Independent Communications Authority of SA Amendment Bill [B18-2013], Electronic Communications Amendment Bill [B17-2013]: deliberations

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29 October 2013
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Meeting Summary

At the outset of the meeting a DA Member said that she had sent a letter to the Chairperson to say that the public hearing process was flawed. The ANC Members were offended by the comment, claiming that the necessary procedures during the hearings were followed. Another opposition party questioned the management of public hearings going forward. There was quite substantial debate on the issue, before the Chairperson noted that these discussions were really more appropriate for another day, and requested that the Department of Communications (the Department) should proceed to take Members through the legislation.

The Department then presented the Electronic Communications Amendment Bill, and particularly noted that amendments were proposed to clauses 5-7, 9, 15, 20, 21, 23-25, 27, 29, 33, 34, 39 and 41. The Chairperson said the Department would still present on outstanding issues on clauses 21 and 24 of the ECA Bill on the following day.

In relation to the South African Independent Communications Authority (ICASA) Amendment Bill, the Department noted suggestions for amendments to clauses 1, 3, 4, 7, 10, 21, and 23. The major concerns with the amendments were whether they were legally sound and aligned with regulation. Another big question mark was about permission being given Authority for letting and sub-letting. Another issue was about who gets authority to sign cheque. Because ICASA kept giving input during the Department’s presentation, Members felt that the presentation was unclear and commented that they would have expected the Department and Authority to have met in advance to tighten up the loose ends.

Meeting report

Electronic Communications Amendment (ECA) Bill deliberations
Chairperson explained that the remaining issues with the Electronic Communications Amendment (ECA) Bill were on the agenda.

Ms M Shinn (DA) said that, following the previous meeting, she had sent a letter to the Chairperson to say that the public hearing was flawed. She had also hoped that the transcript and recordings of the hearings would be made available on the Parliamentary Monitoring Group (PMG) website, but this had not happened yet. She said the Members should start afresh and review the Bills, clause by clause.

The Chairperson said he disputed that there were flaws because due processes were followed and approvals were received. The process was fully constituted. He said that it was in fact insulting for Ms Shinn to say otherwise. He said that if she wanted a clause by clause review, then that was something for a later discussion. Parliament could pass Bills when the necessary requirements were met and he could not control party discussions. For that reason, he ruled that today the meeting would proceed with dealing with the Bills and not go back on any process, as he had obtained proper authorisation for the process. He repeated that he was offended that some people thought otherwise.

Ms J Kilian (COPE) asked for the clarity about the process for public hearings that would be followed going forward. She asked what the purpose of the presentation on both Bills by the Department of Communications was. She asked what the Chairperson would do about the submissions and proposals, as they were submitted through public hearing process but there were some written submissions, and other people had asked to be heard. There was a need to finalise the submission around due process in the Portfolio Committee. The comment had been made that Parliament was compelled by orders of court to follow due process in legislation. The different processes in different committees must be defined clearly, especially when it came to obtaining legal opinions. She said the Members needed to work on the purpose and process of the Bill, making clause by clause recommendations, and then make the necessary amendments at the end.

Ms S Tsebe (ANC) apologised to the Department of Communications (DOC or the Department) and other entities for having to witness this discussion. She agreed with the Chairperson that the Bill should be dealt with directly. She added that, as a member of the African National Congress (ANC) Study Group, she refused to be insulted by Ms Shinn, because the processes were followed well. She said ANC ran Government, but the opposing parties were being disrespectful. All the processes Ms Kilian mentioned were followed. Ms Kilian chose not to attend the public hearing meetings, but Mr Steyn from the DA was also part of the meetings. She said the documents about the processes were presented, and Members made inputs – not only the ANC Members participated. She said that there was no need to start anything afresh and suggested that the Committee now proceed with the amendments as planned.

Ms R Morutoa (ANC) apologized for her late arrival, and made the point that some people had the tendency to assume others were naïve, when they actually did know the proceedings, and pleaded that Members not try to undermine each other.

Ms R Lesoma (ANC) was taken aback by the conversation. She then seconded the motion to commence with the meeting, because everyone was here to work.

The Chairperson explained that today’s meeting was to identify the issues that not all Members agreed with in the amendment bills, and thus to engage in further discussion. He said that if any other outstanding issues existed, the Members could flag them for further discussion. Even if some Members were not at the public hearings, they at least had the chance to discuss the presentations. If any issues did arise in respect of any of the clauses, they would be debated.

Clause by clause consideration: Electronic Communications Act Amendment Bill and proposed amendments
The Chairperson tabled and asked Members to work from the document entitled “ECA Bill B17A-2013”.

Ms Rosey Sekese, Director-General, Department of Communications, explained that on 9 October the Portfolio Committee had asked the DOC to report on issues that were raised and key areas that required further research, hence the proposed amendments now set out in the document tabled, with the A-list that showed precisely how the clauses of the draft Bill would be amended.

Clause 5
Mr Themba Phiri, Deputy Director-General, DOC, said that he would take Members through the relevant clauses of the ECA Amendment Bill. He said that there was extensive input regarding extending services to people with disabilities, and compliance with the UN Convention on the Rights of Persons with Disabilities.

Mr Phiri said DOC proposed to omit “people” and substitute “persons”. The DOC also arrived at a proposed insertion of extending services to persons with disabilities. He said there was a way in which Information and Communications (ICT) complementary services could be defined to include all related sectors to provide for those services. The new definition of “ICT Complementary Services was outlined to mean “ broadcasting, postal and electronic communications services that include, but are not limited to, services defined to improve accessibility for end-users with disabilities, such as videotext, subtitling, audio description and sign language.” He said that two undefined proposals would go into the Bill as section (o).

