Independent Communications Authority of South Africa Bill, Electronic Communications Amendment Bill: Department of Communications & Deputy Minister briefings

NCOP Public Enterprises and Communication

21 January 2014
Chairperson: Ms M Temba (ANC; Mpumalanga)
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Meeting Summary

The Department of Communications, with input also from the Deputy Minister of Communications, briefed the Committee on the Independent Communications Authority of South Africa (ICASA) Bill, and the Electronic Communications Amendment Bill. An ICT Review policy process was under way in the sector, and several matters had been deferred to that process. However, the Minister had felt that there were some urgent matters, updates and anomalies that needed to be addressed now by way of these two bills. The briefings highlighted the objects of each of the Bills, and then gave substantial detail on each clause and the sections of the relevant Acts that they sought to amend.

The ICASA Bill inserted new definitions, amending those that were obsolete, providing more clarity on, and strengthening, the powers of the Authority, and providing for accountability of councillors. It made provision for concurrent jurisdiction agreements between ICASA and other regulatory bodies, the input that ICASA may give to the Minister, and its revised power to determine penalties and sanctions, as well as increased sanctions that could now include imprisonment. It was stressed that although the Council could not delegate its primary role of licensing, some other delegation possibilities were outlined. Amendments also aimed at speeding up the process and ensuring increased transparency in ICASA, including specifying a wider base of expertise for Councillors, collectively assessing Council on its performance, a limitation on Councillors serving only two terms and their duty to disclose interests and office held. The provisions around holding of monthly meetings, a tightened quorum, attendance of the CEO and publication of minutes of Council meetings were explained. ICASA now would have to produce a code of conduct. Clause 14, which Members later questioned, said that ICASA would be able to appoint experts without first needing to consult with the Minister, except where ICASA’s budget was insufficient to cover the costs. ICASA would need to prepare and present annual plans to the Minister, and the CEO must submit financial information to the Minister and Parliament simultaneously. Fixed term appointments would be made on the Complaints and Compliance Committee, and roles of Council and inspectors were clarified. The Minister explained that the amendments should help to reduce any gaps or discrepancies in time frames between DOC and ICASA, and reduce the potential for conflict. The Bill should address problems with school connectivity, where some operators were not complying, and boost ICASA’s enforcement mechanisms.

The Electronic Communications Amendment Bill also had a number of changes to definitions were explained. This legislation was being aligned with the Broad Based Black Economic Empowerment Act. The Minister would be empowered to make policy on spectrum fees, the references to guidelines had largely been replaced with references to policy, which must encompass a public input process. ICASA’s role in relation to licences was covered in clauses 8 to 10, and class licences in clauses 10 and 11, and ICASA’s role in amending regulations made under subsequently-repealed legislation was also clarified. Broadband was recognised as a priority, and policy must be developed for rapid deployment of electronic communication facilities. A new section 20(3) allowed ICASA to prescribe and impose conditions on how licensees must exercise their rights and fulfil their obligations. Clauses 14 to 16 dealt with alignment of radio frequency spectrum assignments with Cabinet policy. Requirements for financial feasibility in sections 37 and 38 were amended to refer to economic feasibility. It was stressed that inter-connection and facilities leasing must not be discriminatory compared to comparable network services. It was clarified that restrictions on ownership and control of broadcasting licences applied only to commercial broadcasting licenses. Clause 31 ensured that the public would be able to access government directory information free. The Minister was now empowered to set up a National Broadband Council to advise ter on broadband policy and implementation. Section 73 was amended to assist with enforcement of e-rate provisions and discounts, which had caused uncertainty and dissent in the past. Access to information was now made easier under clause 34. Provisions around the Universal Service and Access Agency (USAASA) and the Universal Service Access Fund were set out from clauses 35 to 42, and the Minister of Communcations with the concurrence of the Minister of Finance could in future prescribe how money in the Fund could be used for projects of critical national importance. Community broadcasting service licences were exempt from contributions to the Fund. The Deputy Minister added that the Bill was intended to address past shortcomings in granting licences without sufficient support, dropped calls, monopolies, and effectiveness of USAASA.

Members felt that the presentation was not detailed enough and sought the rationale behind some of the changes. They stressed that the role of the NCOP must be fully understood and respected. They stressed the need for proper monitoring and ensuring security measures, and hoped the sanctions would be adequate. Members were not entirely happy with clause 14 of the ECA Bill, sought more information on the confidentiality aspects, and the consultation process followed to date. They would receive, separately, a summary of the key issues raised by stakeholders and the Department’s response. The conditions around exemption were briefly questioned and explained, noting that provisions in the Act were created with Infraco in mind. Members wanted references to Parliament rather than to the National Assembly. They called for more detail on the quorum, cheque-signing powers, the limitation on serving two terms as Councillor, who would be eligible for appointment to Council and the alignment of wording on political parties. The relationship between ICASA and Sentech was questioned, as well as the Department’s relationship with research entities.
 

