Icasa, Sabc and Usa: budget hearings

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Communications and Digital Technologies

08 June 2004
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Meeting Summary

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Meeting report

COMMUNICATIONS AD HOC COMMITTEE
8 June 2004
ICASA, SABC AND USA: BUDGET HEARINGS
 


Chairperson: Mr M Lekgoro (ANC)

Documents handed out:

ICASA presentation
SABC presentation
USA presentation

SUMMARY

 

Presentations were made by the Independent Communications Authority of South Africa (ICASA), the South African Broadcasting Corporation (SABC) and the Universal Service Agency (USA). The challenges facing ICASA included infrastructure needs, the high costs of litigation, the continued shortfall in funding and the high staff turnover. Questions from the floor concerned the high Telkom rates, licencing of community radio stations and of a second operator, consumer protection and the improvement of services for the hearing disabled and those living in under-serviced areas. Funding and infrastructure were also seen as challenges facing the SABC. The discussion concerned the migration to digital technologies, access to radio and TV services, SABC editorial policy and services for the hearing disabled. The USA presented its goals, objectives and strategies and the funding needed to implement programs. The questions from the floor related to funding, the types of services that USA provides, community needs and ownership of infrastructure.

MINUTES
Independent Communications Authority of South Africa (ICASA)
Members of ICASA Delegation: Mr M Langa - Chairperson, Mr P Gerhard - Acting CEO, Mr R Hart - Financial Manager, Ms J Hope - Councillor, Ms M Ncetezo - Councillor, Mr M Mohlala - Councillor, Ms N Bulbulia - Councillor, Mr L Mtimde - Councillor.

ICASA gave a brief review of its achievements and set out its projects for the 2004/2005 year. There were many challenges facing this regulator as it has a relatively small budget. ICASA operates in a litigious environment and the costs of court cases are very high. The other areas ICASA is involved in are Communications, Consumer Protection and Council Support. Funding is also needed to maintain international relations and ICASA is affiliated to bodies such as the Telecommunication Regulatory Association of Southern Africa (TRASA) and the International Telecommunications Union (ITU).

ICASA renewed eighteen sound broadcasting services and three TV broadcasting services. New projects for 2004/2005 included the licencing of subscription broadcasting services, community services, low power broadcasting and the renewal of Orbicom category two signal distribution. A number of other engineering and technical developments were highlighted.

Mr Hart showed that there was an overall shortfall in funding in 2003/04 of 30% and that this is repeated in the 2004/05 budget. He highlighted the ongoing problem with VAT that is owing to SARS and said that very little capital expenditure was taking place. The ICASA Chairperson also drew attention to the high staff turnover in the organisation and mentioned that a new CEO had been recruited, Ms Jacqueline Mantshe.

Discussion
Ms D Smuts (DA) asked what was being done about the high Telkom charges and whether ICASA had the resources to monitor Telkom technology. She questioned whether Telkom was guilty of trans-subsidising services. She also asked about the second national operator (SNO) and questioned the fairness of the bidding process and what ICASA's role is or was. A further point of concern was the election coverage that the ANC had received and the judgement that was made on the DA, IFP and UDM's complaint about this. She asked why this complaint had been discharged (it was said that other parties had been given coverage as well) and yet there was a warning now of the need for "impartiality under normal broadcasting rules".

Ms S Vos (IFP) said her questions were similar to Ms Smuts but she also asked whether there was not "steamrolling" by ICASA with regard to legal matters. She asked what ICASA's role was in protecting consumers. She said that a second subscriber was not going to bring prices down. Ms Vos also asked why ICASA had not been vigilant with regard to Acts being passed through the Intelligence and Defence Departments as these impinged on ICASA's independence as a regulator.

Dr P Mulder (FF) commented on community radio and noted that after a four-year process some licences had been denied. He asked what the procedure was for these radio stations to reapply. He also questioned the allocation of geographic stations versus interest stations and the representivity of the community the stations served. He said that more radio stations should be encouraged and asked whether refusals were because of a frequency problem. Mr Mulder's last question concerned the progress with digital broadcasting.