The Chairperson asked the Members how they wanted to handle the presentation and questions.

Ms L Van der Merwe (IFP) proposed that the Committee move through the whole presentation and then discuss issues afterwards.

Ms Tsebe and Ms Shinn believed each clause should be discussed as presented, and Ms van der Merwe said that she could agree to that approach.

Ms W Newhoudt-Druchen (ANC) said she agreed with the amendment for persons with disabilities to have access.

The Chairperson and Ms Kilian wished her a happy 50th birthday, as an aside.

Members approved of the changes

Clause 6
Mr Phiri said he would be glad if delegates from the Independent Communications Authority of South Africa (ICASA) joined the DOC presentation to help present the proposal. He proposed that, on page 7 in lines 9 and 14, the omission of “impose” and substitution of “prescribe” to avoid links with certain processes. He said “prescribe” was always understood better by the stakeholders of the sector.

In line 21 he proposed, after “Agency”, to insert “and must consider determinations made by the Minister in terms of section 82”. He said DOC accepted proposals from which the Minister could communicate with the Universal Service and Access Agency of South Africa (USAASA or the Agency). He added that ICASA was an independent authority and should be seen differently from the Agency.

Ms Tsebe asked for a copy of the original Bill. She asked that anything coming out of the legal opinion should be clearly stated to the Committee. She had no issue with replacing impose with prescribe, as long as the word was accepted internationally.

Ms Kilian asked for clarity regarding whether the amendment emanated from the discussions or whether they were recommended by the DOC. She said there were separate issues which the Committee had asked to be discussed.

Ms Lesoma said that the discussion on clause 6 had already been discussed at a previous meeting that some of the Members had missed, and that it was a waste of time to repeat issues already covered.

Ms Tsebe said Ms Kilian was indirectly questioning the processes again. Issues were flagged already. The issue of prescribe versus impose had already been concluded.

The Chairperson said that this clause was not in the Amendment Bill but was rather an addition to the wording of the Bill, and the issues was whether Members wanted to accept the new or originally wording.

Mr Phiri said that after the meeting on 9 October, the DOC had a discussions with the Office of the Chief State Law Adviser (OCSLA) and has worked with that office to ensure that proposals were legally sound and did not contradict any provisions of statutes. Clause 6 dealt with the terms and conditions of access obligations. ICASA must have power to impose terms and conditions. The word ‘prescribed’ was universally accepted. “Agency” referred to the USAASA. The “Authority” was ICASA. Ministers had powers to instruct the Agency.

The Chairperson said section 8(2) of the Electronic Communications Act (the principal Act) referred to the functions of the Agency.

Ms Kilian accepted the clause.

Clause 7
Mr Phiri read out the changes on page 7, to substitute a new (b) setting out that additional terms and conditions may be imposed, and “make a designation contemplated in section 8(4)”. He said that clause 7 was a matter of cleaning up the wording.

Ms Shinn asked why ‘impose’ was used instead of ‘prescribe’.

Mr Alf Wiltz, Director: Legal Services, DOC, said that in the original wording of the Bill ‘prescribe’ was removed, but in the amended clause there was reference to both ‘impose’ and ‘prescribe’, to reinstate ‘prescribe’.

The Chairperson asked for an explanation on the difference between the two words.

Ms Shinn suggested that the DOC qualify it by saying:  “may prescribe, in terms of section 8(3), such terms and conditions...”

Mr Herman Smuts, Principal State Law Adviser, OCSLA, mentioned that the DOC was trying to revert to current style of legislation and thus suggested the words ‘as prescribed’ in the Bill.

Ms Tsebe suggested that consistency be maintained.

Mr Phiri explained that the word ‘impose’ did not intend to derive the process/procedure that came with the word ‘prescribe’ where it was. The process was defined in the word ‘prescribe’ and changing the wording would change the original intent of the original drafting.  So in terms of the A-list, the DOC had reverted to the original wording.

Ms van der Merwe said that the explanation would suffice.

Mr A Steyn (DA) said he had no problem with the amendment as it is. He referred to page 6A, on page 112 of the “small original book” which implied that 8(2) and 8(3) were already included in that. He wondered then why it was necessary to define them.

Mr Wiltz explained that section 8 contained standard licence terms and conditions. He said there must be a way to distinguish between licensees, to allow ICASA to impose certain terms and conditions in section 8. Section 9(6)(a) of the Act included terms and conditions for granting licences. In section 9(6)(b), ICASA imposed additional terms and conditions that had already been prescribed. The wording as now set out was correct.

Clause 9
Mr Phiri said that on page 7 of the Bill, in line 53, there was a proposal to omit subsection (b) and to substitute subsection (3) for paragraph (a) as follows: “(a) promote the ownership and control of electronic communications services by historically disadvantaged groups and to promote broad-based black and economic empowerment”. He said this clause aligned with the Broad Based Black Economic Empowerment Act (BBBEE) and the addition was a matter of clean up.

Ms Lesoma accepted the clean-up and adoption of the clause.

