DCDT, ICASA, FPB, NEMISA & SENTECH 2021/22 Annual Performance Plans; with Deputy Minister

Meeting report

Opening Remarks

The Chairperson greeted all present, including the Deputy Minister, the Department and entities. On 7 May, the Committee had had a meeting dealing with the state of readiness for the 2021 Local Government Elections (LGE). He expressed his appreciation for the information that had been received. He had tried to go to the Mogale City post office after seeing that information, and had seen queues of service delivery to the people. He appreciated the negotiations that had led to the service delivery.

He referred to the notice convening this meeting, and said that there would be a change in the programme. The South African Post Office (SAPO) had been meant to present its 2019/20 annual report, but he had had correspondence from the Auditor-General of South Africa (AGSA), who mentioned that there were still matters outstanding that were being resolved. AGSA had committed to give feedback during the course of the day, as there had been engagements yesterday. For that reason, it had been agreed that SAPO would present their annual report at tomorrow’s meeting, before they presented their APP. It was clear that in discussion of resolutions, this had to be taken seriously to avoid a situation where the Committee’s oversight would be under question. He had also asked that SAPO be consulted, so that by the time this decision had been formally presented here, it was understood that the reasons were not malicious, but were about allowing the AGSA and SAPO to resolve the matters that were outstanding, as that information would go into the annual report.

Apologies were accepted from the Minister, who was attending a National Coronavirus Command Council (NCCC) meeting. The Deputy Minister was present, but was excused to leave early.

Ms Pinky Kekana, Deputy Minister of Communications, said she needed to attend a session in preparation for the World Telecommunication and Information Society Day. The session would engage with the Information and Communication Technology (ICT) small, medium and micro enterprise (SMME) chamber, and it would begin at 10h00. With the Chairperson's permission, she would join the session after she had introduced the presenting team.

The Chairperson replied that a concern had been made before, that the Members would prefer to have the political leadership present when they were dealing with matters that related to the Department. The same message had been relayed to the Minister. Given the urgency of matters relating to the NCCC, the Committee did appreciate that the Deputy Minister had been able to come through. However, this was still a matter that the Committee wanted the Ministry to consider quite seriously, especially when the Committee meetings were held within the slot that the Committee meetings had, while also understanding that on some days there was Cabinet work, and other work that was given to the mandate of the Ministry. He commented that the Committee's meeting slot was on a Tuesday, and asked that the Ministry take that into account when planning. The Committee was also reasonable, that there would be other engagements that might make it difficult for particular days. The apologies were noted.

Mr C Mackenzie (DA) said that when the Deputy Minister appeared before the Committee so often and regularly, when she did not attend then the Committee really did notice. He thanked the Deputy Minister for her attendance.

Apologies were also noted from Ms P van Damme (DA).

Introductions by Deputy Minister

Deputy Minister Kekana said it was a great pleasure to introduce the newly appointed council of the Film and Publication Board (FPB). This meeting with the Committee would be their baptism of fire, as they would be formally inducted tomorrow. They would be led by their chairperson, Ms Zama Mkosi. This was a formidable team with a wealth of experience.

There had been many lessons learnt in the previous financial year, 2020/21. Covid-19 was one of the issues that had confronted the Department with serious unintended consequences. The support from the Committee was appreciated, especially when reviewing the APPs and ensuring that the Department reprioritised. The Committee had been very patient, considering the competing challenges that the Department had faced in confronting the Covid-19 pandemic.

The presentations that would be made today focused more on what the Department would be doing, having learnt lessons from the previous financial year. It would focus on the economic recovery programmes of the Department and its entities, to ensure that it rose to the occasion, gave hope to their people, and especially because Covid-19 had made them leapfrog into the technological space, where the Department was directly affected.

Department of Communications and Digital Technologies (DCDT) Annual Report 2020/21

Ms Nonkqubela Jordan-Dyani, Acting Director-General (DG), DCDT, said that the presentation on the APP and budget would follow on the strategic focus of the economic recovery. Whilst the Department was already within the medium term strategic framework (MTSF) cycle, there had been a number of changes. Firstly, the implications of Covid-19 had required the Department to fast-track the issues related to connectivity, and in this regard, the President had mandated that the Department should switch off by 31 March 2022. The Department's plans needed to change accordingly.

A certain issue was that last year’s cycle did not have the outcomes of the Fourth Industrial Revolution (4IR). The Department therefore had to include the 4IR programme. There was also a new programme linked to the economic recovery, which was the Digital Economy Masterplan.

With regard to the Department's performance, the impact statement remained the same, in that it seeks to digitally enable citizens with secure and affordable universal access. The Department therefore had four outcomes.

· Outcome 1: Enabling Digital transformation policies and strategies (slides 5-6)

The international relations and engagement strategy was approved last year, and seeks to support the programmes within the country, attracting partnerships to advance the Digital Economy Masterplan, as well as the 4IR ambitions.

Development of the business case for the Regulatory Reform Bill, to see how the regulatory entities could be much more streamlined.

· Outcome 2: Increased access to secure digital infrastructure (slide 7)

Sustaining the provision of broadband services to 970 connected sites, for which the Department did not receive the funding for this year. The Department was busy with a feasibility study for Phase 2, and trying to mobilise private-public funding.

Sourcing of funding for the household connectivity programme, with an ambitious target to ensure that 80% of broadband access was achieved by 2024.

Operationalising of the Digital Transformation Centre, which was key for SMMEs, and to promote local intellectual property (IP) and retain this wealth of knowledge within our borders.

· Outcome 3: Transformed digital society (slide 8)

Fast-tracking connectivity in the country, due to Covid-19.

· Outcome 4: High performing portfolio to enable achievement of their respective mandates (slide 9)

Ms Joy Masemola, Chief Financial Officer (CFO), DCDT presented the financial information (slide 10-14)

The total budget for 2021/22 was R3.693bn, most of which was spent on Programme Four -- ICT enterprise development and state-owned entity (SOE) oversight, and Programme Five (ICT infrastructure support.

Independent Communications Authority of South Africa Annual Report 2020/21

Dr Keabetswe Modimoeng, Chairperson, ICASA, led the presentation.

· Outcomes (slide 6-7)

Status of social cohesion enhanced. This would be achieved through licensing, because licensing on various broadcasting platforms enabled plurality.  

· Situational Analysis (slides 9-12)

ICASA’s mandate was ever expanding but their budgets were ever shrinking. This made it really difficult in the long run to have a meaningful regulatory impact.

On the economic front, there was subdued gross domestic product (GPB) growth, which was an issue and had a direct impact on investments made in the sector.

Over the past 24 months in the telecoms space, there had been issues of battery theft at cellphone towers, and as a result there had been network blackouts in many areas. Dr Modimoeng highlighted the linkage of social ills -- unemployment and crime -- that impacted the telecoms sector.

He emphasised the litigious nature of the regulatory sector. It was a global regulatory phenomenon and illustrative of a vibrant democracy, where industry knew their rights. It was a big threat and was directly linked to the sub-optimal funding model. If not properly funded, ICASA would make decisions from a regulatory perspective, but fail to defend them.

