Round table discussion on spectrum licensing & management in telecommunication & broadcasting sectors as well as its implications for 4IR

Meeting report

Opening Remarks by the Chairperson
The Chairperson opened the virtual meeting and said that the Independent Communications Authority of South Africa (ICASA) would be facilitating the session.

Ms Palesa Kadi, Acting Chairperson of ICASA, invited the Council for Scientific and Industrial Research (CSIR), the National Association of Broadcasters of South Africa (NAB) and the South African Communications Forum (SACF) to give their presentations.

CSIR
Dr Ntsibane Ntlatlapa, Manager: Networks and Media Competency Area, CSIR, gave an overview of the council’s mandate and technology sector clusters. He spoke to the impact that was wanted from the fourth industrial revolution (4IR), the technological trends in 4IR and the impact of Covid-19 which propelled the world into “a future where technology has become a critical component of the way we live, work, and relate to one another”. These digital services required extensive digital infrastructure and wireless digital infrastructure required spectrum, with 5G emerging as the lead mobile standard for most 4IR use cases. He said that America and the UK had released some spectrum in the 6GHz range and then spoke to spectrum licensing and management options to unlock maximum value.

He recommended the development of a new spectrum roadmap to support South Africa’s 4IR agenda and that the current IMT roadmap should continue to be updated once new bands were identified for 5G and future generations of mobile telecommunications. Additional spectrum should be identified for spectrum commons to enable low-latency and faster Wi-Fi; additional secondary spectrum markets should be opened. He called for the establishment of a publicly-accessible, central spectrum-use database to promote transparency of public use of spectrum as a central public and private sector spectrum database that would be accessible to the market should permit visibility of potential sharing opportunities and allow more efficient and innovative use of spectrum going forward. The database could be leveraged for planning purposes by both the state and the industry.

NAB
Ms Nadia Bulbulia, Chief Executive Director, NAB, provided a high-level overview of the NAB and the role it played in the regulated ICT Industry.

Ms Tholoana Ncheke, Executive: Policy and Regulation Spectrum Management, NAB, then spoke to the legislative context and the provisions of the Electronic Communications Act section 2(e).

Mr Thabo Makenete, Deputy Chairperson of the Technical Committee of the NAB, spoke to the challenges experienced by the NAB. These included the future of broadcasting and the spectrum needs projected by policy makers and the regulator; Digital Terrestrial Television (DTT) Migration; the Digital Audio Policy & Regulatory Framework; JSAG processes; the monitoring of efficient use of spectrum; skills/capacity constraints in frequency spectrum management; concerns regarding Public interest objectives being balanced and fair across broadcasting and telecoms services; increasing interference experienced by broadcasters from other spectrum users.

Mr Andy Louis, Chairperson of the Technical Committee of the NAB, then spoke to Television and the rise of OTT, Digital Migration and TV advertising, Radio and the effect of podcasts; as well as demand listening and digital radio. He then spoke to the challenges posed by 4IR, which were:

• An increase in inequality due to unequal access to technology
• The development of a segregated job market of “Low Skill/Low Pay” and “High Skill/High Pay” segments
• The opportunity for extreme ideas and ideologies to spread
• Cyber Security
• Advanced global competition by 4IR-ready companies
• Content (scripts, novels, art, music, etc.) produced through artificial intelligence applications
• Technology drivers of 4IR striving to reduce human interaction whilst seeking to increase profitability
• The lack of a coherent national strategy on 4IR technologies

He then spoke to the opportunities presented by 4IR and 5G connectivity before noting the following concerns: that 4IR would herald the end of jobs and people would be replaced by machines; that the fusion of technologies blurred the lines between the physical, digital, and biological spheres; that there needed to be agile policies, policy certainty, connectivity and coverage, secure data transmission, future fit communications systems, sustainable communications infrastructure and an expanding internet of things; and that the delays in publishing of the Audio-Visual Policy had adverse implications on how the sector could respond to 4IR.

SACF
Mr Shiletsi Makhofane presented on behalf of Ms Katharina Pillay of the South African Communications Forum (SACF), who was absent due to a family bereavement.

