ICASA Annual Report 2002-2003: briefing

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Communications and Digital Technologies

21 November 2003
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Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
21 NOVEMBER 2003
ICASA ANNUAL REPORT 2002-2003: BRIEFING

Chairperson

: Mr M Lekgoro

Documents handed out

ICASA's presentation
Department of Communications Annual Report

 

SUMMARY
Mr Lumko Mtinde presented the ICASA Annual Report. He focussed on the successful merger of the Independent Broadcasting Authority (IBC) and the SA Telecommunications Regulatory Authority (SATRA) to create ICASA; the Broadcasting Regulatory Activities and the Telecommunications Regulatory Agenda. The Committee was convinced that ICASA was an well-organised and successful institution despite their financial constraints and a struggle to retain their staff. Mr Nyoka, in particular, was commended for his role in the successes of ICASA over the last three years and wished well in his departure.

MINUTES

Mr Lumko Mtimde (ICASA Councillor) tabled an apology from their Chairperson, Mr Mandla Langa, who was not able to attend. He then introduced Mr Nkateko Nyoka (CEO), Mr Mbuleli Nceteza (Counsellor) Mr Gerhard Petrick (Counsellor) and Ms Tracy McDonald (Chief Financial Officer).

Discussion
Ms D Smuts (DA) asked about the perceived bias in the issuing of licences by ICASA. Her concern was to establish if religious consideration was an important factor in the community sector allocations. She also asked if process of convergence was progressing.

The Chair said the Catholic Bishops Conference had made the point that they were unhappy about the closing of their station.

Mr Mtimde assured members that ICASA did not discriminate. The law guided the licencing process but in some cases, the reasons for not allocating a licence was due to a lack of compliance. There were 38 religious stations countrywide and many geographical stations also broadcast religious programs.

Ms N Mtsweni (ANC) asked for clarity around the Sentech court process and timeframes for the registration and licensing of regional television services.

Mr Ncetezo said there was no longer a court process because it had been withdrawn. Should the case be heard, it would be of academic nature. An Act of Parliament would supersede any regulation, in this instance the dispute between Sentech and Telkom regarding the public operator status of Sentech. On the question of convergence, he said a team at ICASA was appointed to engage the Department of Communications (DoC) and other stakeholders in this process. Several versions of the Bill had been discussed and they were awaiting the next version.

Mr V Gore (DA) asked how and where the extra money requested by ICASA would be spent.

Mr Nyoka said the new financial model proposed (see presentation), emanated from a failed attempt to convince Treasury to increase ICASA's baseline to R220m. ICASA had generated just under R1 billion last year and they argued that Treasury should allow them to keep some money to fund their regulatory agenda. The problem with the Parliamentary Appropriation Model (PAM) was that it regarded ICASA as just another government agency applying for funds, regardless of whether authority they generated revenue as an independent regulatory. In the last medium term expenditure framework (MTEF) process, the Budget Committee of Treasury accepted their argument that PAM did not work for ICASA and that an alternative model for ICASA should be considered. Subsequently, it was decided that a task team comprised of the Department of Communications, ICASA and Treasury, be appointed to establish all the costs incurred by ICASA and propose a model acceptable to everybody.
On the VAT question, he said the IBA and SATRA had been assessed and it was decided that they were liable to pay VAT on grants received from government at the standard rate. SATRA's tax consultant had lodged an objection against that ruling but government later kept ICASA accountable for VAT of R37m when ICASA was subsequently formed. ICASA's budget did not allow for this expenditure and they had applied to be exempted. Treasury had paid the amount on ICASA's behalf because they could not be exempted. Their dilemma now was that they would have to apply to Treasury for this supplementary amount on annually until legislation was changed to prevent SARS from subjecting ICASA to VAT. Discussion was ongoing in this regard.

Mr P Sithole (ANC) asked how strictly ICASA applied the law and regulations with respect to compliance.

Mr Mtimde said they monitored compliance and licencing conditions closely and dealt with cases with a thorough process. Mr G Petrick mentioned spectrum monitoring (an engineering function to protect a frequency licence holder from interference from unlicenced telephone operators); telecommunications monitoring (following up complaints in the telecoms division) and broadcast monitoring (two mechanisms, namely: (1) monitoring content off air by listening and comparing logs of the broadcaster to check that it corresponded with the actual broadcasts and (2) stations reporting their logs and statistics to ICASA, particularly community stations far removed from monitoring facilities.