Mr Willington Ngwepe CEO, ICASA, presented the SWOT analysis (slide 12) and the strategic focus area (slide 14).

• Strength – ICASAs clearly defined mandate, in terms of the legislation that outlines its mandate;
• Weakness – Sub-optimal funding model. There had been initiatives and engagements to try and address this issue.
• Opportunity – ICASA as a key enabler for technological innovation and anticipated to play a critical role in the 5G deployment.
• Threat – the issue of litigation over-emphasised.

Mr Tebogo Matabane, CFO, ICASA, presented the financial information (slides 17-21)

ICASA as a regulator of the industry was fully dependent on the budget allocated by government, so if and when it suffered budget cuts, this would directly affect its ability to fully implement its mandate.

77.6% of ICASA's budget went towards compensation of employees. This excluded the new positions that ICASA had in the new structure approved by Council. These still needed to be implemented, but due to the limitation of financial resources, the organisation could not fill those positions. These were the same positions that ICASA planned to recruit and implement a structure to enable them to achieve the rollout of the 5G spectrum allocation. Both the Department and National Treasury had received pleas to consider providing support to the employee-related budget allocations.

Ms Tshiamo Maluleka-Disemelo, Chief Audit Executive, DCDT, presented the key risks and mitigation measures (slides 23-25)

ICASA had employed a risk identification and assessment process, and elevated six strategic risks. These included the delay in regulatory interventions, which was mainly due to litigation by stakeholders.

It was important that ICASA was able to execute its mandate independently, without political interference, so that the decisions and processes it implements were impartial and beyond reproach. The fact that ICASA was reliant on the Department and government as a whole for funding, did not give it the competitive edge that it needed as a regulator. It needed to get to a point of being self-funded. there had been ongoing engagements and initiatives regarding the new funding model.

Film and Publication Board Annual Report 2020/21

Ms Zama Mkosi, Chairperson, FPB, said that the new FPB council would be formally inducted from tomorrow by the Deputy Minister. It gave them great pleasure to be in this forum.

Ms Abongile Mashele, Acting CEO, FPB, said the FPB was a content regulator within the South African market, charged with the responsibility of protecting children from exposure to adult content and premature exposure to harmful content. It provided consumer advice and through its legislation it monitored the film and gaming distribution space to ensure that child pornography was not distributed within the South African market.

· Strategic Objectives

Strategic Goal 1: Effective content regulation aligned to the Constitution (slide 22).

Strategic Goal 2: Public education and stakeholder partnering (slide 24).

Strategic Goal 3: Research and development (slide 26).

Strategic Goal 4: Efficient and high performing organisation (slide 28).

· Top 10 Strategic Risks 2021/22 (Slide 33)

Mr Mahomed Chowan, CFO, FPB, presented the budget for the 2021/22 financial year.

After the budget reduction of about R9 million that was advised to the entity in this financial year, in order to offset the reduction and become less dependent on the government grant, the entity was working on a revenue enhancement strategy and would try to offset this reduction through an increase in licence fees from the online content provider.

· Expenditure budget per programme (slides 41-43)

National Electronic Media Institute of SA Annual Report 2020/21

Ms Molebogeng Leshabane, Chairperson, NEMISA, said that NEMISA had really been fast-tracking the delivery of digital skills within the country. On an annual basis, the numbers and targets were continuously multiplying, because they understood the need and demand for the programme. It had worked towards going for a blended learning delivery model, where it combined classroom and online learning programmes in order to achieve the accelerated targets that were going to grow on an annual basis.

Mr Trevor Rammitlwa, CEO, NEMISA, said that NEMISA aimed to provide skills to people so that they could meaningfully participate in the economy and adapt to evolving technologies.

· Strategic Focus (slide 4)

Programme 1: Administration (slide 5-6)

Programme 2: Multi Stakeholder Collaboration (slide 7)

Programme 3: e-Astuteness Development (slide 8)

Programme 4: Knowledge for innovation (slide 9)

Programme 5: Aggregation Framework (slide 10)

· Budget allocation (slide 11)

NEMISA had come to realise that its reliance on the fiscus or allocations from the DCDT was not enough, since its targets were increasing and it needed to reach as many people as possible, in line with the targets and strategic plan. They would therefore relook their financial model, which would be presented to the board in the next quarter and thereafter to engage the DCDT to see if NEMISA could raise funds or revenue in other ways, through partnerships that could assist it to fund its programmes.

· Key risks (slide 12-13)

Overall, NEMISA had a risk register that was closely monitored on a monthly basis. They were currently in control and making sure that risks or emerging risks were mitigated.

SENTECH Annual Report 2020/21

Dr Sandile Malinga, Chairperson, Sentech, said that last year was a challenging year for Sentech, and this year was equally challenging, in a very dynamic environment where broadcasting and media were changing so rapidly. The board of Sentech had figured out what they needed to do -- in particular, how they could ensure that Sentech was sustainable going forward.

Mr Mlami Booi, CEO, Sentech, led the presentation. This covered:

· Seven strategic pillars that drive Sentech as a business (slide 5).

· Sentech’s annual targets in terms of its APP (slide 8).

· Quarterly targets (slide 9-10).

Sentech had an annual target of R1.2 billion for sales. This took into account the micro and macro-economic challenges in market. Sentech operated under tough market conditions constrained by the Covid-19 pandemic, but it had been resilient as it had a risk register that focused on business sustainability and continuity which was monitored by the board.

Sentech would specifically focus on promoting SMMEs in its procurement as part of its transformation, with a set target to pay all of its SMMEs on time.

Discussion

The Chairperson thanked the presenters from the Department and entities, in particular, NEMISA and Sentech, which had honoured the request at short notice to present in this meeting.

Mr T Gumbu (ANC) asked the FPB when they planned on filling their position of Chief Executive Officer (CEO), because this position was critical to the smooth running of the entity. He was aware that the FPB council was still new, but it was important that this be clarified.

Mr C Mackenzie (DA) referred to the DCDT, and asked about the Brazil-Russia-India-China-SA (BRICS) involvement with international bodies like the World Telecommunication Development Conference (WTDC)-21 and the World Radio Conference (WRC)-23. He asked about the process of these meetings. Were there BRICS pre-conference meetings that SA attends? Do they then take a unified position forward into these, like they did with regional structures in Africa? If yes, there appeared to be a lot of conflict at the moment within the BRICS nations, specifically with regard to China and India. For instance, the military conflict at the border, and India refusing to have any Huawei or Chinese equipment in its 5G networks – effectively excluding them from that. Clearly these were two very strong BRICS nations that were at odds with each other and competing in many areas. What was South Africa’s position in this, and what sort of role does it play there?

Where did the funding for the BRICS Institute for Future Networks go? Where was this institute located, and what content was it focusing on?

There was a brief mention about National Treasury regarding the voucher system. He said that perhaps it would be unfortunate an indictment of this committee, but much of the information that he had, he picks up from the media rather than the Committee, which was where it should be heard first.