Clause 15
Mr Phiri proposed to omit paragraph (b) on page 9 from line 48 and to omit paragraph (c) on page 10 from line 1. Clause 15 of the Bill made provision for the amendment of section 31 of the Act by the insertion of section 31(2A) and amendment of section 31(3), to enable regulation of letting and sub-letting of radio frequency spectrum licences. Thus the amendment of section 31 could result in spectrum trading. That policy matter would have to be duly considered during the ICT Policy Review. For these reasons, it was therefore now being proposed that the originally-intended insertion of section 31(2A) and amendment of section 31(3) be omitted. The DOC dealt with administrative problem for ICASA. Support of this sector was interpreted to mean that the legislator would have had and indication to introduce spectrum trading.  There was confusion of opinion on what exactly the clause had meant. No policy had evolved to allow for spectrum trading through which entities and licensees could ask ICASA to allow for it.

He read out the wording of the new section 31(2A), which read “A radio frequency spectrum license may not be let, sub-let, assigned, ceded, or in any way transferred, and the control of a radio frequency spectrum licence may not be assigned, ceded, or in any way transferred, to any other person without the prior written permission of the Authority.”

The intent was to disallow a certain practice but in the end it may be that the Authority must take due regard to rules of natural justice, as an administrative body. In some cases, the transfer of radio frequency may not be refused. He apologised for the mix-up on this clause. The DOC had been trying to get rid of negative practices. He asked the Chairperson that paragraph (b) now be omitted, because including it could lead to unintended consequences.

Mr Steyn said he was unsure why this should be omitted, as it was surely meant to tighten the process. Written permission from the Authority should be required, when a third party licence was obtained. If this was omitted, he asked what then would govern the relationship with the third party.

Ms Morutoa said she also thought there would be something to substitute, if this clause was omitted, and wondered if it implied that people may simply act as they chose.

The Chairperson asked what the practice would be if the clause was removed.

Mr Phiri explained that section 31(3), dealing with regulations of ICASA, came into effect if this clause was omitted. In terms of this section, entities with radio frequency specs may request ICASA to implement something into their paper, on reasonable grounds. In respect of that, ICASA would still need to make the necessary prescriptions, under section 31(3).

Ms Shinn said she thought that ICASA supported the amendment, but asked what its stance had been during the public hearings.

 Ms Tsebe asked if DOC was in agreement with ICASA in the matter, and what the positive and negative outcomes would be.

Ms Morutoa asked whether a detailed explanation was needed on what had transpired in Johannesburg. She said it seemed that the Bill was moving backwards.

Ms Sekese said ICASA wanted to retain this clause as it helped ICASA in its work. However, as a compromise, it needed something else to deal with any unintended circumstances. She read out from Page 9, line 49, which was making changes on ‘let’ and ‘sub-let’, and proposed a consequential amendment on page 10, line 10, which would change subclause (c), by inserting a reference to “as contemplated in subsection (2A).

Ms Tsebe asked if this was legally sound.

Mr Smuts said that this compromise was fine from a legal point of view, as only the references to letting and sub-letting were taken out

Ms Shinn said she was confused whether this referred to the licensor or licensee. She asked if this meant that section 31(2) would be deleted.

The Chairperson clarified that the document was compromising by deleting letting and sub-letting in the clause, but everything else remained the same.

Mr Steyn asked why DOC would not require the permission of Authority in cases where licensees wanted to let or sub-let. The purpose of these amendments should be to promote broad based control. He asked what would prevent a BEE entity from obtaining a license but undermining BEE control by letting or sub-letting to someone else, for major profit. He reiterated that ICASA must  surely give permission, for control purposes.

The Chairperson said that was exactly what the DOC was saying.

Ms Tsebe asked that ICASA speak for itself on this clause.

Ms Morutoa wanted someone to read this out again, and confirm that the proposed clause did answer the concerns of Mr Steyn.

Ms Kilian said that ICASA was indeed here, but the topic was intensely technical and legalistic. She cautioned that extreme care was needed when removing the permission of the Authority.

The Chairperson said that DOC should read it again and either omit the clause or deal with the issue for letting/subletting.

Ms Marcia Socikwa, Councillor, ICASA, confirmed that ICASA supported the essence of the clause and supported the deletion of the words in section 31(2A), as this helped ICASA to manage underhand dealings in the market.

Chairperson said the word in mind was licence, not licensee.

Mr C Kekana (ANC) said this was fine.

Clause 19
Mr Phiri highlighted that, in respect of clause 19, DOC was asked to confirm issues around technical or economic feasibility. The DOC maintained the original draft of economic feasibility and also looked at international trends on the issue and at the submissions by ICASA and other entities.

Mr Steyn said that the last time he checked, these concepts were in clause 15, at line 1 of page 10, and did not understand why they were at clause 19 now.

The Chairperson suggested that clause 19 should be discussed at the end of the meeting.

Clause 20: Exemption of licences.
Mr Wiltz read out the changes, and said that clause 20 was calling for the omission of subsection (5) regarding interconnection regulations. A person was exempt from the obligation to interconnect, if the entity did not have significant market power under chapter 10. It was proposed that this amendment be abandoned.

Ms Morutoa said that she was now completely lost, and pleaded with the DOC to make the presentation much easier to understand.

Ms Shinn asked what exactly ICASA was planning to drop.

Ms Socikwa said ICASA supported the DOC amendment clause on separation, to relieve ICASA of unnecessary work tied to chapter 10.

Mr Phiri said the process in Chapter 10 spoke to identifying the scientific method ICASA must apply. Stakeholders of the DOC said they could not deal with two processes, and asked that the law be left as it was. DOC was thus now proposing that the law remain as it was, with its original intention, specifically to avoid any threatened litigation, despite the fact that it would pose some difficulties to ICASA.

The Chairperson asked what the legal implications of separation of (5) and (6) were, as operators just wanted to benefit.

