Electronic Communications Amendment Bill: discussion

Meeting report

Electronic Communications Amendment Bill

The Chairperson said that because of the submissions still to be received, the programme for the Electronic Communications Act (ECA) amendment bill would in all likelihood be rearranged.

Mr Eric Boskati, Committee Content Advisor, briefed the Committee on the bill. He said the bill was a response to the National Integrated Information Communication Technology (ICT) policy White Paper, which in turn was a response to ICT advancements in infrastructure roll-out, competition in the ICT sector, costs to communicate and ICT regulatory mechanisms and frameworks to meet the developmental objectives of the country’s National Development Plan (NDP). 

He said the problems in the ICT sector were the duplication of infrastructure roll-out, land owners rights as compared to the rights of Electronic Communication Network (ECN) licensees, the lack of clarity on spectrum, and monopolies in the ICT sector. He said the root causes of the problems were a lack of co-ordination, no effective dispute resolution mechanism, the need to use broadband for socio-economic development, the absence of market reviews and/or definitions, and infrastructure bottlenecks related to duplication. He said the Department should define what it meant by the market,

The intended outcomes of the bill were to have a co-ordinated ICT infrastructure roll-out, to include the participation of small players in the ICT sector to create more competition, to have clear guidelines of the rights of landowners and ECN licensees (operators), to have a regulated ICT sector, and to legislate the use and allocation of radio frequency spectrum for the country’s development agenda.

On the long title of the bill, which was “Lowering of cost to communicate”, he said it was not supported by any provision in the Bill, as there was no clause specifically dedicated to this intent as a show of commitment.

In clause 10, on the insertion of Chapter 3A, he said section (6) and section (7) needed re-wording or had to be explained better, as they appeared to be the same.

On clause 13, sub-clause 20A, he said the bill was not specific about the establishment of the Rapid Deployment National Coordination Centre (RDNCC) branches across provinces.

On section 20A(3), on the requirements for the Rapid Deployment Steering Committee (RDSC) membership, he said there was no specification on what qualifications, background knowledge or relevant experience members needed to possess.

In section 20D, on the procedure to be followed in the event that electronic networks or facilities were damaged by the owner, he felt that the procedures to be followed, should damage be done, should also be listed so that disputes may be resolved.

On clause 16, amending Section 25, the responsibility to pay the cost of moving electronic communication networks or facilities should be borne by the ECN licensee, and not by the local authority or landowner, as he felt this was unfair.

He then spoke to who the beneficiaries of the bill were and the costs associated with the implementation of the Act. The establishment of the RDCC and the establishment of the RDSC implied staffing and therefore a budget. The Department noted in the memorandum that it would be funded by existing resources, but he questioned the satisfactoriness of this arrangement. He said that training or workshops for staff by the Department and by the Independent Communications Authority of South Africa (ICASA) as the implementing agency, would be required.

Discussion

Ms J Kilian (ANC) said it was important to determine when the public hearings would take place, as the Parliamentary programme was congested and the Committee needed to do justice to the legislation. She wanted the Committee’s programme, and when public hearings would take place. The Committee needed to engage with a research institution which could identify best practice. She wanted a list of all the submissions and if there were important players who had not submitted submissions, the Committee should invite them to do a presentation.

Ms M Shinn (DA) said she had submitted a letter to the Committee Secretary detailing her basic concerns like, for example, constitutional issues on the tagging of the bill as a section 75 bill. She questioned the purpose of the bill, and why it was being rushed through. She did not see the bill giving the outcomes that were envisaged. She said it impacted on the provinces and would impact on the ICASA Act, amongst others, and the Department would constantly have to update the bill. It would also affect other departments, like the Department of Environmental Affairs. Sight had been lost on who the bill was being legislated for, and she questioned whether it was for Wireless Open Access Networks (WOAN). There were other ways new entrants to the market could access the sector. She asked where the profit motive was on the wholesale side of the sector, because the wholesale side would have to operate on a cost basis.

There was no time in the current Parliament to push the bill through, and she suggested that the bill be interrogated at a basic level and then a request be made that the bill be withdrawn and tabled in the following Parliament. The Committee could be engaging for weeks on the issue of spectrum policy because a spectrum auction was coming up.