Meeting report

Chairperson’s opening remarks
The Chairperson noted that the Deputy Minister would shortly join the meeting, and noted apologies from the Director-General of the Department of Communications (DOC or the Department). Later she also asked the Minister also to ensure that the Director General attended meetings of this Committee, pointing out that although the Deputy Director General had briefed this Committee several times, the Director General had been largely conspicuous by her absence, and this was not the case with other departments. She stressed that the National Council of Provinces was just as important as the National Assembly, that this Committee worked extremely hard and that it needed to be accorded due attention.

Independent Communications Authority South Africa (ICASA) Bill: Department of Communications briefing
Mr Collins Phiri, Deputy Director General, Department of Communications, noted that the Department had been working hard on the two Bills before the Committee today. He said that
currently an ICT review policy process was under way, and several areas in the information, communications and technology sectors had been deferred for the Review. However, since the total Review would take some time to conclude, the Minister thought it appropriate to put through some technical amendments now. He noted that the Portfolio Committee on Communications had invited public submissions, and 22 were made. The Bill was passed by the National Assembly (NA) on 7 November.

The purpose of the ICASA Amendment Bill was largely to insert new definitions and amend those that were obsolete. The Bill would also provide further clarity on the powers and duties of the Authority, and provide for accountability of its councillors.

The amendments were set out clause by clause in more detail (see attached presentation).

Clause 1 was amending definitions of “concurrent jurisdiction agreement”, to encompass other entities and their powers. Previously, there had only been concurrent jurisdiction in respect of ICASA and the Competition Commission, but since then legislation had been amended that brought the Film and Publications Board (FPB) and Consumer Commission also into the loop. New definitions for “days” and “electronic transaction” were inserted, to align with the Electronic Communications Act (ECA). He reminded the Committee that the ICASA Act was passed in 2000 so it was not always in line with later legislation. Other definition changes included correcting the references to the former Telecommunications Act.

Clause 2 added a new subsection 5(3) to the principal ICASA Act, stating that aggrieved people must seek redress (by review process) through a court of law. This included decisions taken in consequence of recommendations by the Complaints and Compliance Committee (CCC), a permanent committee of ICASA recognised by the law.

Clause 3 made some minor amendments to the functions and duties of the ICASA Council. However, it also enabled ICASA to give input to the Minister on matters that may affect or be affected by electronic transactions, under a new paragraph (o). At the moment there was no specific power in the ICASA Act to determine penalties or sanctions, even under regulations. The Bill sought to give this power, and ICASA would be guided by principles of administrative justice.

A new paragraph (q) was also being added to reflect the functions of ICASA In terms of the Postal Services Act. From January 2007, ICASA had assumed the mandate of regulating postal services. Although there was separate legislation to describe its role in this regard, the Minister considered it preferable to include all functions of ICASA in one piece of legislation. A new subsection (3A) was now inserted, requiring ICASA to conclude a concurrent jurisdiction agreement with other institutions when necessary, in addition to the current one with the Competition Commission. Mr Phiri explained that inquiries may be conducted by ICASA itself except where another authority had primary jurisdiction or as covered in subclause (3A)(b). This new wording reflected suggestions made by the Competition Commission.

This clause also dealt with delegation powers of the Council. Because its key function was licensing, this could not be delegated to another sub-committee or person. New wording around revocation of licences appeared in subsection (4).

Clauses 4 and 5 contained amendments that would shorten the time periods within which inquiries were conducted by ICASA, with the aim of speeding up the process, and this was linked also to the new definition of “days”. In the past, inquiries had taken up to 90 days, and it was hoped that this would be shortened.

Clause 6 amended section 5 of the ICASA Act to allow the Council to get expertise and experience in a broader range of fields. The sector was very fast-moving and the Council required the right skills.

Clause 7 amended section 6A of the principal Act to refer to a “collective” as well as individual performance management systems. The evaluation of the performance of a Chairperson or other councillors was conducted by a panel constituted by the Minister, in consultation with the National Assembly. This would allow for more constructive engagement, and better use of resources. Several other amendments were made to enhance the independence and impartiality of councillors. The Minister agreed with the South African Law Reform Commission that performance should not be measured individually, but rather of the whole Council.

Clause 8, amending section 7 of the Act, clarified the term of appointment of the Chairperson and councillors as a maximum of two terms, of five and four years respectively. Councillors, unless involved with academic pursuits, must act full-time and the holding of any other office as members of public interest bodies must be disclosed in writing. The ICASA Council was an executive council.