Mr Steyn asked if both subsections (5) and (6) were being removed in their entirety.

Mr Wiltz referred to clause 20 on page 11 of the Bill, where clause 20(c) set out the amendments to (5) and (6). This was intended to keep up with developments.

Ms Shinn asked for confirmation that the Act would then not change, and whether ICASA preferred this.

Mr Wiltz confirmed that the existing wording would then not change.

Ms van der Merwe said she thought ICASA had not wanted the amendment.

Ms Socikwa said that, during the ICASA presentation, it had been said that ICASA understood that the burden of the Chapter would be removed. From a strictly legal perspective, the Operations Division wanted to maintain it. This would, however, result in the process taking longer.

Ms Shinn said that the process of legislation took time. ICASA should streamline the process by making things easier, better and faster. If this was done, she questioned if there was in fact any harm in removing the section. ICASA would get the blame for this.

The Chairperson said that he had asked about the legality, because small players in the sector asked the Committee, when it did oversight, about the amendments. He proposed that the DOC must work on the Bill so that it was consistent with all other legislation, and ICASA must be involved in that process.

Mr Phiri said the reason why there was attention focused on this was precisely because there were both small and big players in the sector. Even if the DOC trusted ICASA, the matter was sensitive, and due processes of Chapter 10 must take into account that significant market power tended to attract to those who were large players and thus capable of more abuse in the market. This section seemed to balance that abuse. DOC was concerned about achieving a balance and regulating the existing large players.

Ms Shinn said that one of the ICASA routes was to broaden its base in the market and to encourage new entrants, not exempting the “big bullies”. ICASA needed to look after the smaller entities.

The Chairperson urged DOC to speak to the issues over the lunch-break so that the Committee could get a unified view.

He noted that the DOC approved of deleting section 39.

The remainder of discussion on this point was inaudible.

Clause 21
Mr Phiri proposed that the clause should be deleted.

Mr Steyn said he would agree if provision for protection was made in the original documents.

Ms Socikwa said it was covered by existing regulations.

Mr Steyn followed up by asking why the clause should then be removed.

Mr Phiri said that the entire content of regulations could not be included in a clause.

Ms Morutoa complained, at this point, that the meeting was not proceeding with due speed, and that DOC and ICASA should have met in advance to tie up any loose ends, and their failure to do so was uncalled for.

Members agreed to the deletion.

Clause 23
Mr Wiltz proposed on page 12, lines 38 and 40, to omit “ten” and to substitute “twenty”. On page 12, line 46, omit five and substitute “twenty”. On page 12, in line 52, to omit “three years” and to substitute “one year”.
He explained that this clause was not about how other operators could access facilities. The time period had been changed because this had already been in existence for some time.

Ms Tsebe said the years and days were in order. She said this matter had already been discussed before, so this was not a new amendment.

Members agreed with the amendment.

Clause 24
Mr Phiri said this was similar to the clause 21 on exemptions, and suggested that he revert later on it.

Clause 25
Mr Phiri said the clause was linked to clause 21, and allowed ICASA to review and this was in legislation already. Parties could file with ICASA. He requested that DOC also come back to the Committee on this clause.

New Clause:  Amendment of section 60 of Act 36 of 2005
Mr Phiri said there was now a proposal to amend the principal Act, in section 60, by substitution of subsection (3) with the following: “(3) The Authority must prescribe regulations regarding the extent to which subscription broadcast services must carry and pay for, subject to commercially negotiable terms, the television programmes provided by a public broadcast service licensee.”

He said the Department previously proposed that a new clause be inserted into the Bill to amend section 60(3) to make provision for a ‘must carry and pay’ obligation. Following further consideration of the matter, at the request of the Committee, the DOC was now proposing that the amendment not be proceeded with. Instead, due consideration of it would be allowed during the ICT Policy Review process. The DOC, having listened to the SABC submissions expressing dissatisfaction, also thought that the applicability of the Regulations must be reviewed. Cost was the issue in the signal carriage and content. The legislation did aim to ensure that everyone would get access to content and content quotas were important.

The Chairperson asked what was the problem, and if it was around commercial arguments, or subscription TV matters. He asked what prompted the submission.

Mr Philly Moilwa, Head: Regulatory Affairs, SABC, said it made perfect sense who must pay whom, so that the pay part must not be confused with the rest.

Ms Shinn said she was now even more confused regarding the commercially agreeable rate. She did not understand why the clause was being added.

Ms Morutoa said that, in light of the SABC response, she did not see the need for the phrase “must carry and pay for”.

The Chairperson asked what would happen if the regulator came with regulations that were not prescribed for in the law.

Mr Smuts said the regulations would then be unconstitutional.

The Chairperson said he was not sure whether to deal with the amendment, or instruct ICASA on the point.

Ms Socikwa said that the present phrasing was open to interpretation. ICASA must have a basis for a fee framework. In the absence of such, SABC could take it to court to confirm which interpretation was correct.

The Chairperson asked how DOC would deal with the matter to make sure that the interpretation was correct. It appeared that the regulations and law were undermining each other.

Mr Kekana said there was no need to run to court. There should have been interaction between the Regulator (ICASA) and the Minister and to present a united view to the Committee. He urged that the Committee hear out the concerns.

Ms Shinn said she was surprised that SABC had never raised this issue before. She said “commercially negotiable” was an acceptable phrase. She suggested that it could either be dropped, or sent to the ICT Policy Review process.

Inaudible comments were made by Members.

Ms Socikwa explained that the issue of payment could be better detailed in the clause. The issue of how universal public service would be advanced had to be looked at holistically. There was a need to consider what policies would govern the framework.

