its mistake – unless it can get the matter set aside.

The new licensing fee structure, initially planned for implementation on 1 April 2011, had been postponed by ICASA for a year, finally coming into effect on 1 April 2012. The delay was imposed due to ICASA’s inability to calculate the new fees at the time, and the impracticality and unavailability of a manual process.

The new pricing model moves away from a fixed price of R770 per MHz, per link, per annum, to one that takes into account different uses of spectrum, and the need to ensure that licensees occupy appropriate spectrum for these uses.

Unlawful delay

A deferral notice was issued by ICASA on 10 March 2011 to delay commencement of the new Radio Frequency Spectrum Regulations until 1 April 2012.

However, in the final regulations, published on 31 March 2011, the implementation date was never appended and was legally bound as starting on 1 April 2011.

Through an exchange of letters between Vodacom, ICASA and third-party counsel over fees related to the delay – as laid out in an affidavit on ICASA’s site – it was found that ICASA’s deferral notice was actually unlawful.

“The Deferral Notice did not, in the council’s view, have the effect of delaying the commencement of the RF Fees Regulations,” the affidavit said.

“If ICASA had wanted to defer the commencement of the RF Fees Regulations this should have been done by way of a formal amendment to the RF Fees Regulations to amend the date.”

Administrative hurdle

In light of this new finding, ICASA are technically owed over R1 billion in restructured charges.

However, the administrative burden attached to implementing those fees is too large for the regulator to handle.

Should ICASA be forced to retrospectively rectify its billing, it would be faced with reversing all spectrum fees for the past year and re-billing licensees according to the new regulations.

“This administrative task would be an enormous challenge for ICASA given the number of licensees whose fees would need to be recalculated and whose payments would need to be reconciled,” the affidavit continued.

Faced with this hurdle, ICASA have initiated proceedings to have the unlawfulness of the deferral set aside.

Win-win, but at a cost

By having the whole issue effectively disregarded, ICASA may lose out on a R1 billion in retroactive payments, but saves itself from complicated, if not near-impossible administration.

In an information document stating ICASA’s case, the regulator said that it does not seek relief from any of the 48,500 respondents it has listed – unless they look to intervene in the case, in which event they’d be expected to incur the costs of such proceedings.