Mrs W Newhoudt-Druchen asked what progress has been made with regard to access for the disabled, the deaf in particular, to broadcasting services and staffing. She was also interested to know if ICASA was adequately prepared for the advent of the Second National Operator (SNO).

Mr Petrick said it had been very useful to hold a conference with relevant stakeholders before beginning to define the needs of disabled people. The next step for ICASA would be an internal investigation to establish accessibility of their processes before deciding how these would flow into licencing conditions.

Mr Nyoka was mindful that ICASA did not have any disabled persons on its staff. Their biggest challenge was arriving at a definition for a disabled person that was not oversimplified. The matter would receive serious attention by the Committee appointed in this regard.

Mr Mtimde added that ICASA had probed all, including the SABC's, licence applicants to ensure that access for the disabled was included as a licencing condition.

Mr Nceteza said that, assuming the SNO was accredited, the next challenge would be for ICASA to merge the entities. ICASA was looking forward to the government resolving the merger mechanisms.

Mr Nyoka agreed that the integration process would be a major challenge. Since the Minister had decided to warehouse the 15%, there had been disputes as to the real value of the Easitel-Transnet assets.

The Chair followed up on the plight of the 4 million disabled people's access to media, especially, television. He said this matter was being discussed with SABC and others on a continuous basis, with no apparent significant progress. He asked for an multi-angled approach and assertiveness by ICASA to address the matter.

Mr Mtimbe said they definitely had a roll to play in this regard. ICASA had a code of conduct in their broadcasting services that referred to this requirement. With respect to the SABC, ICASA would reassess their licencing conditions and emphasise this particular concern during the public hearings.

Ms N Magazi (ANC) asked about the progress in the new numbering plan discussed during 2001.

Mr Nceteza agreed that the numbering plan had taken a long time. When ICASA was about to publish the numbering plan this year, they realised that there was no strategy on short codes. Subsequently, the Numbering Advisory Committee consisting of ICASA and all the stakeholders was established because revision of the plan was necessary in the light of changing legislation and new technology.

Ms Smuts was delighted with the prospect of a new funding model because she had always thought that a proportion of the licence fees should be used to fund ICASA. She also commended Mr Nyoka for his assertion that ICASA decide on the bidder for any given licence, and the Minister should do the formal agreement. She asked what the legal position regarding the appointment of the SNO would be in the light of the 51% stake dispute.

Mr Nyoka envisaged no likely legal difficulties because ICASA was out of the realm of the licencing process and would be looking for a strategic partner to whom the majority ownership would be given.

Mr Gore asked for clarity on progress around ICASA projects: (1) The delay with the issue of User-Licences, so necessary to encourage entrepreneurs in the industry. (2) The South African Band Replanning Exercise (SABRE) process, particularly around the Migration 1800 Spectrum, and (3) the Memorandum of Understanding (MoU) signed with the Competition Commission (CC).

Mr Mtimde said ICASA was in ongoing discussion with the Ministry about the appointment of a SNO. Hence it was difficult to make a pronouncement at this stage. With regard to Under-Serviced Area Licences, he gave the assurance that the process was rolling on. ICASA was creating an enabling environment and was processing applications, but it was unable to offer accurate statistics. From January 2004, ICASA would be going around the country to interview applicants with the hope of finalising appointments by March 2004.

Mr Petrick said that SABRE, the frequency plan in the 20 MHz to 3GHz range, was being reviewed. Public hearings were held on 1 November 2003. The document has undergone significant revision in terms of its format and now showed an international allocation for a frequency and the South African allocation. Both Messrs Petrick and Mtimde concurred that on the 1800 MHz spectrum, migration was ongoing and on course.

Mr Nyoka added that the Defence and Police Forces, not ICASA, was funding the migration process to the tune of R300m. He said the processes around the MoU were complex, therefore the processes of ICASA and the CC were generally slow to make a determination. He said the MoU was principally established a year ago to create an environment for ICASA and the CC to agree on the best body to deal with a complaint. Although they took about three to six months to resolve issues, the two bodies had a good working relationship.

The Chair asked when ICASA would be meeting with the SABC.

Mr Mtimde said they would be meeting with them soon and they would report back on deliberations to the Committee on input generated by the different stakeholders.

Mr Nceteza thanked the Committee for their support and reminded Members that their term of office would end in June 2004.

The meeting was adjourned.

Department of Communications presentation (awaited)
 

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