Broadcasting Digital Migration; SA Connect; 4IR; consequence management, with Deputy Minister

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Communications and Digital Technologies

01 March 2022
Chairperson: Mr B Maneli (ANC)
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Meeting Summary

Tabled Committee Report

The Department of Communications and Digital Technologies (DCDT) gave a virtual briefing on the timelines for implementation of the Broadcasting Digital Migration (BDM) policy; SA Connect; 4IR Strategic Plan and consequence management by the Department. The Department said it had revised the BDM policy to now focus on taking a national approach as opposed to the province-by-province approach. This newly revised approach was adopted by Cabinet and the analogue transmission will officially switch off on 31 March 2022. Overall, the Department was pleased with the progress made to date on this revised policy.

SA Connect was adopted by Cabinet in December 2013 as the broadband policy. The total capex budget for the revised Phase 2 was R2.53 billion to provide broadband infrastructure to underserved areas and government sites within the next 36 months. The telecommunications industry will connect the social obligations assignments over the three-year period.

On 4IR, DCDT ensured that the recommendations of the October 2020 report of the Presidential Commission on the Fourth Industrial Revolution (PC4IR) chaired by the President were aligned with the priorities of the Department. It assured the Committee that as work and implementation develops under this programme, the Committee would be kept updated.

DCDT laid out its consequence management policy, especially the process followed for financial misconduct.

Members asked if after analogue switch-off, TV services would be accessible to the public; if there were challenges with the set-top boxes that had been installed; if the Department conducted extensive consultation with stakeholders on the new policies, especially labour; about non-payment of SMMEs; how the pricing model of SMMEs was going to be addressed in the new policy and infrastructure ownership; and how DCDT intended to deal with the USAASA challenges.

The Committee adopted its Committee Report on the SITA 2020/21 Annual Report.

Meeting report

The Chairperson welcomed the presence of the Deputy Minister and some new Committee Members. "We come from different political parties, but we see ourselves as representatives of our people".

Deputy Minister remarks
Mr Philly Mapulane, Deputy Minister of Communications and Digital Technologies, said the Committee requested the Department to deal with four items: BDM policy, SA Connect, 4IR strategic implementation, and consequence management in this portfolio. What will be presented on BDM was not new, it is something that had been shared with the Committee. The Department told the Committee in August 2021 that Cabinet had adopted the new approach in the implementation of the broadcasting digital migration, which was focusing on a national approach instead of the province-by-province approach. At some point, the North West, Northern Cape and Free State were identified as pilot projects for implementation. However, later Cabinet took the view that the approach was not going to assist progress in meeting the 31 March 2022 deadline as announced by the President. The Minister then led a process to review that approach, which culminated in the Cabinet approving the new approach.

We are happy to announce that to date there has been a switch-off of analogue transmission in the five provinces – Limpopo, Free State, Northern Cape, North West and Mpumalanga. There are no analogue transmissions taking place in those provinces. As we speak, Sentech, as the signal distributor, is restating the frequencies in these provinces to free up the frequencies for spectrum allocation. ICASA will release the spectrum through an auction on 8 March 2022.

The Minister has gazetted 31 March 2022 as the date for South Africa to be switched off from analogue transmission. The details will be shared with the Committee during the presentation. The Department was pleased with the progress made under the leadership of the Minister. Now, come 31 March we will be moving completely from analogue to digital transmission. It is an exciting development because this programme has been delayed since 2015. The first target was 2015; now seven years later we are delivering on this programme.

The second briefing on SA Connect would be a new presentation. We hope for sufficient progress so that when we come back to present, more progress is achieved on this programme. In December 2013, the Cabinet adopted the broadband policy and SA Connect was conceived. Initially, it was divided into two phases due to the complexity and scale of the project. The first scale was to be a pilot project, which was to connect public facilities. The second phase was to connect the remaining facilities. To date, about 800 government facilities have been connected as part of phase one. This was led by State Information Technology Agency (SITA), Sentech and Broadband Infraco (BBI) and was successfully concluded.