Clause 9 amended section 11, to provide that at least one monthly meeting of councillors must be held. The quorum was tightened. The increase in the size of the Council had caused difficulties in the past, because of collective decision making that was used by the Council. The Chief Executive Officer (CEO) may attend Council meetings, although s/he had no voting rights, to try to ensure that ICASA was run more openly and efficiently, with closer alignment of knowledge and strategy. The CEO was the Accounting Officer and should be able to communicate Council’s decision to the staff and be up to date on budgetary implications.

Clause 10 amended section 11A of the Act, to provide that minutes of the meetings would made public, to ensure more transparency, being published in the library and on the website, within 14 days. Information which had been deemed confidential under section 4D would not be published. There was a proviso that any information that ICASA was entitled to, in order to carry out its functions, may not be classified as “confidential” by the licensees.

Clauses 11 and 12 inserted a new section 11B, and amended section 12, to improve governance and accountability. ICASA would have to produce a code of ethics within 180 days, covering matters such as mutual respect and collective responsibility, provision of information and high professionalism. Local and international codes had been considered when formulating this new section, and the principles upheld by the Chapter 9 institutions were reflected. Declaration must be made to a register of any gift, benefit or gratuity received by Councillors as a result of actions or omissions under the Act.

Clause 13 tightened the provisions of section 14 relating to the staff and administration.

Clause 14 would allow ICASA to appoint experts without consulting the Minister first, except that if the budget was insufficient, the Minister must be approached for assistance.

Clause 15 and 17 deleted section 14B and 14D, which no longer applied, and section 14D was being replaced by the new section 23A.

Clause 16 amended section 14C, to confirm that information presented to ICASA must be kept confidential, unless it needed to be disclosed under section 12.

Clause 18 dealt with delegation of the signature of cheques to councillors.

Clause 19 inserted a new section 15A, requiring ICASA to prepare and present to the Minister annual plans, which would allow better forecasting of funding, better planning and liaison, as well as more transparency to stakeholders.

The roles of the Chief Executive Officer (CEO) were set out in the Public Finance Management Act (PFMA) and thus had not been duplicated in the ICASA Act. However, there had been confusion around the requirement to produce financial statements, and clause 20 now clarified that the CEO must present the same documents to the Minister, at the same time, as presenting them to Parliament.

Clause 21 amended section 17, to clarify the inter-working of committees and the Council.

Clauses 22 to 26 amended sections 17A, 17C, 17F, 17G and 17H. Clause 22 dealt with fixed term appointments, to enable better continuity on the CCC. ICASA would appoint the Chair of the CCC from the members serving on it.

Clause 23, amending section 17C, clarified that persons who were not licensees but who were in breach of the Act, must be able to bring, or be the subject of a compliant to the CCC.

Clause 24 amended section 17F to strengthen the relationship between the Council and inspectors.

Clause 25 amended section 17G to confirm what other documents may be required. A new subsection 17G(8) was being inserted to require more transparency and administrative fairness to the process.

Clause 26 amended section 17H to increase the fines and bring them in line with other legislation in the sector. The increased fines (stated as maximums, not minimums) and an alternative penalty of imprisonment aimed to be a strong disincentive to breaching the Act. A new subsection 17H(4) was inserted to enable authorisation of inspectors to dispose of certain equipment and simply requirements for storage and safe-keeping of equipment not reaching the prescribed standards.

Clause 27 repealed Chapter IV, which was no longer applicable.

Clause 28 inserted a new section 23A to refer to the State Liability Act.

Clause 29 substituted section 24, to clarify that this Act would take precedence over any other law, except the Constitution, in regard to regulation of broadcasting, electronic communications and postal services.

Clause 30 amended the Preamble, clause 31 amended the Contents, and clause 32 provided for the short title and commencement date as the date of signature by the President.

Deputy Minister’s conclusion
Ms Stella Ndabeni, Deputy Minister of Communications, noted that in many cases there were points of difference between ICASA and the DOC, but they were mostly not personal issues, but difficulties that arose because of time lapses and gaps. This emphasised the point that the Bill was needed to more closely align DOC policy and regulations by ICASA. In addition, in the past there had been some worrying governance issues at ICASA, and the Bill aimed to reduce any potential for conflict. The Department and ICASA must be able to work effectively together on building communications in the country. She cited one problematic area as schools connectivity. At the moment, many operators were not complying with ICASA’s requirements, but the limitations of the current Act meant that ICASA had insufficient enforcement mechanisms. Many of the bigger players had opted rather to pay the low fines, instead of attending to delivery of the universal service obligations. The strengthening of ICASA’s hand, and the sanctions, under this Bill would hopefully persuade them to act properly. The roles of ICASA, Competition Commission and other regulators were also being clarified in order to ensure that ICASA was positioned in a way that would not lead to conflict. She emphasised again that many issues on which there would be substantial policy amendments had been deferred to the ICT Policy Review to ensure that there would not be inconsistencies.