Regarding the digital Integrated Digital Television (IDTV) sets that the Department was planning to distribute to households with indigent matriculants, as part of the Broadcasting Digital Migration (BDM) programme, it was believed that Treasury had put a stop to the purchase of those IDTVs, or the vouchers for them. He asked for more clarity on this.

On the development of shareholder compacts for schedule 2 and 3B entities, he asked that DCDT provide an idea of what those compacts were.

On the R611.2 million allocation for broadband, did SA Connect form part of that broadband allocation?

He had seen in the media that the Universal Service and Access Agency of South Africa (USAASA) was still appointing a CEO and a CFO. What was the timeline for the USAASA collapse, and the launching of the Digital Development Fund (DDF)?

Turning to ICASA, he said they had gone into the spectrum auction process with a light step and a light heart, because it was good to see progress in that area. The Minister had been congratulated on kick-starting this process after a decade. One of the things that the Committee was focused on at the time of engagement, prior to the spectrum auction process, was the need to avoid litigation, and now ICASA was finding itself in court litigating with Telkom, Vodacom, MTN and Rain. This litigation seemed to go on endlessly. Although it was a litigious environment, the intention going into this process was that they would go into it having consulted effectively in order to avoid this litigation. Mention had been made by Dr Modimoeng that he was still discussing with some of the stakeholders on how to get out of this. He asked Dr Modimoeng if he could guarantee that the temporary spectrum allocation, which was believed to be over effectively, would continue to be allocated while the litigation was ongoing, and that he would continue to generate revenue from that. It was clear that there were some very positive developments happening in the space of the temporary allocation of spectrum, so it would be very unfortunate if it were to be terminated. 

The theft of batteries from mobile towers was a real problem, because those batteries were terribly expensive and when someone stole them, the networks go down. He had read that someone had appeared in court for stealing those batteries. and had got a ridiculous sentence of several “25-year plus sentences”, which were to run consecutively. It was worse than a life-sentence that this man had got for stealing batteries, but what many people did not realise was that one was sabotaging telecommunications/state infrastructure when one did that. He asked if there was any education or awareness campaign that ICASA could do, to emphasise to people who thought that this was a soft target, that in fact it was more serious than shooting someone for his watch, and one would go to jail for a really long time. Would ICASA think of implementing some sort of awareness programme in the communities so that people would get the idea that if they touched those batteries, they would be in deep trouble? Maybe that awareness was not there.

He asked if ICASA had set aside any money for litigation, in terms of legal provisions, and if so, how much would that be?

ICASA had mentioned the need to avoid political interference, and its work had been exemplary in this regard. He congratulated ICASA for fiercely defending the independence of the regulatory space, which was essential for an effective telecommunications environment.

He welcomed the FPB board their “baptism of fire.” He asked Ms Mashele how long she had been the acting CEO. He had a difficulty with “acting” positions, because clearly if that person was acting as CEO, had the capability to do the job on a permanent basis. There was nothing lacking in the presentation this morning that indicated a lack of competence to do that. How long had they looking at appointing the CEO? He asked Ms Mashele if she had applied for that position.

On the FPB content warnings, he said that once one started to become aware of something, one started to notice it, and he always looked for the FPB logo and classification. He had watched a show on Netflix called "Spartacus," which was the most violent show he had ever seen in his life. It was incredibly violent, yet the little flashing logo in the top left-hand corner of the screen was not enough to warn a user that the content coming up on that show was extremely graphic and extremely violent. One had to actually watch the show to get a sense of its violence. Was there any way, if the picture or graphic was too explicit, that it could be greyed out or defocused, where one actually had to make a positive click to see the picture? This would be good to have, rather than having the content rolling regardless of the FPB logo, where the user had to click a button on the remote in order to allow such content to proceed. He asked if the FPB had the regulatory ability to enforce something like this, or whether they had an intention to do so, in the instance of an extreme classification for extreme violence.

Referring to Sentech, he asked what general increase in percentage they were looking at applying in their fees and charges for this year.

Mr Z Mbhele (DA) asked for a brief update from the DCDT on the progress with the Broadcasting Digital Migration (BDM) process so far, particularly in relation to the monthly benchmarked rollout target that was previously presented. For example, there had been mention that it would start off with the Northern Cape in April, moving on to the North West, Mpumalanga and the Eastern Cape, which was meant to start this month in May. He asked that the Committee get a sense of how on track the Department was with meeting those targets and the phased rollout in the provinces. Linking to this issue, he said he had received a query from a regional newspaper in the Western Cape last month about what the picture for the migration process in the Western Cape looked like. It was only at that point that he had realised that there had so far been explicit mention only of the rural provinces, such as the Free State, Northern Cape, North West and Limpopo. He did not recall in previous presentations about the BDM any clarity or detail on Gauteng, KwaZulu-Natal and the Western Cape. He had found an article after the Committee met in March regarding the BDM, that apparently KwaZulu-Natal was meant to commence in July, the Western Cape in November, and Gauteng by January next year. He asked for clarity and an update, specifically on the Western Cape's rollout and the switch-off for migration, as he had not yet been able to find an answer for the newspaper's query.

He thanked ICASA for the update on the spectrum auction litigation, as it had answered one of his questions. As he understood it, there was currently ongoing engagement with litigants, which he encouraged to be concluded as soon as possible, but also as effectively as possible, so that everything was ironed out and there were no further bumps in the road with the process. He echoed Mr Mackenzie’s point that with the anticipation and understanding, any kind of auctioning and licensing process was going to be a contested space, and there was going to be some sort of unhappiness from some party eventually because they were not going to get their way. It really was important for those initial steps and the pre-planning to mitigate those foreseeable risks.

Regarding ICASA’s resource constraints, he had done some quick research during the presentation and found an article dated 18 May 2020, where the Chairperson had made the exact same points regarding ICASA’s budget and its resource constraints, so it had clearly not made any major strides going forward.  He asked Dr Modimoeng if the leadership/management at ICASA thought that the sustainable and systemic solution to the funding challenges facing ICASA would fundamentally lie in more self-funding, as proposed, through perhaps increased licensing revenue, or was it on the other side of the equation -- in the aggregate cost savings that could be yielded by the envisaged merger process? Basically, this was the age-old question facing an individual or a household that find may themselves under financial strain or “living in the red.” Did they find ways to increase income to cover the shortfall, or did they just need to structurally tighten their belts and save costs? It was understood that this was a primary motivation for the proposed merger process for all the regulators in the telecoms space.

He said the FPB's human resource (HR) management had been unpacked in quite useful detail, and referred to an HR aspect that linked to what Mr Mackenzie had raised. Given that the FPB had staff who were involved in the classification and review of film and television content, what proactive and responsive measures were in place for their mental health and wellness, in response to the intensive and sustained exposure to provocative, violent or controversial content? He was personally a fan of the horror genre, but he enjoyed only the zombie, paranormal or supernatural horror; and could not abide the violence, gore or slasher movies. If it were his job to watch a succession of those movies over a period of time, he would not be a happy camper. This included exposure to content that bordered towards very sexual controversial themes -- not child pornography, as that would be banned outright -- but films that played in those grey areas. It was important that one cared for the people who were performing that service for the public.