For the second phase, government decided there must be a feasibility study and it was commissioned led by the Development Bank of Southern Africa (DBSA). The result of the study estimated that the cost of rolling out phase two will be approximately R8 billion to connect the rest of South Africa. When we received the report in August 2021, the Minister believed the cost was exorbitant. Therefore, she looked at developing a new approach where the responsibility to connect South Africa will be shared with the ICT industry. This approach was considered and a steering committee and project managers were identified to work out the technical details of this new approach. Around September, Cabinet approved this approach of SA Connect to connect the rest of South Africa. Part of the approach is to look at the new licensing regime, which is part of the spectrum allocation by ICASA.

He did not want to get into the 4IR implementation because the President had appointed a Presidential Commission on 4IR. The President is the Chairperson of the Commission, and the Department was providing support. The details will be shared along with the consultations that have taken place.

Lastly, on consequence management, the Director General and the rest of the management will share the systems put in place to ensure this. They will also raise the audit findings and what has been attended to.

Department of Communication and Digital Technologies briefing
Ms Nonkqubela Jordan-Dyani, Acting Director-General: DCDT, outlined the background to the SA Connect policy when it was adopted by Cabinet in December 2013. Due to its scale and complexity, the programme was divided into two phases: Phase 1 was a pilot phase to provide 10Mbps (megabits per second) broadband services to 35 211 government facilities; Phase 2 focused on connecting the remaining front-line government services. Due to budget cuts in 2017, the scope of the work for Phase 1 was significantly reduced. 970 government facilities were then connected as part of Phase 1. The remainder of the facilities will be included as part of Phase 2.

The revised model of SA Connect Phase 2 in the provisioning of ICT services to households in underserviced areas includes:
- Electronic communications service providers licensed are obligated to connect 18 036 schools, 3 873 health facilities and 8241 tribal authority sites within 36 months from date of licensing.
-The Department and ICASA are negotiating with telcos who did not fulfil their social obligations from the 2014 licensing conditions to connect the 15 691 government sites, including 949 libraries and Thusong Centres, in line with the SITA mandate; SITA will provide and maintain connectivity to government sites.
-The connection of South African communities and homes to the internet will be facilitated by Broadband Infraco (BBI) and Sentech working with SITA and the ICT industry on an open access principle. This will enable access to the backbone infrastructure including base stations and points of presence.
-This partnership will enable small and emerging services providers such Internet Service Providers (ISPs), Wireless Access Service Providers (WASPs), Mobile Virtual Network Operators (MVNOs) and the ICT Mobile Network Operators (MNOs) to connect communities within 36 months.

The presentation also covered monitoring and evaluation; National Connectivity Index of district municipality broadband coverage; key interventions; implementation plan and Phase 2 plans. The total CapEx budget required is R2.53 billion incl. VAT, to provide broadband infrastructure within the next 36 months.

On the BDM policy, DCDT will terminate analogue television services across the country by 31 March 2022 and connect television households to digital platforms. The presentation covered the background; progress made since the last Committee briefing; analogue switch off (ASO) progress; critical success factors and the resolution tracking tool.

As for the Fourth Industrial Revolution, the President established the Presidential Commission on the Fourth Industrial Revolution (PC4IR). Progress to date included the PC4IR Strategic Implementation Plan (SIP); implementation methodology; strategic priorities and the PC4IR key recommendations.

On consequence management, the disciplinary process in the public service was outlined for allegations of financial misconduct as well as unauthorised, wasteful, fruitless and irregular expenditure. The loss control committee of the Department dealt loss of assets such as laptop, projector and cellphone items. Noting the Department's audit action plan, it is currently addressing the irregular expenditure cases which will result in consequence management. Reports are being prepared on these to submit to National Treasury for condonation.