Mr Maxim Naidoo, Executive Head: Technology Regulation, Vodacom, said that Covid-19 had brought 4IR forward and highlighted the challenges and chasms of the system. The allocation of temporary spectrum was necessary and it had helped the country, and it generated a new baseline in demand. He said that key issues were that there should be sufficient spectrum to enable efficient rollout with the correct spectrum mix in an environment that promoted sustainable investment. He then gave an overview of spectrum, noting the current context, including South Africa’s, changed economic circumstances resulting from the investment downgrades, delays in digital migration with no clear timeframes, and access to temporary spectrum which had provided a peek into what could be achieved. He also noted the positive impact of the temporary spectrum allocation as well as the challenges in deploying the temporary spectrum. He highlighted the urgent need for the licensing of high demand spectrum at appropriate spectrum pricing and with sufficient spectrum allocation to ensure efficient rollout and with clear rights to enable sustainable long-term investment. All this was made possible through quick policy and regulatory actions and investment commitments.

Discussion
Mr C Mackenzie (DA) asked where the CSIR thought the most growth and opportunity for new entrants was, in infrastructure or in services. He asked if anyone was using 6G currently and asked about the health risks to people in the use of the higher frequencies spectrum. He asked how value was defined concerning the unlocking of shared spectrum. Who would control the database the CSIR had suggested be established?

He asked the NAB if it saw any conflict in spectrum and shared allocation. He asked if any delegates attended the WRC conferences where the allocation of bands was decided.

He asked the SACF what its recommendations were to ICASA on spectrum bundling and the design of the auction for spectrum. How big should the spectrum be? A year ago, SACF’s emphasis had been on the release of spectrum but this had changed to what would be the cost of buying spectrum. He asked what was more important: raising revenue for government from the auction or coverage or what weighting should there be between the two. He asked what an investment friendly environment was.

Ms P Faku (ANC) asked the SACF whether it was happy with the temporary spectrum allocation. She said that there was a disparity in network coverage between Sandton and Soweto and network coverage not being accessible in rural areas. She said data was still expensive in South Africa and had hoped that, with Covid-19, data would be cheaper.

She asked NAB if its research was done quarterly or annually and if the SABC took up NAB’s recommendations.

She said that there was a perception that the advantages of releasing spectrum were an opportunity for new entrants into a sector dominated by the big guns. The main disadvantage of auctioning spectrum was that the biggest players would take all. This would exclude the majority of SMMEs. She was glad that there would be opportunities for new entrants through the wholesale open access network (WOAN). She asked if there were opportunities for SMMEs to participate in white space spectrum and unused TV frequencies. She asked how SMMEs could benefit from this programme, considering that they did not have money.

Ms Z Majozi (IFP) asked how new players in the sector could get an opportunity to benefit, given the big players in the sector. How did one ensure healthy competition between big and new players? What study informed the release of spectrum? How certain is the NAB that the people of South Africa would benefit from the release of spectrum? How certain is the entity that prices would not be inflated to compensate for what the players paid at the spectrum auction? How could SABC be assisted to become on par with DSTV and MultiChoice?

Responses
On where the most growth and opportunity for new entrants lay, in infrastructure or in services, Dr Ntlatlapa indicated that there were opportunities in both, as infrastructure was not the same everywhere and there were opportunities for technology services in outlying areas. He said that there would be lots of innovation in services provided that infrastructure was on an open-access basis. There would be more opportunities in services.

On the 6GHz spectrum, he said that it was mostly used by satellite stations rather than terrestrial stations. There were a lot of opportunities for usage of this spectrum. On the health implications of the 6G network, he said that the Department of Health had endorsed the report of one of the international agencies that had set the safe limits of emissions coming from base stations. What was lacking was reporting structures that ensured that infrastructure developers were observed.

On shared spectrum and the creation of value, he said that the UK case was where they enabled the sharing of spectrum through the licencing of 70 additional new players which plugged the network gaps that had existed. This was where value was created.

On the control of the database, he said that the regulator or a designated entity would control a database. CSIR had the capability to do that; his view was that it had to be an obligation which the regulator did or that it was outsourced to a designated entity.

On whether any delegates attended the WRC conferences where the allocation of bands was decided, Ms Bulbulia indicated that the NAB and its technical engineers engaged with government departments in preparation for participation in the conferences where some of NAB’s members were rapporteurs.