Electronic Communications Amendment Bill briefing
Mr Alf Wiltz, Director: Legal Services, DOC, said that the purpose of this Bill was to amend the Electronic Communications Act (ECA) of 2005. He set out the purposes of the Bill (see attached presentation, slides 2 and 3).

Clause 1 amended several definitions, including:
- Advertising Standards Authority
- allocation, which meant classification of the use of a particular band of spectrum
- assignment, which had a similar meaning to licensing
- broadcasting service radio frequency definition was corrected
- new definitions were inserted to define broad based black economic empowerment, broadband (which would permit a more flexible approach
- there was also a new definition for the CEO of the Universal Service and Access Agency of South Africa (USAASA)
- a new definition for common carrier was intended to refer specifically to Sentech, but did not exclude others from being designated
- electronic communication facility was also being extended to include access to wiring, exchange buildings, carrier neutral and data centres
- the definition of end user was amended to confirm that this person could use services of a  licensed entity or a licence-exempt entity
- ICT Charter and  The Definitions of ICT Charter and International Telecommunication Union (ITU) definitions were amended
- The new definition of licence would make it clear that this now included a licence to use the spectrum in terms of Chapter 5 of the Act
- The definition for political party was changed by the deletion of the word “registered” to achieve better alignment with other sections of this Act and the Independent Electoral Commission (IEC) legislation
- The definition of radio frequency plan was linked to section 34
- Clarification was given on the radio frequency spectrum
- A new definition was inserted for service licence, which would be any service contemplated under Chapter 3
- universal service would in future include an electronic communication network services.

Clause 2 (and other clauses) sought to align the ECA with the Broad Based Black Economic Empowerment (BBBEE) Act.

Clause 3 was amended in order to ensure that the Minister could give policy guidelines on spectrum fees, and would enable the Minister to issue policy directions to the USAASA. Policy may be made on many matters, and this must also be done in line with a broad public consultation process and policy directions.

Clause 4 required a copy of the regulations to be given to the Minister prior to publication by ICASA, to improve coordination.

Clause 5 amended section 5 of the ECA, firstly by replacing the word “regional” with “provincial”. Subsection 5(3)(d), which had required municipalities and small networks to pay for individual licenses, was deleted, and so had subsection (6) which was no longer relevant. Applications were confirmed under a new subsection (8).

Clause 6 amended section 8, which authorised the imposition of additional license terms, and dealt with ICASA’s role in imposing licence conditions.

Clause 7 amended section 9, to link equity ownership requirements with ICASA’s powers to prescribe regulations on BBBEE.

Clause 8 amended section 10 to enable ICASA to amend a licence in accordance with Chapter 10.

Clause 9 amended section 13 to ensure that transfer, letting and sub-letting of individual licences required prior consultation with ICASA.

Clause 10 amended section 16, and dealt with class licences, which may not collectively assume the scope or coverage of individual licences. It also dealt with ICASA’s role, and time frames. However, if ICASA did not respond within a specified time, approval would be deemed to have been given.

Clause 11 amended section 17, and simplified the class licence registration process and turn-around times.

Clauses 12 and 13 amended sections 20 and 21. Section 21 contained guidelines for rapid deployment of electronic communication facilities, especially for the priority of broadband roll out. The changes to these sections sought to replace all references to guidelines with references to policy and policy directions, in view of uncertainty on the status of guidelines.

A new section 20(3) allowed ICASA to prescribe and impose conditions on how licensees must exercise their rights and fulfil their obligations.

Clauses 14 to 16 amended sections 30, 31 and 34. Changes to section 30 would align radio frequency spectrum with Cabinet policy. Management of the use of spectrum must comply with the national radio frequency plan under section 34, as well as under ITU standards. The concept of assignment was introduced to confirm ICASA’s licensing role on radio frequency. The amendments to section 31 dealt with the radio frequency spectrum licences, and in particular accountability to ICASA was dealt with under a new subsection (4A). The Minister must in future address, coordinate and approve any regional radio frequency spectrum plans.

Clause 17 closed the loophole that was apparent under section 35. References to other legislation were updated, in clause 18.

Clauses 19 to 20 amended section 37 and 38. The requirement for financial feasibility was changed to one for economic feasibility, whose criteria were more apt. Inter-connection agreements should not in any way differ from comparable network services, and class licensees would be allowed to enter into inter-connection agreements.