The Chairperson was pleased with the assurance about meeting the BDM deadline that had been set. The Committee has made it clear that it would not want to be part of project timelines being delayed all the time. He was pleased that people would be able to raise queries after the installation of their set-top box if there were problems. This was something that the Committee was worried about due to the problems experienced with the first set-top box installations. What is the plan for the targeted subsidised group of people after analogue technology becomes obsolete? We must always ensure that they have access to broadcasting services. Sentech will hand over set-top box customer service to the SABC. Is that going to be for technical queries?

Dr M Basopu (ANC) commented on the BDM, SA Connect and the 4IR projects, saying that what was not clear was consultation with labour stakeholders. He would like the Department to take the Committee into confidence that this was done. That sector can be problematic on issues of transformation.

In the implementation and monitoring of these three projects, DCDT must strengthen its working relationship with the stakeholders and agencies that will become implementing agents. Perhaps, at a political level, the 'war room' should be revived because it could play an important role in the monitoring of these projects.

The Chairperson raised SMMEs. In previous reports, they have been disruptive due to the grievances they had such as with the pricing – the market price versus what the state was willing to pay. He asked if those grievances have been resolved because we would not want people who come up as business forums to stall processes and cite lack of engagement and pricing as an issue. This had been reported as part of the reasons for the delay when the Sixth Parliament Committee started.

As for SA Connect, it will help that we would move beyond just the connection of government institutions but South Africa as a whole. This is an area that was identified as part of the programmes of the Economic Recovery and Reconstruction Plan (ERRP).

Part of the problem is underspending the budget for SA Connect so the budget gets cut and gets redirected. Committee members now know the implications of that from living in areas still experiencing connectivity challenges. He raised this because of the additional R200 million directed to SA Connect, which is to bring the youth on board. Is the plan that is in place going to assist in ensuring that the resources are well-spent, including the additional resources?

On infrastructure ownership, initially, the approach to broadband would be to get SMMEs to come on board but it becomes problematic if that partnership gets structured to a point where the government seems to have put up the infrastructure but does not own it. How is this going to be addressed in the new plan?

On 4IR, it seems that we are still being given what the Department would like to see happening. There are no tangible programmes in place yet that the Department can speak to. However, it can speak on the implementation plan and conceptualisation of this project.

Lastly, on consequence management, the Department must clarify who plays which role because we do not want to see a situation where a board gets into the space of operations in entities. He wondered if consequence management matters were resolved. He did not understand what the Department meant by some cases were not yet resolved. These unresolved cases could be the reason why things are stalling in reaching finality. What is the plan with USAASA to ensure that the cases that occurred were not repeated?

Department response
Ms Dyani assured the Committee that although the decoders were evolving, the Department would invest in the SMMEs as far as creating a new sector for the installer and refurbishment programme. While the installers are in place, we must assess if we can use certain components of the decoders or modernise them. Members would note that during the SONA debate, the Minister stated that we will be introducing a new programme for data capturers. We want to use smart devices to ensure that the data is available in the households. The decoders that will be deployed will ensure we have an internal built mechanism that will have wi-fi coverage in the household. We were deliberate as a Department to ensure that we do the recruitment at local government level because we want to set up the refurbishment centres in each community so that people will not have to suffer and travel distances when they encounter challenges with the decoders. We are intending to modernise the decoders as time goes. We have also introduced that citizens can look for smart TVs or the ID TVs available on the market and those with the digital logo are the ones that are certified with in-built technology to transmit digital content. We are working with the Department of Trade and Industry and Competition and the Minister will be gazetting a notice to stop the import of analogue TVs into the country as well as the sale thereof. This should be done by June 2022. The Department will partner with its agencies to develop new content in the industry.

The recruitment of the installers was at local level and we have created over 3 100 jobs and over 500 SMMEs – the numbers were still growing. Working with the Department of Public Works, we also employed 1 000 Expanded Public Works Programme (EPWP) workers for recruitment for this project. Due to budget cuts, we had to scale down but through USAASA we have employed district managers and unemployed youth to go into various districts to assist with the registrations and work with local municipalities and other local structures.