Ms P Faku (ANC) asked the DCDT about the implications of not getting adequate funding for SA Connect. She then asked ICASA about their target for reducing the cost of data. She emphasised the question from Mr Mackenzie concerning ICASA's litigation cases and the temporary spectrum allocation. 

After listening to all of the presentations, it was clear that the issue of inadequate funding ran across the Department and all of the entities. She asked ICASA if some of their councillors' terms were coming to an end.

She asked how the FPB was planning to increase its revenue collection, while also recognising that they were waiting for the President's proclamation on the FPB Amendment Act. How was the planning going to strengthen compliance by the industry, as most content was consumed online? She questioned the FPB’s efforts in addressing cyberbullying.

She raised the issue of vacant positions, because it created the impression that they did not have people who were fully committed to those positions.

Considering that NEMISA did not have a national presence, how would they ensure that their training programme would reach people in rural areas? She asked NEMISA how much people had to pay for these training courses, and whether they were recognised by the South African Qualifications Authority (SAQA).

To both ICASA and Sentech, she referred to the paper on Digital Audio Broadcasting, and the proposed licensing thereof. She asked the entities how their plans would impact on the current radio broadcast licence holder, such as the South African Broadcasting Corporation (SABC), which had a public service mandate. Were they expected to migrate, or could they coexist?

Ms N Kubheka (ANC) referred to the proposal of other emerging entities, and asked if it was still possible and if this was still ongoing, especially taking into consideration the issue of independence, as raised by ICASA.

She asked whether the Department and its entities were ready for the potential third wave of Covid-19, or if a third wave may potentially disturb its delivery.  

Regarding the DCDT and its BDM rollout, she recognised that there might be a shortage in the budget. She asked if the DCDT was ready to proceed with the BDM rollout with its current budget, while it was also engaging with National Treasury for assistance with its budget.

On the digital migration process, she asked if the Department would possibly complete the switch-over from analogue to digital TV broadcasting by March next year.

She welcomed the new chairperson of the FPB council, and asked that she please speed up the process for the ‘acting’ posts. She was pleased to hear that, even though the Department had regressed a little, it was still committed to maintaining a clean audit report. She was also pleased that the Department was committed to eliminating the fruitless and irregular expenditure. She again stressed the urgency and the need to fill the critical vacant posts.

She appreciated the feedback from ICASA on its spectrum auction process, especially since some of the litigation challenges were beyond their control. She was pleased to hear that there were ongoing engagements to resolve that matter.

She also appreciated the role of Sentech in assisting the Department with the BDM, especially concerning the Set-Top Boxes (STBs), as well as its focus on promoting SMMEs in its procurement. Sentech’s role would also speed up the process of switching over from analogue to digital.

As the Department and its entities dealt with their economic recovery plans, they were also expected to play a job creation role in the country. She recognised the NEMISA programme, which tried to create media courses with interns, and asked what it planned to do with those interns after the training. She asked if there were any plans in place after the interns had completed that training.

She urged the DCDT and its entities, after their presentations on the APPs, that those APPs were aligned with the State of the Nation Address (SONA) and the National Development Plan (NDP), so that in the next term, the Committee heard of improvements in delivery and performance in meeting those targets.

The Chairperson said that in consideration of time, when the Department and entities respond, they should respond to the questions comprehensively.

He referred to the question on the BDM process and its rollout in the provinces, and asked the DCDT to provide clarity on what work was being done to ensure that the unsubsidised households were taken care of, and how this would impact the programme. The presentation had focused more on those who would be subsidised in the form of vouchers or STBs.

He also asked for clarity regarding the funding for the IDTVs, as these were an intervention during the budget cuts which would have come from interest and/or surpluses that Treasury would have agreed to release.

He referred to all those who were involved in the BDM programme, and asked that they alleviate the fears of the Committee and South Africans that when they set up a switch-off date for migrating from analogue to digital, that they were clear about meeting those deadlines, because there had been a number of changes. There needed to be confidence that the Department could meet those deadlines. There had been a number of articles and publications, not just in South Africa, but internationally, that talked about the scarcity of ICT equipment, and that there might be an improvement by mid-2022. Understanding that their timelines extended to the end of March 2022, the articles suggested that this was the worst that South Africa had had in eight years. It was therefore important to ensure that this risk was being considered, and mitigation measures were in place to ensure that they did meet that timeline, irrespective of any challenges.

On the DCDT's ICT, a matter had been raised on its reliance on the supply chain. This Committee would have advised that they should consider using the State Information Technology Agency (SITA), especially since it was in the process of repurposing itself. They could leverage from this platform to address the ICT matter. Based on the presentations from the entities, it was clear that there were plans to invest in the infrastructure of government. The Committee just wanted to ensure that there was coherence in the way the entities of the state were working so that there were efficiencies and duplication was minimised.

He referred to NEMISA's training programme, and asked how the entity looked for people they would target to equip with digital skills, so that they were ready for future work, while filling the technology gap. He asked if there were any engagements about this training programme with other departments such as the Department of Higher Education and Training, to create an impact at that level and an opportunity for those who had matriculated but may have not had the same chance of being exposed to these skills.

He referred to the SABCs “must carry" regulations, and asked about the regulator from a policy point of view. Would the regulations not be undermined by other actions, especially in an environment where there might be ligation from all sides? He asked that the entity respond to the Committee if there were any of such litigation matters that were before the courts. There was no intention of compromising the standing of the regulator on this matter.

Referring to the proposal on revising the ICASA funding mode, he asked if this had been presented to the Department and National Treasury, and if this engagement had found expression in the regulatory bill that was being looked at. His worry was that if this funding issue was not addressed, there could be a collapse of the regulator. History would then judge that the Committee had been well aware of this over a period of time.

He suggested that although the presentations had started with the Department, it would be good to have the entities respond first. In doing so, it would allow the Department to have the opportunity to do entity oversight. They could use the entities' responses as an opportunity to also intervene in gaps that may have been left out by the entities in their responses to the questions.

 Response from ICASA

Dr Modimoeng referred to the spectrum licensing and ongoing investigations, as it was a common theme raised by different Members. Indeed, had all things been equal, ICASA would have opted for a scenario where they would not be in court due to the terming of the licensing of high demand spectrum, but this was the reality. It was always a difficult situation of balancing public interest (i.e. ICASA's co-mandate) with the commercial interests that drove the interests and motives of stakeholders in the sector.

ICASA had consulted effectively, and had received the policy directive from the Minister in 2019. It had elected to go on a consultative process on the information memorandum, which was not a requirement, but it had been done as part of enhancing consultation, knowing the highly litigious space they were in. In addition, invitations-to-apply (ITAs) had been issued, where there was correspondence between themselves and various interested role-players, and they were certain that they had done their best in this regard.