Clauses 21 to 24 amended section 24 to 45, deleting irrelevant timeframes, redefining the reasonableness of facilities lasing requests, ensuring that facilities leasing agreements were not in any way discriminatory compared to comparable network services, and providing clarity on how essential facilities were to be treated. Mr Wiltz explained that these amendments were all aimed at enabling ICASA to act swiftly in compliance with a non-discriminatory access regime, and would nullify exclusivity provisions that were now prohibited under section 43(10) These exclusivity arrangements had originally bee inserted into the Act to regulate provision of under-sea cables, but if any such agreements still existed, they would become invalid one year after the Bill had come into operation.

Clause 25 amended section 55 to ensure that ICASA may continue to regulate scheduling of advertisements, infomercials and programme sponsorships, which were currently covered by regulations promulgated in 1999, but the ECA had since been interpreted to not allow ICASA to continue to amend regulations made under amended legislation, so this corrected the position.

Clause 26 amended section 62, which addressed the obligations of a common carrier who would be deemed an electronic communications network service licensee.

Clause 27 clarified that restrictions on ownership and control of broadcasting licences applied only to commercial broadcasting licenses.

Clause 28 amended section 67 to ensure a clear demarcation between ex-ante regulation, which was the preserve of ICASA, and regulation that now fell with the Competition Commission. These amendments would help ICASA to implement the regulatory regime. Subsection (7) gave examples of  pro-competitive licence terms and conditions. 

Clause 29 removed redundant time frames.

Clause 20 amended all references to “people” with disabilities to “persons” with disabilities”, in line with the UN Convention.

Clause 31 ensured that the public would be able to access government directory information and related services fee of change. Previously the 1020 number cost was carried by Department of Public Service and Administration, but in future calls to the call centre would be free.

Clause 32 inserted a new section 72A, to allow the Minister to establish the National Broadband Council to advise the Minister on broadband policy and implementation.

Clause 33 amended section 73 to assist with enforcement of e-rate provisions and included public health establishments, to make it clear when the discount must be given, and how it must be applied. Mr Wiltz explained that there had been a number of disputes where the operators refused to give discounts, for instance to schools, because they might claim that upstream providers of network were not providing them with a discount, or because USAASA was actually doing the payment for a school, which they claimed was not payment “by a school”. This was now being clarified to ensure the discount would apply in all relevant cases.

Clause 34 inserted a new sections 79A to ensure that liability would not attach to the State or persons employed at 112 Emergency Centres provided they had acted in good faith. A new section 79B would enable access to information held by ICASA, USAASA or any other person to allow the Minister to perform his / her functions, to address the situation where such information had not been forthcoming when requested and had hampered functions such as impact assessment and monitoring, market review, the imposition of remedies or statistics gathering. The person submitting information may still request that it be treated as confidential, and it was subject to the Protection of Access to Information Act.

Clauses 35 and 36 made it clear that USAASA was subject to the PFMA, and sought to improve its governance, including fiduciary duties.

Clause 37 would amend section 82 to remove contradictions between sections in regard to universal access, and clarified what this meant, making reference in the section to broadcasting services.

Clause 38 inserted new sections 82A to 82E, dealing with the CEO of USAASA, to improve governance, and allow for appointment of an acting CEO.

Clause 39 amended section 83, in line with the clause 38 provisions.

Clause 40 inserted references to the Constitution into section 87.

Clause 41 amended section 88, by correcting references to electronic communications network services, electronic communications services, and broadcasting services. Furthermore, if there was a project of critical national importance, the Minister would in future be empowered, with the concurrence of the Minister of Finance, to prescribe how money in the Universal Services Access Fund (USAF) could be used.

This clause also required USAASA to create application procedures, at least every two years, for applying for subsidies, and ICASA would now be obliged to review the definition of under-serviced areas every two years, instead of bi-annually. USAASA would be empowered to make recommendations to the Minister, also every two years, to determine the meaning of needy persons.

Clause 42 amended section 89, to ensure that community broadcasting service licenses were exempt from contributions to USAF, which would boost community services. USAASA was to collect money due to USAF.

Clause 43 amended section 95, by removing the reference to a 24-month time frame, which had by now already passed, and to clarify that nothing would prevent ICASA from repealing or amending regulations made under legislation that was subsequently repealed.

Clause 44 amended the arrangement of sections. Clause 45 amended the definition of common carrier in the Broadcasting Act, to align it with the ECA. Clause 46 set out the short title and noted that different dates may be fixed for different sections to come into operation.