The Chairperson said it was clear what should happen, but it seemed that ICASA regulators were not in line with the law. The problem was bigger, and it may be constraining the free commercial discussions.

Clause 27
Mr Phiri referred to page 13, from line 51, and proposed to substitute subclause (3) with the following:  “(3) A common carrier must – (a) subject to its technological capacity to do so and to the provisions of paragraph (b), provide broadcasting signal distribution to broadcasting licensees upon their request and in accordance with the national radio frequency plan contemplated in section 34, on an equitable, reasonable non-preferential and non-discriminatory business.”

Mr Steyn asked why there was no discussion on subclause 27(b). It seemed to be exactly as in the Amendment Bill.

Mr Wiltz said the amendment in the clause suggested that a part be removed, but subsequently it was decided to leave it in. On page 14 of the bill, (b) aimed to add the underlined wording. Sentech, as a common carrier, would need approval from ICASA for tariffs. There would be no changes to (c).

Ms Tsebe advised ICASA and the DOC to deal with these matters during the lunch break.

Clause 29
Mr Phiri proposed that, on page 14, line 38, there be omission of “[defining the] determining” and to substitute “defining the”.

New clause: “[People] Persons with disabilities”.
The new clause sought to align the wording with UN Convention standards.

Clause 33: E-rate
Mr Phiri proposed that on page 17, line 4, the insertion of “all public health establishments defined in the National Health Act (NHA), 2003 (Act No. 61 of 2003),”. In line 27, he suggested replacing “retail” with “wholesale”.

The Chairperson asked whether higher education institutions were part of the E-rate regime.

Mr Wiltz confirmed that they were..

The Chairperson asked if there was a provision for…

Mr Wiltz said that it was a matter on which Parliament must apply its mind…

The Chairperson asked if DOC wanted to include matters in legislation rather than regulations.

Mr Smuts that for legal certainty, Parliament should rather be approached.

Ms Shinn said the issue of having every entity coming to Parliament to request an e-rate could possibly arise. Something was needed to limit the number of entities that asked for this.

Ms Tsebe agreed with Ms Shinn but suggested dealing with it when it arose.

Mr Steyn said there was a risk of abuse of this rate being requested for things other than educational services, as the e-rate would be received at a discount.

Ms Lesoma said she would leave it to the Chairperson to deal with the matter.

Mr Wiltz said there was drastic change which should be left with the legislature, and interventions would be need to deal with up and downstream issues. There would need to be effective regulation of this particular area.

The Chairperson said that this could be done by regulation from the Department, to avoid legal opinions and litigation.

Mr Wiltz said that “prescribed” meant prescribed by Regulation.

The Chairperson asked what the time frame for e-rates was.

Mr Smuts said that it was difficult to place a timeline for making regulations. He also said that e-rate regulations already existed, so it was unnecessary to place a timeline. ICASA had an implicit obligation already to align its regulations to new laws.

Ms Newhoudt-Druchen asked whether clause 33, on the Public Health Act, would involve consultation if it was already part of the National Health Insurance.

The Chairperson and Mr Wiltz confirmed that it would not be necessary. Some schools were not entitled to the discount. Subsection 5 was being deleted.

Clause 34
Mr Phiri proposed a correction of a reference to the Promotion of Access to Information Act.

Clause 39
Mr Phiri again indicated a substitution of wording to align this clause with the UN Convention.

Clause 41
Mr Phiri noted the addition of the words “by regulation” after “prescribed”, on page 21, line 46 This was to avoid confusion.

Ms Shinn asked if there was no other step, such as a consultative process that the Minister should adopt.

The Chairperson asked if there was any public participation process.

Mr Wiltz said there were various mechanisms to ensure due process.

The Chairperson asked if there was any requirement to come back to Parliament…

Mr Smuts said that all regulations should be submitted to Parliament.

Mr Wiltz said there was, in fact, in this case, no requirement to submit anything to Parliament; the clause specified what the Minister had to do, without any other specific requirements.

The Chairperson said there was a new Committee dealing with delegated legislation.

New Clause: Broadcasting Act changes
Mr Wiltz proposed the addition of a new clause, to amend the definition of “common carrier” in the Broadcasting Act. (see attached document).

Reversion to discussing previous clauses
The Chairperson noted that the Committee would still need to revert to discussions on clause 20. 21, 24, and 25.

Mr Phiri explained that the DOC consulted ICASA on the proposals for section 20. To depart from the Chapter 10 authority would require “irregular regulation”. Interconnection happened between all players. The regulator could be asked to impart the significance of that particular regulation. The applicant could prove that he did not have significant market power. These principles would apply also for section 24.

Mr Phiri said the issue was very delicate and the guidance of the Portfolio Committee was needed. He proposed an update to subsection 20(c)(v) to read: “Subject to Authority prescribing procedure(s) which must take into account market competition, annual turnover and network, network efficiency, network sharing, the interconnecting regulations may exempt (in whole or in part) licensees from the obligation to interconnect under section 37(1)”. The words “ where the Authority has not found such licensees to have significant market power in the relevant market or market segment in terms of Chapter 10” would be deleted..

Mr Steyn asked if this was meant to replace subsections (5) and (6) should they be omitted.

Mr Wiltz said he was referring to something else, and so only the heading changed. He thought that perhaps only subsection (6), and not (5), should be amended.

Ms Shinn said she was concerned that some companies may not have significant market power, so may be the intention could be expressed better to accommodate Small, Medium and Micro Entities (SMMEs) as well.