On the temporary spectrum allocation, he replied that in the past month the authority had consulted again on a more general basis, to look into the disaster management regulations. ICASA was now in the process of reviewing those regulations, and had gone on a public consultative process, for which the closing date was 7 May. After consulting, they were now busy with the analysis. It was not only about the temporary spectrum, but also included the relaxations on the local content in the broadcasting space, issues of type-approval, spectrum pooling, and the regime around consumer protection and so forth. After analysis and before the end of this month, ICASA would announce the future of the temporary spectrum.

In response to Mr Mackenzie and Mr Mbhele, he said the temporary spectrum relief was very much necessary and very much needed. However, one needed to take note of the recent court judgment instituted by Telkom and eTV against the regulator. In that judgment, even though ICASA was appealing it, it was not yet finalised, and it therefore meant that the judgment was enforced. It was made clear by the judge that there were somewhere between 700 and 800 ways that the regulator may be infringing the rights of eTV – so the industry could not have its cake and eat it too. The objective reality of the matter was that if there was a binding judgment on ICASA making a final determination about the future of the temporary assigned spectrum, they needed to take this into effect. There was something very curious going on, where parties on the one side were going to court and saying that the spectrum was unusable and caused interference etc, while on the other side, those same parties then applied for the temporary usage of the very same spectrum which they told the courts was unavailable. They needed to fiercely guard against this.

With all due respect, industry players could not have spectrum through the backdoor -- this would not be allowed. The authority had not yet made the decision, but a point needed to be made that the industry players had to focus on resolving this current litigation so that they could move into an era of permanently assigned spectrum. The fair value of spectrum would be determined through a competitive process. He said that this matter of giving spectrum temporarily and only collecting a licence fee was an interim measure that was occasioned by a very clearly defined reality in our country and across the world at that time.

There might be talk of a third wave, but as matters stand, the bulk of schooling was happening in a physical manner. Increasingly, people were going back to their offices and work, as they were in lockdown level 1. It was in no way suggested that a final decision be made, but it was important to project the picture to the public that industry players should not plan their business models around this temporary assignment. The assignment of temporary spectrum was just something unprecedented, occasioned by an unprecedented disaster in the world.

Sooner rather than later, one might be in a position where it becomes increasingly difficult to account to South Africans on why this very critical resource of theirs was continuously given to industry on a temporary basis, and the real value was not derived. It needed to be put in context that this temporary assignment was very temporary. He urged that the industry players needed to be encouraged to go to the negotiating table, as the room for negotiations had been opened. He added that some were cooperative, while it was uncertain where others stood. Hopefully, they would know in the next week or two, once all the inputs had been collated. On this matter, they would not budge, and they would not encourage a sense of permanency on a temporary arrangement.

In any event there had been licensed spectrum through different regimes since 1994, and one still expected them to rollout services on the basis of this background. A final determination would be made on this temporary spectrum and on the disaster management regulations by no later than the end of May.

Referring to the vandalism of base stations and cellphone towers, he said this was nothing short of a treasonous act. The reason why judgments were so severe was because when one vandalised a network station and stole batteries, people might even lose their lives. In these days, there was telemedicine and a high reliance on networks and communication services. Sometimes, the inability of people to make emergency calls could even claim lives.

He welcomed the suggestion by Mr Mackenzie on the awareness campaigns, and said it would be implemented. ICASA had been conducting a number of interviews on various radio stations, especially on the SABC local language stations. It would continue to do so and would have a very clearly defined campaign to integrate the issue of vandalism in the messaging framework.

He thanked the Committee for the comments defending the independence of ICASA's regulatory space, as they were just trying to live up to Section 3(4) of their legislative framework -- nothing more, nothing less. However, this was accepted in a positive way.

Referring to ICASA’s budget, he said they had been helped by National Treasury and the DCDT. There was funding given to ICASA as part of the overall licensing process, and it had ring-fenced funds for help with the consultancy, because licensing spectrum was a consultancy-intense process, which also involved the legal fees. ICASA had its owns funds, not necessarily to litigate, but when taken to court they had to be able to defend the public interest and their decisions. The bulk of the budget was really intended to take ICASA through achieving the actual licensing process. ICASA seemed to be fairly comfortable regarding budgets where litigation and licensing processes were concerned.

Responding to Ms Khubheka, he said that the "must carry" regulations process was under way, with good progress. The findings document had been released in Q4, so in this current financial year there would be a draft regulation. Once the draft regulations were finalised, they would quickly consult on those, because consultation was something that always helped to prevent litigation. The final regulations on "must carry" were scheduled to be concluded in this financial year.

Responding to the Chairperson, he said that their regulations were the functions of consultations. They were guided by the existing legislation in the process of formulating regulations, and as they consult, guided by inputs from the policy maker and Ministry from time to time, they try to strike a balance in ensuring that regulations were not misaligned to the policy aspirations which were currently under way. This was why they tried to encourage public participation in these processes, to make sure that no one’s views had been left out. The target they had set for themselves was at the end of this financial year.

Responding to Ms Faku on when councillor’s terms were coming to an end, he said that indeed there was already one vacancy. It had been publicly announced that a colleague in the council had left and was now occupying the position as CFO of the Passenger Rail Authority of South Africa (PRASA). In the course of the year , there would be other vacancies. The process of assisting with the finalising of recruitments was in the hands of the Ministry and Parliament.

Mr Ngwepe referred to Mr Mbhele’s question about a solution to the funding problem. He said that perhaps it could be a combination of both, at a very pragmatic level, where one could combine two, three or four regulators, or one could match two, three or four regulators into one. There was no denying that there would be a lot of cost efficiencies that would be derived. For instance, there would be one board, one management team, and one accommodation for the organisation in and across all the provinces. There was no denying that the aggregation would come with a lot of cost savings. However, the flipside was that if one aggregates, the aggregated regulator would then have an expanded mandate, and therefore it would still be confronted with the need to be properly funded to execute its mandate.

ICASA was still facing the challenge of outdated equipment, and the fact that it did not necessarily have the latest technologies that were needed to monitor qualities of service, to manage the number of resources, or to execute the licensing processes for different categories of administrative assignments. In this respect, if one were to add the other regulators who would probably have their own challenges in executing their mandate, it would then result in one regulator with an expanded scope of mandate, which then needed to be fully capacitated. The challenge could be managed by combining regulators, but it would not resolve it, because the combined regulator would have only so much effect in respect of cost efficiencies, and the expanded mandate would still need to be fully funded.