On the question of key competition in the industry, she responded that healthy competition in the industry was in the best interest of end users. What could be taken away from the engagement was how the association planned in the best public interest to ensure that services were diverse robust and not skewed.

Mr Makenete added that NAB did attend WRC conferences and participated with the telecommunications industry in the preparatory work.

On competition, he said that the NAB did not look at it as a competition, rather it was how available resources would be shared to meet the needs of the public. Even at the WRC it was a matter of compromise to reach agreement on the sharing of allocated bands.

On spectrum bundling, Mr Naidoo said that multiple approaches could be taken when auctioning spectrum, but there was currently a shift from the old bundled spectrum approach because in the new world new players had different business models. Such models included only using 5G, only operating in high density areas and shifting away from the initial focus of voice services. This meant that there needed to be a move away from forced bundling and that there may be a need to rethink the clustering of bands. He said big players would always have demand for low band spectrum. Temporary spectrum allocation, because of Covid-19, had shown that there was demand in the current framework for customers using broadband applications in all those bands.

On Covid-19 as a possible catalyst for 4IR, he said that the temporary allocation of spectrum blocks was useful and practical to deploy in large measure and brought a lot of benefit in terms of capacity that was made available.

On SACF’s shift in emphasis, he said it was because initially industry had wanted to get past the first hurdle of getting to a spectrum assignment process. Now they were at the point of determining the details of the assignment process. Significant trade-offs needed to now be considered. The mobile industry had been a pillar of growth, whilst acknowledging that it had not had an impact in rural and outlying areas. The industry was trying to resolve these issues where possible. The country was in a dire situation from a revenue perspective and the spectrum auction was a valuable opportunity, but there needed to be a trade-off between revenue and expectations of delivery. Industry was committed to invest in an environment that allowed for sustained delivery and network performance and this was essential for the growth of the economy.

On what an investment friendly environment was, he said investment envelope was around R100bn from the large telecom operators where there was assurance that stakeholders were at least balanced. To get the full benefit out of the mobile spectrum one needed to continue on this trajectory and even accelerate it. Investors would require returns to continue investing but this was not restricted only to the mobile sector and the environment needed to be supportive to encourage investment going forward.

On the disparity in network coverage, he said that these were challenges to meet the entity and it was trying to do its best to adhere to the social compact but certain factors were beyond its control.

On accessibility for people living in rural areas he said that the current framework for investment did not easily satisfy all areas. There needed to be a different model to engage with rural ICT infrastructure development and coverage. He said that the entity were continuously innovating to provide new and better services and were trying to work in partnership with government and communities. One of the challenges was the security of infrastructure where, in Soweto, for example, there was constant theft.

On data prices, he said that significant inroads had been made but there needed to be a balance regarding what was absolutely required and data for premium services.

On how spectrum would benefit ordinary South Africans, he said that the entity would provide a multiplier effect on existing infrastructure, better capacity and better focused investment.

On what studies informed the release of spectrum, he said that he was aware of a number of studies that were done by various consultants.

He noted the comment by Mr Makenete  on competition on spectrum between the broadcasters and mobile operators and he agreed that there was a South Africa perspective when presenting to the WRC. It would be helpful in this regard to ask what services consumers needed and wanted going forward. This would serve better on how to allocate or apportion the spectrum.

He said that the International Commission on Non-Ionizing Radiation Protection (ICNIRP), an affiliate of the World Health Organization, was used as the reference standard to test for radiation at sites.

Ms Kadi said that ICASA should respond on the aspect of SMMEs. She said that ICASA had resolved to seek feedback on the assignment of licenses gone and of the use of the temporary spectrum and how citizens benefited. This mid-term report would be completed before the end of August.

Ms Leah Maina, ICASA Executive for Licensing, said that in terms of the design of the auction it was geared to encourage participation by SMMEs taking into consideration that they did not have strong financial capacity so certain lots would be set aside to encourage participation. There would be various obligations around open access to SMMEs. WOANs were geared towards empowerment and to encourage mobile virtual network operators (MVNO) and SMMEs to get into and participate more fully in the ICT sector. WOANS also imposed various obligations and concessions to make it easier for MVNOs to participate in the process and would encourage transformation by increasing the level of empowerment required to participate in the WOAN processes.