The ICASA Chairperson, Mr Langa, said the organsation was involved in the process of licencing a second operator. The State President had referred to this process in his State of the Nation address and had recommended that government use all its resources to bring into play a second national service provider. He said questions regarding this should therefore be addressed at Government and that the opportunity to do so would be available when the Minister addresses the National Assembly on the 22nd June. When it finally happens, ICASA will have to play a role in ensuring that licence conditions are met.

Ms M Ncetezo referred to the cost structure at Telkom and the question raised about cross-subsidization. She said that Telkom's financial records were due to be presented at the end of July and they could then be checked.

In answer to Ms Vos's statement that competition in the mobile phone market had not brought prices down, there was general agreement that it had in fact done so.

Mr L Mtimde said that the judgement in the case that Ms Smuts had referred to was not a complaint about a specific case but was rather an overall observation and the ruling was based on that.

He said that 54 geographic and 38 interest licences had been granted and that the "representivity" referred to in the process was in terms of the community that had been defined and not in terms of the whole of South Africa.

Mr Ryan said that R182 million was needed for ICASA to meet its mandates but only R132 million was being received. He felt that despite this, ICASA was managing to function very well and was delivering on its mandate.

In regard to digital broadcasting, Mr Petrick said a bold step had been taken by ICASA. A band has been reserved for digital but there was concern about regional TV. A plan had been published and gazetted but the actual time to migrate had not been decided and without a clear policy this was as much as could be done at this stage.

He said there was also some spare capacity in terrestrial broadcasting and some pilots had been started.

Mr R Pieterse (ANC) questioned the uneven spread of community radio.

Mr M Mohlaloga (ANC), responding to Ms Smut's comments, said the ANC did not rely on broadcasters to communicate with its constituents. He also found it interesting that commercial radio services attract young people and asked if there had been any progress with regard to the licensing of a national youth radio station. He asked about the viability of a long-term contract with Telkom if a second operator is appointed and also what had happened with the licencing of a 4th mobile service provider. He further questioned Telkom's mandate in terms of international calls over the internet and expressed concern about some of the photographic material presented on TV.

Ms W Newhoudt-Druchen (ANC) asked how ICASA was working with stakeholders to ensure that there is improved communication and access to broadcasting and telecommunications for the hearing disabled.

Mr Lekgoro said that the issue of broadcasting to the disabled involved an estimated 4 million people and that this point had been canvassed for too long. He acknowledged that it was a difficult issue for broadcasters but said that little headway was being made.

Mr A Maziya (ANC) asked for more clarity on the issue of high staff turnover in ICASA. He questioned what was being done to educate communities on how to apply for a community radio licence for example. He asked what ICASA knew about the pull-out of certain foreign companies from Telkom or if these media reports were untrue.

Mr Mulder wanted to clarify if community radio stations that had been refused licences could reapply after the first refusal.

Ms N Mokoto (ANC) said that some parts of South Africa did not have access to TV and asked if there is a plan to respond to this need.

Ms Ncetezo (ICASA spokesperson) said that a lot of work has been done in the area of consumer protection and consumer education. Extensive roadshows have educated people about what is happening in telecommunications, licencing, how to lodge complaints and how the community could get involved. Pamphlets in most official languages have also been published and distributed. She said that the issue of the disabled was being addressed and a plan was being finalised. Twenty-seven new licences had been applied for in under serviced areas and of these ten will be granted in the first phase. Mr Langa added that current licences do not reach out to many rural areas and that new licensing processes were being looked at. The aim was to open up education in all areas.

In reply to Mr Mulder's question, Mr Langa said that applicants have the right to apply again and need to make sure that the requirements as stipulated are all met.

Mr Langa said that ICASA does engage with other legislative processes undertaken by other committees (e.g. Defence and Intelligence Service), that the role of this portfolio committee was welcomed and that it had access to all ICASA's reports. Ms Vos interjected that this did not answer her question. The ICASA Chairperson then said that with the induction of the new Councillors in July, all legislation that impacts on ICASA as an authority will be investigated and they will then be able to see what further steps need to be taken.