Deputy Minister’s concluding remarks
Ms Ndabeni summarised that whilst there had been substantial strides made on the ICT Review, it had been noted that current licenses sometimes were promoting a monopoly, although it was obviously desirable to create greater competition. When this Act was introduced, not enough attention had been paid to the implications of granting licenses without sufficient support – such as licenses to Pay-TV. Insofar as the radio frequency spectrum was concerned, South Africa had focused on the commercial side, without sufficient balance with security considerations. Sub-leasing of spectrum without notice to the Authority had been one example. Dropped calls must be addressed, and wiring must be leased and operated properly. Monopolies had also become apparent in broadcasting, because of ownership of different radio stations and it would be necessary to redistribute the State asset of spectrum more fairly. Lastly, USAASA must play its part in an effective way. Policy makers had the responsibility to ensure that the delivery agencies were acting as expected and their capacity must be strengthened to enable them to act in line with their legislation.

Discussion
Mr M Sibande (ANC, Mpumalanga) commented, to the Deputy Minister, that the proposals were welcomed, but felt that there was a need for some caution. He said that the Committee had stressed, when dealing with the Film and Publications legislation, that it was indeed necessary to be cautious about security measures and ensure that incorrect information was not circulated. He therefore asked how proper monitoring would be ensured under the ECA Bill.


Mr Sibande noted the references to ICASA needing to be strengthened. He wondered if the clauses now proposed would be strong enough to ensure that there would be compliance, and, failing that, what sanctions would follow.

Mr Phiri responded that broadcasting was something ring-fenced by the Constitution that needed to be regulated, as part of ICASA’s primary mandate, but it was regrettable that sometimes offensive content was broadcast. The terms and conditions were set out in the licences issued to broadcasters, and if it was found that these had been contravened, sanctions could include revoking the licence, or issuing warnings. It was an independent sphere, and the Broadcasting Complaints Commission could also be used by the public. The Film and Publications Board played a key role in relation to classification of films. The DOC had regular interactions with this body on the mandate and each had to understand what the other was doing.

In relation to the problems around the e-rate, Mr Phiri noted that these amendments were looking broadly at the issues. The difficulty was that at the moment there was not a common understanding of how the 50% did apply, and the wording was too limited, specifying schools only. This was now being clarified and the categories broadened, and experience would show whether these amendments went far enough to solve the problems.

Mr Wiltz confirmed that DOC, as the administrator of the legislation, had a responsibility, but practically speaking, ICASA issued the regulations and must amend them to fall in line with amendments in this Bill. The “buck stopped” with ICASA as it must ensure effective implementation of the e-rate and ensure that licensees complied with the obligations in the Act and the relevant regulations.

Mr Sibande commented that the presentation needed to be more user-friendly.

Mr M Jacobs (ANC, Free State) added that Members had received their documents very late, and he was also critical of the fact that certain information given, particularly by Mr Wiltz, did not appear on the documents before Members.

The Deputy Minister apologized that more information was not provided timeously to Members. She said that, in the communications field, information was constantly being updated and this Ministry would love to see information being made available on-line, so that it could be accessed via tablets and smart phones by Members, although she also encouraged them to do their own research and consult other sources and websites, and become fully e-literate. 

Mr Wiltz said that his additional remarks were really only made to clarify the wording on the screen. Most of what had been said in the presentations was also included in each Memorandum on the Objects of the Bill. DOC had, in these bills, been very proactive in ensuring that as much as information was provided, in the interests of openness and transparency, in this document.

The Chairperson reiterated that a couple of substantial points had certainly not been included in the presentation – such as motivations to what had been presented, and that was the concern of the Members. Members needed as much information as possible to go through the Bill again. She stressed that this was a very hard-working Committee.

The Deputy Minister apologised again, and said that the “Conclusion” part of the presentation had been removed, because the Deputy Minister had addressed this in her concluding remarks.

Mr Sibande expressed his disquiet with the proposals to amend section 14 of the ICASA Act, saying that he was not sure that excluding the need for consultation with the Minister was wise. The DOC had stressed that there should be greater transparency and consultation, for instance by requiring the CEO to attend Council meetings, so he questioned why consultation with the Minister was not accorded more weight. He pointed out that the Minister was, after all, responsible for getting the budget approved.

Similar concerns were also expressed by Mr M Jacobs (ANC, Free State).

The Deputy Minister responded that the rationale behind these amendments was that the Authority often needed to respond immediately. Operators were able to, and often did challenge whatever the Authority presented and sometimes the expertise available in-house I ICASA was lacking so that it needed to appoint a expert. One example might be advanced matters on spectrum management. This amendment would avoid delays, for even if a request was referred immediately to the Minister, the processes might result in the request being considered only two weeks later. She reminded the Members that the Minister and ICASA would meet at least monthly so that there was ongoing communication.

Mr Phiri added that the Minister was still consulted where ICASA had exceeded the allocation.