Mr C Mackenzie (DA) said the bill was wrongfully tagged as a s75 bill. He said the spectrum auction would not be delayed by working on the bill.

Ms N Ndongeni (ANC) referred to the Committee’s programme, said she would be attending another meeting the following day.

Ms Kilian said the Committee could not work on the bill without having the Portfolio Committee on Communications present, as they had the oversight function over ICASA. There was a need to get legal services to do a presentation on the issues raised in Ms Shinn’s letter. She would be reluctant to follow a course which let the bill be referred back to Parliament. An alternative was to work on the bill until Parliamentary business lapsed. A provisional report could then be compiled for the next Parliament, for example on the tagging, so that that issue at least could be clarified. 

The Chairperson said that he had said before that he would not want to continue with the bill without the backup of legal and research staff to support the Committee in its deliberations. He had requested staff, but it had not yet materialised.

Ms Yolande van Aswegen, Principal State Law Advisor, said she had provided a legal opinion to the Speaker on the question of the tagging of the bill. The gist of the argument was that the State Law Office was following the Constitutional Court ruling on the Tongoane case, in that the bill did not fall under Schedule 4 and the bill as a whole did not impact on the provinces substantially in matters affecting the provinces. Therefore, the State Law Office’s had recommended that the bill be tagged as a section 75 bill. Where there were grey areas in the bill, it was safer to tag such a bill as a section 76 bill so that it would not be challenged. The final decision was done by the Joint Tagging Mechanism (JTM).

Mr Mackenzie asked if there was a possibility that the bill would be challenged, and if so why not tag it as a section 76 bill to avoid the challenge.

Mr Robert Nkuna, Director General: Department of Telecommunications and Postal Services (DTPS), said that the bill was part of a sequenced legislative program. The ECA bill was part of supply side legislation, based on infrastructure roll out. There was state-owned company reform legislation dealing with the State Information Technology Agency (SITA), Broadband Infraco (BBI) and Sentech, and then there was demand side legislation that was being brought before the Committee in sequence. The bills that would be brought before the Committee were interdependent and interrelated and needed to be seen in context, as a whole, and not as isolated pieces of legislation.

On how to deal with spectrum allocation, he said that if the market was left as it was, then the Department may need to institute the functional separation of companies by splitting them up into wholesale and retail, as had happened in the case of British Telcom. Industry did not favour this approach, and the WOAN approach was preferred, as it would not disturb the existing status quo.

On whether the auctioning or licensing of spectrum would do away with the need for the bill, he said Cabinet had said the Department could go ahead and license, but there were certain enablers that only legislation could deal with. The Department would give a 25-year review to the Committee on how it had dealt with these issues.

Mr Mackenzie asked why there was opposition to tagging the bill as a section 76 bill.

Mr Alf Wiltz, Chief Director: Telecommunications and IT Policy, DTPS, said the Department was not expert on tagging and had acted on the advice of the State Law Advisor.

He said a lot of issues around the bill regarding the rapid deployment chapter, placed a lot of obligations on municipalities. After receiving a lot of objections based on the practicality of the legislation, the Department had cleaned some aspects out of the rapid deployment chapter and dealt with the issues via a memorandum of understanding (MOU). The Department was not operating in the municipalities’ space. The ECA bill, since its inception in 2001, had always been a section 75 bill. He said the tagging of the bill was a procedural matter.

Regarding the bill, he said the Department was not acting in a vacuum and there had been no challenge to the White Paper to test whether it was acting within government policy. When the DTPS had started the process, a number of the bills were very interlinked. Initially the Department thought that they could process the bills at the same time, but then realised that it would not be possible because it created practical difficulties. The bills were therefore treated as stand alone bills. ICASA could still operate under the bill. As other bills were passed, they would assert themselves and the ECA would be amended. The legislation would be continually updated and would take more than ten years. This bill was just a small bit, because the White Paper would generate ten bills.

On the constitutionality of some clauses, he said that the bill would not change ICASA’s independence. The “must consider” provision in section 3 was not changed, and remained. Operators had a vested interest in maintaining the status quo and would oppose changes, and had raised objections on the constitutionality of almost every part of the bill.