After we have completed the migration, the Department will embark on a new project of data capturing. This is part of the digitisation of government. We have received requests from the Department of Human Settlements and Labour to assist in the digitisation of their data. This is some of the work that we will be doing under the District Development Model (DDM).

On the concern about underspending on SA Connect, the budget cuts are not of DCDT's doing. Previously, there was a programme to source resources to subsidise university students and a huge bulk of what was earmarked for SA Connect was deployed to the Fees Must Fall programme. The Department was also subject to the same budget cuts for Covid-19. To ensure the modernisation of the economy, we need to ensure that broadband connection is available for all. There is a collaboration between Sentech and BBI to ensure that there is connectivity for all, especially in local and remote areas where most of our indigent people are based. There are also efforts to ensure that transformation in the sector is prioritised. The Minister and the Deputy Minister have already started engaging Internet Service Providers (ISPs) and other service providers for this project. The recruitment will be done at the district and provincial levels.

On 4IR, the teams have done extensive consultations and there is a lot of work being done by other sectors. The Department has decided to pick a few of these initiatives but also work with the private sector and industry partners for execution.

Mr Omega Shelembe, DCDT Deputy Director General: SOE Oversight, said that the focus will be that the set-up box technology will reach end of life and will need to be replaced. What we are seeing from a technology foresight point of view is that the set-up box will be replaced with a smart box that is internet enabled. The Smart TVs will also replace the set-up boxes. The evolution is also on online TV – it is called Over the Top – which supplements conventional platforms. This is growing very strongly to be the focus area. Satellite is growing very strongly in the country because of its reach and content accessibility. This is also another area of focus in the future.

On Local Economic Development objectives, particularly for SMMEs and job creation – all the entities that have been appointed to do the installations for BDM were small companies. There is a total of about five to eight companies that we are engaging to assist government with the rollout of this project. This will create about 3 109 job opportunities.

Mr Tebogo Leshope, Chief Operating Officer, Sentech, said a lot of consequence management has taken place in USAASA. It was now operating with an interim board. The previous board’s term could not be renewed because of dissatisfaction with the entity’s performance. Secondly, a process was underway to give effect to the policy decision of 2016 that USAASA would be dissolved, and a new entity will be created to look after the Universal Service and Access Fund (USAF).

Deputy Minister Mapulane said that the current set-top boxes under installation are the ones that were procured by USAASA a while back. They carry a two year warranty – if there is anything wrong, the beneficiary can call the manufacturer. After two years, technology changes at rapid speed and in two years, we are envisioning something else. Now a call centre is being established as part of the after-market support and administered by Sentech. If there are any issues with the installation or the working of the device, beneficiaries can call the call centre for assistance. After the analogue switch off at the end of March this year, the intention is that the SABC will take over the call centre and administer it as we go ahead.

The matter of non-payment of the installers has been resolved as there was an engagement with Treasury. Therefore we are not getting any more complaints from the installers about non-payment or the rate at which they were being paid. This matter has now been resolved.

Deputy Minister Mapulane confirmed that USAASA would be dissolved. The board’s term was due to end in February, but it has since been extended. The entity will be dissolved for various reasons including performance and other matters that the Committee may be aware of.

On the District Development Model, the Department is committed to it as it rolls out its programme and this is a model that it will be using because it takes services closer to the communities.

There is a strong partnership on SA Connect among the players in the industry and the state-owned entities (BBI and Sentech). The Minister has been engaging with ICASA and the industry is aware that there are social obligations. The bulk of the connectivity will be taken up by the industry players. Therefore it is important that there is an understanding of the consequences of not complying with the social obligations. There are mechanisms in place to ensure that these social obligations are carried out.

The Chairperson thanked the Department for its input and comments.

Committee Report on SITA 2020/21 Annual Report
The Chairperson took Members through the Committee Report page by page. The report was adopted without substantive changes.

The meeting was adjourned.

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