Mr Wiltz also added that initially, the Act required Ministerial approval before ICASA could appoint any experts. It had been argued that this was too limiting, and now the approval was only required if ICASA was out of budget. For ICASA to be dictated to, especially where it was quite reliant on expert appointments, might affect its independence.

Mr Sibande asked what exactly was meant by the references to confidential information, on slide 18 of the ICASA presentation, and pointed out that leaks of information were problematic.

Mr Phiri answered that because this was such a competitive sector, where data was very sensitive, ICASA was subjected to much litigation. That was it was now stated that the Minister may request information helping him to make decisions, because sometimes companies were reluctant to give information that was sensitive to their business. The ICASA Council could adopt a protocol to determine what information could be made public.

Mr Wiltz added that section 4D of the ICASA Act created the framework for confidential information. ICASA required information from operators in several processes, and some of that information clearly could not be made available to just anyone. The operator would have the chance to persuade ICASA that certain information was confidential and that processes were needed to ensure that the information was not released to third parties, to protect commercial information. Trade secrets, financial or technical information or similar information would not be released to others. Generally, ICASA was to be more open and transparent, and it would have to disclose the minutes of its meetings. However, he submitted that it was reasonable to have the due process under section 4, with the restriction on release of confidential information.

Mr Sibande also asked the presenters to be more specific on how and where the consultation would take place, pointing out that there was not always clarity on how consultation on section 76-tagged bills would unfold, and whether the whole Bill, or specific clauses, would be unpacked.

Mr H Groenewald (DA, North West) also asked how and where the public participation process would take place. He noted the reference to public consultation on the presentation on the ECA Bill, but asked where and how the public consultation was doe on the ICASA Bill.

Mr Phiri answered that although the public consultation process had not been outlined in relation to the ICASA Bill, it did in fact occur for the two Bills were taken concurrently to public hearings. Both attracted a lot of attention and interest. The DOC had extended the public comment period, because some of the issues were complex and he assured Members that a long consultation and working period was allowed.

The Chairperson asked for examples of key issues that had been raised during the public consultation process.

Mr Phiri responded that he could list a few issues now, but promised to send the Committee a fuller list of matters raised and the DOC’s response. Initially the amendments also contained elements around spectrum management agency and the establishment of a Competition and Compliance Commission. There were also issues raised on the tariffs in the Act, and in response to both, the DOC did then make some changes to the Bill. Issues having a policy impact, including the size of the ICASA Council and others, were deferred. The ECA stakeholder comments included those around which facilities should be listed in the Act, active and non-active facilities. Clauses on the powers of the Minister and ICASA were strongly debated, and the State Law Adviser helped in drafting the compromise now included in this Bill. Earlier, the DOC had proposed language suggesting that the Minister must issue directives, and ICASA must implement them, but this had been tempered later.

Mr Groenewald asked what mechanisms would be used, and what regulations in relation to broadcasting stations, to ensure protection of the public.

Mr Wiltz said that security issues and social media regulations raised interesting points. Whilst there was a right to freedom of expression, as mentioned by Mr Sibande, this right could be limited in terms of the Constitution. In 2002, when the ECT Act was promulgated, there was provision for content regulation, and there was a huge public outcry. This was not a easy matter to deal with. The DOC would consider it further under the Policy Review process.

The Chairperson asked for examples of circumstances and conditions that would qualify entities for exemption from licenses. She recalled that licence exemptions for State Owned Companies (SOCs) had been suggested in 2007, but this had evoked much opposition.

Mr Phiri outlined that there were conditions around exemption from licences. If a community broadcaster applied, the applicant would not have to wait too long, provided there was frequency available. However, other conditions may apply in different circumstances.

Mr Wiltz added that section 6 of the ECA dealt with licence exemptions and allowed the Authority to prescribe regulations as to which services would not require a licence, and when radio frequency spectrum could be used without a license. The Act set out a few examples – such as section 6 that referred to electronic communications services offered by not-for-profit organisations, private networks and retail sellers.

Mr Wiltz agreed that section 3(1A) had been inserted in about 2007, to create a special licence mechanism for State Owned Companies, referring to the framework for the licensing of a public authority. That was, however, done with Infraco in mind and ICASA licensed it under that special framework.

The Chairperson noted her disquiet that the presentations had made reference to the National Assembly, rather than to Parliament and stressed that there was a need for all departments to recognise the very important role played by the NCOP and to involve it fully. This point had been strongly made also in 2002, so she was expecting that the necessary changes would be made to the Bills.

The Deputy Minister apologised, saying that lessons were being learned along the way, and this was in no way intended to undermine the NCOP. All Ministers must ensure that there was a better understanding of how Parliament worked.