On the question of the funding model, he said that the proposals that were made to National Treasury and the DCDT were really premised on section 15 of the ICASA Act, which had two provisions in respect of ICASA funding. Firstly, it says that ICASA must be financed from money appropriated from Parliament, which was how ICASA gets its annual allocation. It then says that ICASA may also receive additional money, determined in any manner that may be agreed upon between the Minister of Communications and Digital Technologies and the Minister of Finance, and approved by Cabinet. It then allows a discretion by the Minister, in consultation with the Minister of Finance, subject to the approval of Cabinet, in addition to what had been appropriated by Parliament, to allow for other methods by which ICASA could be funded. The proposal made, premised on this provision, was that ICASA should be allowed to retain a percentage of the licence fees that it collects, so that it could then close the shortfall that was currently experienced in its funding. ICASA was also mindful that this proposal comes at a time when the Department was considering the rationalisation of the entities and institutions, so it may therefore need to be looked at in that broader picture.

Another important point to add, was that both the Department and National Treasury had in the meantime responded positively to all the requests that had been made for funding the critical projects that needed to be executed, specifically the funding in respect of the licensing of high demand spectrum and the wireless open access network (WOAN), in addition to the execution of the mobile broadband enquiry.

Responding to Ms Faku’s question on digital sound broadcasting, he said the digital sound broadcasting service was a complementary service to the traditional FM services. It was expected that the services would coexist, at least for the duration of the period until the digital switch-off was announced. The licensing process would be subject to a detailed public process, and it may even be introduced through a phased approach, where the incumbents were given an opportunity to have a phase during which they could seem outcast between the digital sound services and the broadcasting services. There was no expectation of a complete shutdown of traditional services as a result of the digital sound broadcasting services being available.

He knew that there was a specific target for reducing the cost of data that had been set in the Minister's performance agreement. The ICASA plan included regulatory processes that were aimed at ensuring that it created an environment for effective competition in the market. In hope of competition enhancement, prices would then be driven down. One critical project in this respect would be the completion of the mobile broadband enquiry. As highlighted, the draft regulations were currently subject to consultation. Final regulations in respect of the mobile broadband services market were expected to be completed within this financial yeart. Those regulations would then hopefully result in a further reduction in the cost of data, in line with the Minister's contracted target as to what was expected to be seen at a national level.

Dr Modimoeng, said that the deadline for input on the draft was 21 May. The process was under way, and public participation was encouraged.

Response from FPB

Ms Mkosi responded on the appointment of a permanent CEO. Although they had not yet had a formal induction, it had been made very clear that this was a top priority. In their first briefing, the Minister had made it quite clear that this was the first thing that needed to be prioritised. It was top of the agenda from the Department and they appreciate why that was so, based on what the Committee had articulated and also based on some of the realities within the organisation. There had been quite a few issues raised in terms of the HR issues involving the change management within the staff, and staff morale issues. When change was happening, it was important to create stability from the top. It appeared that this was the position of the Department -- to create stability at the council level, as well as stability at the CEO level. Ultimately, they had to make sure that the whole organisation was stabilised by filling the vacancies. There were still a few vacancies that were undesirable because they were critical positions, but so far management had impressively addressed this by seeking partnerships, with SITA, for instance. However, this was not a permanent solution, and therefore the council would work with management and the Department to address some of the challenges that had been identified in being able to attract and retain appropriate people to fill those positions. There may well be reasons that were outside of the control of the organisation, but maybe they were related to the strategic shift that was happening within and around the entities of the Department. The council would work very closely with the Department to be clear on what those limitations may be, and how this may impact on the council’s ability to appoint permanent staff.

She committed that when the council returned to this platform, they would not have an ‘acting’ prefix next to the CEO, and that they would have followed the proper process of recruitment for the permanent CEO position.

Ms Mashele, referring to Mr Mackenzie's question, said that unfortunately their mandate did not extend to stating that distributors were required to blur images. Legislatively this was not provided for. If the FPB started venturing into this realm of content regulation, it would be bordering on the censorship tag that was always thrown at the FPB. How it strived to regulate the sector was by ensuring that the age ratings were suitable for the content that one was about to watch. Regarding the particular Netflix series that was referred to -- Spartacus -- it was rated at age 18. The FPB hoped that before a consumer watched it, that they understood the level of gore.. The fortunate part of most of these online platforms was that they actually tailored what they gave to the consumer, based on their requirements. This was why the FPB would place a lot more emphasis on consumer education and consumer awareness, so that when consumers did click on that link and watched that particular rating, the consumer was educated on what that content contained. The FPB did not require distributors to blur or edit content, but in the British Board of Film Classification (BBFC), they would actually require distributors to cut out and edit certain scenes - the FPB certainly did not do that.

Responding to Mr Mbhele’s question on staff wellness, she said the FPB certainly had a number of policy provisions and institutional arrangements to ensure that staff wellbeing was taken care of, especially with the independent contractors who were the classifiers, and were basically in charge of reviewing material. As a standard procedure at the FPB, all classifiers were required to be debriefed on a quarterly basis. There was a health and wellness service programme within the organisation, and in the instance that a classifier may have felt they had watched something that was disturbing to them, the services would immediately be made available to that classifier. There was also a policy regime within the organisation, where classifiers who were independent contractors were appointed for a specific period of time, so one could not be a classifier for more than six years with the FPB. The former council had taken a policy decision that made it a requirement for the classifier to take a break for at least three years, so that they were not continuously exposed to graphic material, because one could become desensitised and it could have psychological impacts on an individual. There were also staff members within the FPB who were qualified social workers, who were responsible for viewing the graphic type of content, such as child sexual abuse material. The ones who actually provided expert evidence when there were child pornography cases in South Africa, were part of committees with compulsory debriefing on a quarterly basis. This also ensured that the FPB complied with the international standards and norms of the working environment that they were operating in, as the FPB was a member of INHOPE.

She said revenue enhancement was definitely a major preoccupation for the FPB. The major dependency was the operationalisation of the Film and Publication Amendment Act 11 of 2019, because with this operationalisation, the FPB would be able to collect more regulation fees, especially from the online streaming market, where there had been an increase in players coming into the South African market. The FPB had passed a new tariff model for the online market, yet the struggle was compliance and adherence. Once the provisions of the Amendment Act came into effect, it would be easier to ensure compliance and adherence, and implement hefty penalties through the enforcement committee. The Amendment Act allowed the FPB to levy penalties and keep them for reinvestment into the business of the FPB.

Cyber-bullying was definitely an issue that the FPB was constantly focusing on. The FPB was always on a drive to educate learners in schools about the dangers of cyber-bullying and the impact that bullying of any kind could have on a child and, in the instance of this becoming viral on social media, understanding the psychological impact that it could have. This was definitely on the FPB radar. She said that every day, their teams were in schools and in communities to educate young people about cyber-bullying.

On Ms Kubheka’s question about the third wave, she replied that the FPB had been able to operate throughout the various levels of lockdown. It had an impact on the FPB when they needed to rely on third parties -- for example, when National Treasury closed the tender bulletin and when distributors closed and were not submitting material that impacted on the revenue streams. However, the FPB had been able to service the public. There was no doubt that the FPB would be able to service the public again, despite a third wave.

Fruitless and wasteful expenditure was something that the FPB monitored on a regular basis. In the last financial year, pending the finalisation of the audit, there had not been any new declaration of any fruitless or wasteful expenditure.