On spectrum allocation, he said that it was a critical imperative, but the bill also contained other critical issues that needed to be resolved. There were risks regarding the way the spectrum matter was resolved, as in the process allocation frameworks were made and there was more high demand spectrum which would become available. There was a risk of being legally challenged on the current policy direction processes and the ICASA processes.

On the presentation by Mr Boskati and the reference to reducing the cost to communicate, he said he had previously proposed a section in the bill allowing the Minister to regulate the retail rates, but because of pushback that had not been imposed, and relief had been sought in improving competition and this was what the bill was all about. Most of the bill was about reducing the cost to communicate.

The Chairperson asked how and where the Committee would see a reduction in the cost to communicate.

Mr Wiltz said that he could do that by going into detail when dealing with the clauses to see where and how it would result in reducing the cost to communicate.

On the contention that sub-clauses 6 and 7 of clause 19A were the essentially the same and could be combined, Mr Wiltz said that they were two different things.

He said Mr Boskati had made a significant point regarding the clause on landowners not causing damage to property.  The clause needed to be fleshed out to give it more body.

Mr Nkuna said that the matter of taking powers away from ICASA had been raised. The Minister was responsible for the allocation of radio frequency spectrum, and ICASA was responsible for the licensing of the spectrum. The Minister did not determine who got a licence. The rationale behind needing to make clear the Minister’s and ICASA’s powers was for cases where, if ICASA made a submission to the Minister, the Minister could, if he held a different view, decide the matter. This was what was being made explicit in the bill to avoid uncertainty.

The Chairperson said it would want to hear from ICASA whether the bill infringed their rights.

Mr Moses Mashisane, General Manager: Regulatory Affairs, MTN, said MTN would be making a written submission and also put in a request to make an oral submission. MTN was concerned that the bill was being railroaded through quickly and it would be raising some issues which it had already raised with the Department.

Prof Andrew Barendse, Managing Executive: Regulatory Affairs, Vodacom, said Vodacom had submitted its written submission which included an appendix containing a socio-economic impact study as well as a proposed redraft of the bill. It requested that  two hours be set aside at the oral hearings for its presentation.

Mr Siyabonga Mahlangu, Group Executive: Regulatory Affairs, Telkom, said Telkom would make a written submission. He said it was an opportune time for Parliament to guide the sector. The choices made would have an impact on the country’s economy and on investment in the country. Telkom would address the open access concept at the oral hearings, and Parliament would be well advised to get economic, technical and legal assistance. Telkom had commented on earlier drafts. He did not know what reasons the Department had for not taking into account their comments on, for example, WOAN. The current version of WOAN was a watered-down version of Telkom’s opinion, so Telkom did not support it.

Ms Katharina Pillay, Managing Director: SA Communications Forum, said the Forum would be making a submission and that it had made comments on previous drafts of the bill.

Mr Nkuna said 43 companies had made submissions on the draft bill. He had suggested that ICASA present its position in public. Many would not agree if the status quo was maintained. Big companies had to make representations on how other companies could enter the market. A decision needed to be taken in the interests of existing companies and new companies.

Ms Shinn agreed that industry needed to be reshaped, but it was not up to the Department as to what the law finally said. That was the remit of Parliament.

Ms Kilian wanted clarity on the Constitutional provision of section 192. How was communication and broadcasting separated, because broadcasting was protected by the Constitution.

On the ICASA court case of 2016, Mr Wiltz said that previously ICASA had issued an invitation to apply (ITA) for high demand spectrum. The Minister’s view was that ICASA could not issue an ITA until it had considered the Minister’s policy; that the ITA contradicted the 2013 radio plan; that the ITA failed to promote competition; and that the White Paper was not finalised and was in the process of being approved by Cabinet.  ICASA had proceeded, knowing that a major policy change was in the offing, and the court had interdicted ICASA from proceeding.

The Chairperson said there was a likelihood that the Committee would not meet, as the programme would be revised. The submissions would be assessed, and a programme would be developed, but oral submissions would be heard the following week.

The meeting was adjourned.