Ms Newhoudt-Druchen asked whether the word “prove” should not be used, instead of “proof”. She agreed with Ms Tsebe’s comment on complete wording. She finally said that she was unsure how to read clauses 20 and 24.

Ms Morutoa said she would like to see the complete new arrangement of the clauses. She felt that the concerns had been taken into account. However, there was a drastic change. She asked how this linked to chapter 10.

Ms Lesoma said the Members need to understand what DOC was seeking to address.

The Chairperson said it would be easier to engage with the DOC on a cleaner copy.

Mr Phiri said there was an issue with broadening market participation and the issue with SMMEs was being dealt with. He said Chapter 10 identified that, before the Authority could do anything, certain processes must be followed. Section 24 dealt with facilities leasing regulations. There were variable ways in which ICASA could deal with the market issues.

Ms Socikwa said the smaller players were prejudiced in interconnection agreements and this amendment was intended to enable smaller players to be exempt. That would support new entrants and small players in the market with interconnection.

The Chairperson said that would help also in oversight.

Mr Wiltz confirmed that clause 19, on feasibility of interconnection, linked to clause 23. There was a reference on page 11, at line 18, to “technically and economically feasible”. ICASA had asked for this change. The DOC had replaced “financially” with “economically”, because principles of economics enjoyed wider interpretation and thus economic feasibility was more suitable…He confirmed, in answer to a question from Ms Morutoa, that the wording of “technically and economically feasible” should remain.

o the wording in the Bill ought to remain as is.

The Chairperson said DOC must still deal with the reworking of sections 21 and 24 by DOC and ICASA. He asked about the clause regarding community radios, in relation to their survival. He said he was not sure if this was part of the Bill.

Mr Wiltz said that related to section 89 of the Act. It was not actually set out in any of the documents presented, but it specified how much should be paid by each licensee to the Universal Services and Access Fund.

Ms Tsebe said that since it was not part of the Bill, then the Committee should not discuss it now.

Ms Morutoa agreed that asked why the DOC had not brought the issue forward before.

Ms Lesoma said that it was good that new entrants were encouraged. She asked whether the turn-around time was addressed.

The Chairperson said that it would be dealt with in terms of amendments, as the issue was very thorny.

Clause by clause consideration: ICASA Amendment Bill and proposed amendments
Clause 1
Mr Phiri said the definition of ‘electronic transaction’ excluded certain aspects. He proposed working on a definition better aligned with the Electronic Communications and Transactions Act of 2002.

Mr Phiri then dealt with the definition of broad-based black economic empowerment (BBBEE), into which, after line 5, there would be insertion of “’broad-based black economic empowerment’ has the meaning assigned to it in the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003);”

Members were agreed.

Clause 3
Mr Phiri read out the changes, on page 3, line 48, where it was proposed to omit “assign” and substitute “control, plan, administer and manage the use and licensing of”. This was done to align with other legislation.

Mr Smuts said this was legally sound as “assign” was limited.

Ms Shinn asked why “assign” was being removed, and why “assign, substitute, control, plan and administer” were used.

Mr Phiri said that this was to align words with the ITU and showed the work that ICASA was doing. The new wording spoke to all of ICASA’s processes.

Mr Wiltz said “assign” was synonymous with license. The wording was copied from section 31 for consistency purposes.

Ms Shinn asked whether the ICASA assignment role would be taken away.

Mr Phiri said there was no intention to take away this function. He explained that this was merely aligning wording with the ECA.

Ms Socikwa suggested that the word “monitoring” should be inserted.

Ms Tsebe said such comments by ICASA would slow down the meeting, suggested that Ms Socikwa must move closer and sit with the DOC delegation and that ICASA and DOC should have sorted out this matter over the lunch-break already.

Ms Morutoa also complained about interruptions and distractions, and shared the view that ICASA and DOC should have met before coming to Parliament, to avoid taking the Committee back.

Ms Shinn said that ICASA was an independent organization which was free to contradict the DOC.

Ms Morutoa said her point was that there was no need to repeat the public hearing proceedings. ICASA should have met with DOC earlier.

Ms Lesoma said Ms Shinn was trying to divide and rule, and made the point that all were government bodies. ICASA had its chance to make submissions already, and this was the turn of the DOC.

Ms Tsebe said ICASA was being unfair and opportunistic, and agreed that they should have met to find common ground. She reminded Ms Shinn that even though ICASA was independent, it still reported to the DOC and was not a Chapter 9 institution.

The Chairperson said that Members still needed to request the views of ICASA at some point.

Mr Steyn said he was disappointed and urged the Chairperson to ask all Members to watch their tone of voice, and not use phrase such as “we would not allow”.

Ms Lesoma said she respected Mr Steyn’s views but he must not attempt to instruct other Members on how to speak English. He had not even attended most of the public hearings.

Ms Morutoa apologised, agreed that Mr Steyn should not attempt to dictate how Members spoke, but said that ANC, as the majority “ were not going to allow” anyone to undermine it. She fully understood the Rules.

The Chairperson called for order. He noted that any person’s choice of words would be interpreted by others, but all Members had the right to express themselves.

Ms Shinn said this was not a matter of English, but of principles. It was not up to any member to suggest where others should sit. The point was to encourage entities to clarify the issues, and the Committee Members could ask questions. It was not up to the majority party to run matters.

Ms Tsebe said Members could indeed ask whatever they want. The seating arrangements were merely a suggestion. Questions would be welcomed if they went through the Chair. She apologised if there had been misunderstandings.