They had tried hard to fill the vacant positions, but it was especially challenging to fill the vacancies in ICT. It had been found that the FPB's pay scales were unfortunately quite low compared to what the market was offering, especially for ICT skills. The organisation was trying to resolve this by looking at the pay scales to attract and retain specialised skills, such as ICT.

Regarding the entity's ICT capacity, she said it was definitely using a number of SITA's services. For instance, the services were hosted in a SITA cloud environment, there was a Chief Information Officer who had been seconded from SITA, and other services that were procured from SITA. However, the FPB was also looking to utilise a specialist database of service providers for the ICT environment, because some of the systems that the FPB had were largely in the media and entertainment sphere, which was not a specialist area of SITA.

Response from NEMISA

Mr Rammitlwa responded to Ms Faku, and said that NEMISA had seven CoLabs which were in various provinces and at various universities. An eighth CoLab had been added, as it had recently been approved, which was at the Central University of Technology in the Free State. The CoLabs had vast networks of non-governmental organisations (NGOs), traditional authorities, municipalities and technical and vocational education and training (TVET) colleges that they work with in those provinces, to reach to faraway places. Over and above this, NEMISA partners with government departments and municipalities directly, and were on their way to reach out to traditional authorities as well, as it was realised that this was quite important in terms of reaching people in rural areas.

On the question of how much people paid for the courses, he said NEMISA had been operating with the approach that the courses were funded through its allocated budget. Since the target was for people from underprivileged or disadvantaged backgrounds, they were not required to pay. NEMISA funded the courses and the CoLabs, so that it was able to deliver those courses to the communities.

On whether the courses were accredited by SAQA, he said the courses had two offerings-- the creative media side and the digital skills side. The creative media side’s qualifications were registered through SAQA, but for the digital skills courses, the ten qualifications had just been developed and were still in the process of being approved. NEMISA would be working to ensure that it was proactive so that when the qualifications were approved, the courses were already aligned and that people could gain credit for the courses that they attend.

In terms of mitigations for the third wave, NEMISA was very much aware of this possibility as it had been impacted very much by this pandemic. They had learnt their lesson, in that they needed to rollout online learning as fast as possible, while at the same time delivering face-to-face training while adhering strictly to protocols. NEMISA had also started delivering virtual training sessions, where people could attend a live class.

As for contributing to the recovery plan, NEMISA was looking at its funding model while also looking at its preceding operating model, which had dealt with plans concerning how they would attract learners into the programmes and deliver training until there was a good throughput. As part of that model, what was in the pipeline was to link their learners to possible workplaces, entrepreneurial opportunities or further studies. NEMISA would put together a database of all its alumni and put together interventions that included internships, work experience and work readiness programmes. Where possible, this database would include employers who could be in contact with this database to identify learners that they could attract into their businesses. NEMISA would be working with entities such as the Small Enterprise Development Agency (SEDA) and National Youth Development Agency (NYDA) that support small and medium enterprises (SMEs), to create a pipeline where they could be supported by these entities if they would like to follow an entrepreneurial route in their careers. Those who would like to further their studies would also be linked to other pathways that would support them in that way. It was NEMISA's intention to ensure that its interventions were contributing to the economy and would enable people to access economic opportunities; in this way contributing to the economic recovery plan of the country.

He said that for those who were in internships, there had been recent discussions with SABC who had indicated their interest in giving young people an opportunity. These discussions were still in progress, and it was anticipated that some might be able to find jobs or be given opportunities to work on a freelance basis with the institution.

He referred to the comment on equipping citizens with digital skills, and said that NEMISA tried to equip citizens, especially at the basic education level, to catch them while they were still young. The process that they were following currently worked with the Department of Basic Education (DBE) in targeted provincial departments. At this point, they were in the process of entering into a memorandum of understanding (MoU) with the Limpopo Department of Education, which they had worked with in the previous financial year, and had been able to train their subject advisors across the Limpopo region. In this new financial year, NEMISA would be given the opportunity to work with the teachers and learners. NEMISA was also in the process of getting into partnership with the Free State Department of Education, eventually getting to the DBE and Early Childhood Development (ECD) phase to train those teachers, so that they were able to teach and expose the little ones to digital technology. NEMISA also intended to target post-matric learners, and there were discussions underway with the DHET and TVET colleges.

Ms Lashabane referred to NEMISA's contribution to the economic recovery of the country. She said they were also looking for ways to get their learners to be absorbed within the different areas of the government departments. However, realising that the state fiscus was already under pressure with the wage bill, NEMISA was trying to form a more massified internship programme to ensure that when their learners acquired skills they did not go back home and wait for jobs, but the organisation became a facility for them to access opportunities. The other area that was being looked at was the Smart City vision of the President, where NEMISA sought to align its programmes around providing skills that would feed into the Smart City agenda. This was to ensure that when South Africans talk about Smart Cities, they would not be looking at the rest of the world for skills and expertise, but that they would become the creators of their own technologies and adapting them to the emerging technologies that were being developed on an ongoing basis. There were other plans that NEMISA was still conceptualising, but these would be shared at the next meeting. They involved the big thinking and strategies around getting people to participate in the 4IR.

Response from Sentech

Mr Booi referred to Mr Mackenzie’s question about the rate of charge increase, and replied that this was planned annually around the consumer price index (CPI), which was about 3%, even though there were difficulties in the current environment, where some customers could not even afford the CPI.

In response to Ms Faku’s question on Digital Audio Broadcasting, he replied that Over-the-Top (OTT) services would affect public broadcasting, but the good thing was that the public broadcaster, the SABC, was actually playing a role in the OTT, which was their way of mitigating the risk of losing viewers to OTTs. Sentech would always be available to assist the SABC in that technological platform deployment, and these conversations and services had been offered to them.

He said that there would certainly be an impact from the potential third wave, but hopefully that significant wave would not come. The project that would be impacted was the set-top-box installation, because with the restriction of movement, the installers would not be able to move freely and do installations. This was being managed and monitored quite closely.

The risk of availability of set-top-boxes, or the availability of integrated circuits because of the shortage globally, would affect the manufacturing of set-top-boxes in the country, but manufacturers had shown the Department that they had somehow mitigated this risk.

Response from DCDT

Ms Jordan-Dyani referred to the filling of vacancies, and said that the Department had given the FPB the go-ahead to fill them.

In response to Mr Mackenzie’s questions on BRICS, she replied that in all of the international engagements, the focus was always on the national interest and what was in the best interest of the country; especially in the space of technological development, where the country always sought strategic alliances. In a alliance like BRICS, there were areas of common interest. The BRICS Institute for Future Networks focused on providing joint research on innovation. They could not avoid the fact that China and India were advanced when it came to research and development, and equally that there were certain skills in Russia and Brazil. South Africa collaborated with all of them on the platform for research and development.

Looking at the monopoly within the standardisation sector, there had been a particular monopoly in the past of South Africa sourcing particularly from the northern hemisphere. South Africa would like to ensure that it built its own capability. This was related to the ongoing geo-political conflict regarding 5G.