Follow-up questions
On spectrum sharing as it linked to infrastructure sharing or roaming, the Chairperson said the latter was left to commercial agreements. He asked what the CSIR suggested this should be addressed, especially for new entrants to the sector – given the transformation agenda and the exclusion of entrants.

Regarding the possible perpetuation of the digital divide, he asked what was recommended and suggested in relevant strategies to ensure the poor were not left out. This was important for the aftermath of the pandemic, given the increase in unemployment.

Regarding issues raised by the SACF, he said that there was the temporary spectrum allocation and then investment was done in 5G infrastructure. What happened when the temporary spectrum allocation was withdrawn? Would there not be a perception that those who got spectrum and deployed infrastructure would already have it and this was an unfair advantage? What proposal is there in the sector to mitigate these issues?

Regarding the NAB, he said that they raised a number of policy and regulatory issues. Had these matters been raised in joint advisory teams and were the Department and Regulator advised? Was there some role Parliament could play to get these matters addressed?

Were the technological advancements compatible with what the country had or did it mean dropping everything and looking at something else.

Ms Faku said that her question on the SABC was not answered.

Responses
On spectrum sharing and infrastructure sharing, Dr Ntlatlapa said that there were two components of enabling additional players. Infrastructure sharing was based on the policy that came out in 2016 which was around open access and not based on commercial contracts which could dictate who could share their infrastructure and what prices to charge. The sharing of infrastructure dovetailed with spectrum sharing. Spectrum sharing enabled the new players to get on-board. The amount of spectrum available was not enough to support a large number of infrastructure players. Some of the infrastructure players could not be interested in the national market if the secondary market was opened.

On the perpetuation of the digital divide, he said that the business models were different for different operators and this led back to having secondary access to spectrum to cater for those not catered for by the different business models; this was possibly where state intervention could play a role to enable areas that would otherwise not be covered commercially by the big telecom players.   

On the policy processes, especially the audio-visual paper, Ms Ncheke, said the NAB had raised the issue at various forums and at various interventions where policy processes had been initiated by the Department or by the Authority because there was uneven competition. The regulation authority was more focussed on licensed broadcasters but there was a proliferation of online content platforms which distorted competition and the issue of the audio-visual paper was a longstanding one.

On the SABC, she explained that when one had this unfair competition with the introduction of other online platforms it did have an impact on its ability to deliver effectively on its mandate as a public broadcaster. She indicated that the NAB, as a consensus organisation, did not touch on competition issues specific to a particular member but that as the public broadcaster it played a key role and the NAB did make inputs on high-level principle issues and funding.

On the research that the NAB conducted, she said that the entity responded to issues raised by Members but there were no set time intervals. The NAB also responded to topical issues as they developed.

On technological advancement, Mr Makenete said that there was investment done in DTT and that there would be time for DTT to go; he did not think it was that time now. DTT was thriving in parts of Africa driven by policy and regulatory support. He said that could not predict the level of that engagement. From the public’s perspective, DTT was getting a lot of choice on what platform they were getting their content delivered.

Mr Naidoo said that one of the things not considered regarding the way forward was DTT migration. The SACF was not giving up on DTT but needed greater certainty on the process that would unfold. He believed that ICASA was working on an accelerated migration process and that it be in line with the timing that had been proposed; this was also relevant to how services would be extended to rural areas as this was the right frequencies which would allow the greatest reach and efficiency in rural areas.

On spectrum sharing, he explained that there was also a context of timing. The conversation on spectrum-sharing was at an early stage of deployment. In England the authorities had been aware that a licensee might install infrastructure and develop a market where someone at a later stage would come in. The question was what the process that the country wanted to unfold nationally was; did it want the experimental pilot cases as done in the UK as the main thrust for the next year or two, or to develop the prospects for these types of licensing regimes by focusing on leveraging off the current regime of licencing spectrum?

On the Chairperson’s question, he responded that recognition of the investment in infrastructure was going to be key going forward. Concerning the temporary spectrum allocation, it was clear from the growth and traffic levels that this was a success story. Given the licencing period, he recommended that a discussion on balancing perceptions was difficult but necessary one because if one did not get additional licencing of spectrum either temporary or licencing new spectrum then consumers would be severely disappointed.

The meeting was adjourned.