Mr Kekana said there must be equal opportunity to speak, but the point was some colleagues did not attend public hearings, and raised questions already settled, which delayed the proceedings. He urged that all Members be careful how they spoke.

Ms Lesoma said communication was a two-way thing and it was important to listen without emotion. She apologised if the Chairperson had been undermined.

Mr Phiri continued to outline the clause. On page 4, from line 8, the new paragraph (k) omitted the reference to the BBBEE Act of 2003 and simply said “to promote BBBEE”

Clause 4
Mr Phiri proposed, on page 4 in line 59, to omit “30” days and substitute “45” days for improvement of turn-around times. In answer to a question from Ms Lesoma, he confirmed that these were working days.

Clause 7:
Mr Phiri noted the proposal, on page 5, from line 46, to substitute: “(1) The Minister must, in consultation with the National Assembly, establish a performance management system to monitor and evaluate the performance of the chairperson [and other], councillors and the Council, individually and collectively.”

Ms Shinn said she was concerned that often people who were not appropriately skilled were appointed to Councils, and the same applied also to executive staff. The Minister seemed to have Authority in this regard but Parliament needed to have stronger hand in this situation.

Ms Tsebe said this matter was thoroughly discussed in Gauteng and she was happy with suggested clause.

Ms Shinn said in the past, the PC had been encouraged to vote on the employment of a Councillor and the Minister had no say. It should be the responsibility of Parliament to appoint the right people and be responsible for their performance management.

Mr Wiltz said the National Assembly must approve the performance management system. The role of the Minister should be administrative. Performance was monitored both individually and collectively. Both the individual, and collective Council, must perform.

Ms Lesoma said she aligned herself with Ms Tsebe’s recommendation…

The Chairperson said when the amendment of the ICASA Act was done, clauses were inserted to leave this up to the Minister but that Bill was referred back by President Mbeki. There had been continuous struggles and balancing acts were needed.

Mr Steyn asked if it was stated how often performance management would be done.

Mr Phiri said it was set out in section 6(A) and this should be annually done.

Clause 10
Mr Phiri said that on page 7, from line 23, a new subsection (3) read: “(3) The minutes, contemplated in subsection (2), must be signed, confirmed and published on the Authority’s website and made available in its library within 30 days of the conclusion of the meeting, but any information determined to be confidential in terms of section 4D must be removed prior to such publication or availability.”

Clause 21
Members agreed to the omission of paragraph (a).

Clause 23:
Mr Wiltz outlined the amendments (see attached document, page 10, from line 23), for (1)(a) and said that this had been amended to cover both licensees and other persons.

On page 10, from line 28, new wording was given for subparagraph (i), which clarified how the complaints would be received and dealt with by the Complaints and Compliance Committee (CCC).

On page 10, in line 35, after “complaint” there was addition of: “(iii)investigate the complaint as contemplated in section 4(3)(n).”

Ms Morutoa said she felt that the latest amendments had been thoroughly outlined.

Ms Shinn said she would be raising issues…

The Chairperson clarified that the issues raised arose out of meeting on 8 and 9 October, not the public hearing in Johannesburg.

Ms Tsebe asked about the penalties and whether they were included in the Bill.

Mr Phiri said the penalties were in the Bill and the Members did adopt them.

Mr Steyn said the penalties were excessive and need to be looked at.

Mr Steyn referred to clause 20, and said Annual Reports were usually tabled by the Chairperson. He asked for clarity regarding whether, in this case, it was the Chief Executive Officer, or the Chairperson who attended to the tabling.

Mr Wiltz said that was done to align the ICASA Act with the Public Finance Management Act (PFMA) as ICASA was a constitutional institution.

Mr Steyn said he would accept that.

Mr Steyn questioned clause 22, page 10 line 5, referring to complaints that involved ICASA and asked if there would be no conflict of interest when establishing the CCC.

Mr Phiri said the Committee must be established by the Minister. Members who served on the CCC were under oath and did not consider themselves ICASA councillors.

The Chairperson said most submissions did not support this clause.

Mr Steyn referred to page 11 line 11 of clause 24. where the words:  “after an investigation into the complaint has been carried out; were removed. He asked if this was right, considering that the CCC did not have investigative power and thus may not have enough information to make a ruling.

Referring then to page 9, line 31, of clause 20, he said that if a charge had been laid with SAPS, SAPS may be unable to investigate and surely it was for ICASA to lay a charge.

Mr Tsebe suggested that the DOC note the questions and be given a chance to think about them and respond.

Mr Kekana thought the penalties clause should remain as it was.

Ms Morutoa said questions must be posed before 6pm.

Ms Shinn referred to page 6 line 45 of clause 8 and asked which councillors were employed on a part-time basis. She asked if this was even allowed and what the norms were.

Ms Shinn thought that the statement on page 8, in clause 14(a), was onerous and imposed time lags in securing critical skills. She said it also took away the independence of ICASA to make appointments.

Ms Shinn asked if, on page 18, it was legal that authority for signing cheques may also be delegated to a councillor.

Ms Shinn had problems with the Annual Report issues.

Ms Tsebe said she thought the Chairperson would give Ms Shinn a chance to cover ECA issues.

The Chairperson asked the DOC to look into the questions that could be answered today. These questions were not only for the DOC but for the Members as well.

Ms Tsebe said she could reply on issues raised by Ms Shinn on pages 8 and 9 of the report, saying Mr Steyn had already pointed them out and the DOC did respond to them. She agreed with what was contained in the Bill as she saw no contradictions.