While South Africa worked and collaborates with the Institute for Future Networks, this did not mean it would not work and collaborate with any of the other strategic alliances across the globe. In terms of its funding and current location, the Institute was provisionally a donor cell at the Council for Scientific and Industrial Research (CSIR), as it was also recognised as a global centre, with accredited international standards. However, this was temporary, as the operational plan highlighted the intent to build the digital transformation centre. Once those were operational, the BRICS Institute would then be formally located.

On the issue of the IDTVs, she said that USAASA had written to request the use of interest that they had from the Universal Service and Access Fund (USAF) for the IDTVs. Unfortunately, due to delays, those funds had not been spent. They had then written back to National Treasury at the beginning of this financial year to request a rollover of those funds for the IDTVs. National Treasury had responded that they should rather utilise those funds for the shortfall on their set-top-boxes. The funds were around R243 million, but there was still a shortfall for the analogue switch-off and for the provision of vouchers for the households to purchase the set-top-boxes. This shortfall was just below R600 million, which excluded the operationalisation of the voucher system itself, which was estimated at around R25 million.

In response to Mr Mbhele’s question regarding the progress of the BDM, she said they had finalised Bethlehem, which was the last site in the Free State, outside of the major cities. They had already commenced in the Northern Cape, where there had been over 600 000 installations, but that certainly was a drop in the ocean considering the number of households that the Department needed to migrate. There had been some delays due to challenges. The installers had been disgruntled at one stage because of issues over their payment, which they said was below the commercial rate. Fortunately, the Department had engaged with USAASA and increased the installation fees. After this, there had also been some service delivery protests in the Free State, just before the Freedom Day celebrations. Unfortunately, this had resulted in the destruction of equipment, as well as installers being blocked from entering particular municipalities. The Department had tried to engage with the local authorities to report that particular matter, and it had been resolved.

Regarding the depletion of stock in the current provinces, she said the Department did not have the capacity of installers, but they hoped that the voucher system would allow a catch-up, because once the voucher was registered, then it would be a direct home purchase.

Regarding the rollout in the Western Cape, she said the Western Cape, along with four other provinces, was part of phase two. Hopefully this would start in September, in terms of purchasing the vouchers and ensuring a sufficient number of installers. When looking at the number of installers in the Western Cape and Gauteng, they were not too worried, but were rather worried about the more rural provinces.

She said that the allocation for broadband was R611. 2 million over the medium term strategic framework (MTSF) period, but it was only R194.5 million for 2021/22, which was certainly not sufficient. SA Connect did form part of this allocation.

In response to Mr Mackenzie’s question on the timeline for USAASA's collapse, she said it was rather referred to as the “dissolution” of USAASA, and they hoped that if everything went well -- as it was externally dependent on Cabinet and Parliament -- it would be dissolved by the end of March 2023. For this reason, they had given the go-ahead for USAASA to make appointments until such time. It was rather a prolonged period, but they still needed such leadership considering the strategic role that USAASA was currently playing in programmes supporting the migration and broadband rollout.

She replied to Ms Faku that the implications for the DCDT not having adequate funding was dire. This was not just an APP or MTSF, but there was a critical need to ensure that the country was fully connected in order to provide e-government services, especially during this period of Covid-19. Also, if the country experienced a third wave, the Department needed to ensure that this did not adversely impact learners and the connectivity of the health care services. The issue of not having adequate funding, especially for SA Connect, resulted in this dire implication. The Department was trying its best to find alternative funding, including going out into the market and looking for international investors. She appealed that if the Committee knew of any persons who would be interested in partnering with the entities, they should please bring such information forward.

Regarding the vacancies, the Minister had written to Parliament in March following the resignation of the former ICASA councillor, and had also indicated another three vacancies would be coming up by January 2024. By that date, there would be four vacancies on the ICASA council that Parliament would have to facilitate.

Responding to Ms Khubheka’s question on the merger of the entities, especially relating to the regulators, she replied that they were still busy with the business case, as this would inform the Department on the best and most viable options to pursue. ICASA was a constitutional mandate, and therefore they would have to explore how this could be done, or whether it was going to be a viable option. When it was completed, the business case would provide more information on the options and the timeframe.

She said there had certainly been impacts from Covid-19 and lessons learnt. From the lessons learnt, the Department had established a Covid-19 Project Management Office (PMO), working with the entities and the sector. One of the points raised with the NCCC was that this sector should also be considered as part of the essential services. There could be dire implications with the switch-off of analogue if they were to face another lockdown, so this needed to be carefully managed.

On the BDM installations, she said that certain households or people were hesitant to have strange people enter their house, which had caused a bit of disruption. The Department had worked well with municipalities to try and manage this and to continuously communicate with the citizens.

There were a number of risks related to the migration, such as the expectation of the third wave of Covid-19; non-cooperation with stakeholders, which required continuous engagement; and inadequate funding challenges. The Department hoped to use some of the funds from the auction towards the shortfall, but if there was a delay in the litigation, other funding options would need to be explored, to safeguard the shortfall. Other challenges included the implementation of SA Connect, considering the budget constraints. There was a household connectivity plan which was a pilot, and had been presented as a model for this year.

On the concern for unsubsidised houses, and the efforts to ensure that they were not left behind, she said that this was being dealt with mainly through an awareness and communications campaign. The SABC and eTV were running a banner on their screens during their programmes and throughout the day, just to alert citizens. The Department had also partnered with the mobile services, to send messages to citizens. There would also be use of online platforms, community radio stations and community and public campaigns to promote the issue, and encouraging people to go out and purchase the IDTVs or set-top-boxes.

From a technical capability perspective, the biggest challenge was that the Department did not want to cut off households, which was why they were trying to ensure that the connectivity and installation of set-top-boxes was in the households. They were a caring government and would like to make sure that no household was left out and could receive broadcasting services, which was a critical service platform.

Another risk to the BDM was the non-availability of chip sets, but with the Department's engagement with some of the stakeholders, they had confirmed that there was a small capacity within the country and hopefully towards the end of the migration, the issues would have been resolved. On the reliance of the supply chain for ICT equipment, it was clear that South Africa had to build its own capability as a country, and manufacture these devices and the entire value chain locally.

Mr Rendani Musetha, Chief Director: BroadBand Infraco (BBI), DCDT, referred to the question on the development of a shareholder compact. He replied that it was about the compact between the Department and all the entities that were designated as schedule 2 and 3B. They were meant to be the strategic intent in terms of what was expected from a government point of view, ensuring that the entity in its strategic planning considered the strategic issues that the Ministry would have indicated. In terms of the Treasury regulation, those that were prescribed to be using the compacts were the schedule 2 and 3B entities. The conclusion of those documents was intended to be part of the APP as a target.

The Chairperson thanked the Department and entities for the comprehensive responses. These discussions would continue as the Committee monitored the implementation of the plans that had been presented. The Department and entities should consider the concerns that had been raised, and make plans to mitigate them.

The meeting was adjourned.