Mr M Jacobs (ANC, Free State) stressed that it was very important that the presenters should give clarity on the rationale behind the amendments. For instance, it was not enough merely to refer to difficulties with the quorum – he wanted more information why and how this arose. He was not happy also with the amendments, without supporting reasons being presented, in relation to councillors signing cheques for ICASA.

Mr Mashile explained that the quorum was formed by the majority – 4 plus 1. The amendment would clarify what would happen when the Chairperson was not present.

Mr Phiri added, in relation to the cheque provisions, that the ICASA Act, linked to the ECA Amendment Bill, had resulted in some functions no longer being mentioned, and ICASA wanted to ensure that one function would not be allocated to one Councillor alone, for this did not always lead to desirable outcomes.  This raised the points about the term of office of Councillors also, and he mentioned that if a Councillor “overstayed” there was a risk that this person may not act always in the best interest of ICASA. It was important to have procedures that would set out what would happen if meetings did not quorate. The signature of cheques was specifically linked to a pattern that had developed, and there was partial restructuring to align the important role of the CEO in relation to accounting responsibility. The ICASA Councillor, as executive, should not be the only one to see to distribution of funds, and this amendment achieved a better alignment for transparency purposes.

Mr Jacobs wondered why it was so difficult for the Council to form a quorum, particularly if the members were serving full time.

Mr Jacobs questioned the reason for limiting ICASA Councillors to two terms, even if there was a time-gap after which a councillor may wish to be re-appointed. He also asked if former Members of Parliament were excluded from later being appointed to ICASA.

The Deputy Minister responded that one of the reasons for restricting the period for which Councillors may serve was the risk of undue influence being brought to bear on councillors who had been in place for too long. She pointed out that the councillors were fully aware, on appointment  that there was no guarantee that they would serve more than one term, exactly the same as applied for Members of Parliament. She confirmed that there was nothing to exclude former MPs from being appointed as an ICASA Councillor. It was important to have a balanced Council with relevant experience and expertise, and that was the primary consideration. Relevant experience from former MPs would be welcomed.

Mr Wiltz explained that whilst section 6 of the ICASA Act excluding “sitting” MPs, of the national or provincial legislature, or Councillors from being appointed to the ICASA Council, by implication those who were no longer sitting would not be excluded.

Mr Jacobs wanted more clarity on the new clauses of the ICASA Bill that sought to specify the role of the CEO, and why this was deemed necessary if it was already in the PFMA.

Mr Phiri explained that the Minister of Finance had consulted with the DOC on this point. A task team had looked at the drafting of the section. The PFMA was meant to supercede other provisions pertaining to public finance matters, and for that reason, the DOC was not encouraged to put any of the financial functions into the ICASA Act in detail, but rather had kept the amendments very simple, in line with National Treasury suggestions.

Mr Jacobs asked if the deletion of “registered” from the reference to a “political party” would affect any that were not registered now.

Mr Mashile answered that a political party was defined in the Act as “any registered party” so this meant those registered with the Independent Electoral Commission at election times, and it was done to ensure that ICASA, when allocating time for campaigning, was in line with what other legislation provided for elections.

Mr Jacobs reminded Mr Wiltz about his previous concerns about Vodacom data bundles that were deemed invalid if not used within one month and asked whether the Bills would address this discrepancy, as he believed the Vodacom conditions on this were not correct.

Mr Phiri said that the DOC shared his concern about this practice, and said that it raised public interest considerations. The Minister had established a process to lower the costs of communication, and this point had been raised again in relation to the need to lower costs, during a workshop in September 2013. Further concerns were raised around the need for certainty on exact rates or tariffs of the service providers, and the fact that their continuous “promotions” might result in loss of certain rights.

Mr Sibande asked for clarity on the relationship between ICASA and Sentech. Whilst he was aware that Sentech mostly dealt with frequency, sometimes the one would pass on problems to the other.

Mr Phiri noted that both entities reported to the Minister of Communications. However, Sentech was licensed to provide signal distribution. This legislation allowed it to provide connectivity, and infrastructure as enjoined by the Electronic Communications network licence. ICASA was an independent regulator so its relationship and powers were different, and there were sometimes delicate points to be negotiated. ICASA might consider a policy directive from the Minister, but take a slightly different direction, and it was necessary to try to build more closely on Ministerial policy in future to reach the desired impact in society.

Mr Sibande noted that many people claimed to be researchers, and he asked if the DOC had any links with the Media Policy and Democratic Projects at University of South Africa.

The Deputy Minister said that there was no relationship with this body. She thought that perhaps the time was now right for guidance to be given to government on who should be allowed to conduct research in the country, because many bodies were funded from outside, and it was unknown what was done with their research. Maybe Parliament needed to take a strong stance to ensure that coordinated research was done. She suggested that perhaps researchers needed to get authority and approval for research.

The meeting was adjourned. 
 

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