Ms Shinn referred to the Electronic Communications Amendment Bill, on page 5 section 3(b)(4), where she suggested that the word should be “may”.

Ms Shinn was worried, in the ECA Bill, about page 6, section 3(d)(10), about the Minister being allowed to depart from the time period specified in subsection (5)(b)(ii). This could lead to bureaucratic foot-dragging and she would like it to be dropped.

Ms Shinn also wanted to drop the amendment on section 4(b)(5), at line 14, because ICASA could handle it on its own without the help of the Minister.

Ms Shinn referred to page 9, section 21 of the ICASA Amendment Bill and asked if there was any need to get involved with National government because it sounded too bureaucratic.

Ms Shinn then referred to the ICASA Amendment Bill on page 13, in the substitution of section 24 of Act 13 of 2000 and asked if ICASA was involved with advertisements.

Ms Shinn, with reference to page 16, section 32 of the ECA Amendment Bill, asked if the National Broadband Council had been removed and whether there was an impact assessment.

Ms Shinn wanted to ask about the necessity of the amendments on page 22 under section 89 of Act 36, and, in relation to clause 42 (4), why the Agency had to collect the money – surely that should be the job of ICASA.

Mr Steyn went back to page 3, line 18 of the ECA amendment bill, the definition of a “common carrier”, and said that he was unwilling to see entities actually named in legislation, as the name of Sentech might change. He was not sure whether he had an alternative off the cuff but asked if there was some way to avoid this.

Ms Tsebe said Sentech was a state-owned entity. She asked DOC if it was legally sound.

Ms Tsebe referred to page 6, line 13 of ECA Amendment Bill, and asked where the consistency was, when 30 days were specified on the particular page but working days were assumed for the rest of the Bill.

Ms Tsebe pointed out that Ms Shinn had a problem with several clauses involving the Minister, and asked that DOC should respond to that. However, she also said that on the last day of public hearings, the DOC had addressed all these issues, and Ms Shinn was not present to note them.

The Chairperson said the DOC ought to be given a chance to deliberate on the questions. He said the legal advisors should consider the legal implications, including Ms Shinn’s question on financial accountability.

Ms Tsebe said that DOC had responded to all these issue in the previous meeting.

Ms Newhoudt-Druchen agreed on that.

The Chairperson said some issues must be debated by Members, and the DOC did not have to justify anything now.

After a short break for DOC to consider the questions, Mr Phiri presented some responses.

Mr Phiri responded by first explaining that the part-time councillor was referred to in the Policy Review. Section 14A of the ICASA Amendment Bill empowered the Minister to approve, and s/he had executive authority. There was nothing legally wrong with the accounting officer jointly signing cheques with the Councillor, because ICASA was almost an executive council. The tabling of the annual report was in line with the PFMA Act.

Mr Phiri said the CCC had been given the authority to investigate and evaluate matters. The CCC was independent by design. The wording on page 11, line 11 of ICASA Amendment Bill had no effect on the CCC.

The Chairperson said the issue of part-time councillors was being reviewed. On page 8 clause 14(a) he explained that the authorisation by the Minister was required only if the budget was exhausted.

Ms Shinn asked if it was possible to give a time frame for when the Minister might respond.

Ms Tsebe said she was part of the drafting team, and a time frame would be necessary only if this was a legal requirement. She said she felt the phrasing was fine.

The Chairperson said on the issue of signatures for cheques, ICASA was an executive body.

Ms Tsebe reiterated that there was nothing incorrect in this phrasing.

Mr Smuts said legally the clause was fine but in principle the Accounting Authority should exercise its power along with someone else.

Mr Phiri said that on page 5 of ECA Amendment Bill there was an important issue of “may consider” versus “must consider”. There was due process ICASA underwent, to ensure that the matter was considered. Thus there was no reason to change it to “must”.

Mr Wiltz referred to page 6, section 3(d)(10), and said grounds for departure were listed. The Minister would not simply be applying new criteria overnight. There must be possibilities for exceptions. (The remainder of his answer was inaudible).

The Members agreed to this.

Mr Phiri said Sentech was established according to the Sentech Act of 1996…

Mr Phiri referred to questions on section 4(b)(5), and said that in fact the possibility of regulations already existed, but many regulations had not been implemented in full.

Mr Phiri explained that references to “calendar days” had in fact already been removed. The issue on page 9, section 21, was simply a matter of cleaning up references and aligning.

Ms Shinn said it was a bit contradictory that “consult” was used and perhaps “inform” would be better.

The Chairperson pointed out that the wording sought to align with the Constitution.

Mr Wiltz noted that on page 13, clause 26 was amending section 55, and pointed out that in 1999, regulatory powers were transferred to ICASA under the ECA, but it was subsequently realised that certain matters were not included, and this sought to bring it in line. ICASA made a written submission to the Department…

Ms Shinn asked for the Regulations to be submitted to the ad hoc Committee on secondary legislation.

The Chairperson made an inaudible comment on that.

Mr Phiri responded to issues raised on section 72A and said broadband was a very important flagship in the country. There was a need to give effect to that.

Ms Shinn asked if money has been requested in next year’s budget.

Mr Phiri said the functions would fall under the Directorate.

Mr Wiltz said that, on page 22 at clause 42, the Authority continued to collect from licensees and USAASA collected from the Authority. The money went to the National Revenue Fund and this was being amended to bring it in line with Treasury Regulations.

The Chairperson pointed out that some issues on clauses 21 and 24 would be dealt with on the following day. He suggested the Committee meet at 2pm.

The meeting was adjourned.


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