Ms Bulbulia said there was no national youth station but the SABC was putting something on the table. The aim was to develop a landscape of diversity but feasibility depended on the technology available.

Ms Hope said reaching rural areas was a problem because of lack of proper skills and funding to provide the infrastructure.

Mr Petrick clarified the statement about staff turnover and said that the 43% of all the resignations were management posts.

Chief M Nonkanyana (ANC) questioned the R3 million needed for legal costs. He asked if ICASA did not oppose certain cases, did this mean that fundamental decisions were taken against the organisation?
He enquired how ICASA out-sourced its work (e.g. which law firms were used) and why there were no deadlines or time frames with regard to the implementation of projects. How was the portfolio committee to monitor progress if no time frames were set? He said his copy of the presentation consisted of many blank pages where budget amounts were concerned and asked if these could be supplied to members. The under-funding of 30% for the current year was worrying.

Ms Vos asked if ICASA had any information on the secret shareholder group at Telkom and that if this were known, it would help to bring down Telkom charges.

Mr M Johnson (ANC) also questioned where revenue was going and asked for projections on the budget.

Mr S Kholwane (ANC) asked what effect the financial constraints would have.

Mr Langa said work was distributed in a very transparent process. ICASA appointed a very wide spectrum of service providers both big and small.

As far as deadlines go, Mr Langa said they had tried to set out the budgets against some realisable date and that maybe these dates need to be looked at in their strategy workshops.

With regard to the "secret agreement" with Telkom, ICASA was as much in the dark as the Committee.

In closing Mr Langa said that when ICASA received the spectra licence fees it would be able to obtain the expertise it needs. This will mean it would become a well-resourced regulator and confidence in the organisation would grow. With that would come trust, more foreign direct investment and the creation of new jobs. This would bring about a brand new approach to TV and radio and ICASA would be able to act in the public interest.

SABC submission
All fifteen members of the Board were present. The following gave the presentation: Mr E Funde - Chairperson, Ms C Qunta - Deputy Chairperson, Head of Human Resources, Mr P.Matlare - Group CEO,
Mr S Mokoetle - Board Member, Ms S Rapeti - Head of Technology.

The Chairperson, Mr Funde, said the current Board was in its sixth month and its term ended in 2008. He highlighted the goals of the Board which were to provide an informative, entertaining and educative service and said the challenges were competitive pressures, human resources, funding and infrastructure. There were four areas where funding is needed: the technology plan, regional TV, Education and SABC Africa.

Ms Rapeti said the current book value of infrastructure was R220 million and this area was under-capitalised. There was a plan to migrate to digital technologies and the infrastructure funding required amounted to R240 million. In terms of the Broadcasting Act 1999 as amended, two regional TV services in languages other than those currently used on TV, must be funded by Government. ICASA has to still decide on these licences.

Mr Funde said that public private partnerships were being investigated and increased funding from commercial sources was being sought.

Discussion
Mr Maziya asked what was happening about the parliamentary channel as no mention had been made of this in the presentation. He said there was a continual complaint about the accessibility to certain stations and channels and asked how SABC was ensuring that there could be access to all channels. He also asked what systems were in place to encourage people to pay their licence fees.

Ms Smuts questioned the amount of funding that was being asked for. She asked what the SABC would do with this funding. She then went on to question the amount of live coverage that President Mbeki had received prior to the election and whether this was to "compensate for Mbeki bashing" as one spokesperson for the organisation had said. She asked whether the editorial staff make the decision about live coverage. She also asked who decided what advertising was allowed and said there was a need for guidelines. She also asked the SABC Board to explain how a technology company of which the Board Chairman is a Director, was given extensive coverage of its launch on TV.

Ms Vos mentioned that she had been told not to ask questions directly of the Board. She said she was confused about whether it was an editorial decision taken regarding the airing of the ANC election launch or a management decision.

Mr Matlare said that the spectrum gives three terrestrial channels and there were a number of key parliamentary broadcasts on these channels. The number of South Africans without access to TV had been reduced by 10 million. Reminders are sent out for renewal of TV licences two months before they are due, some by post and some by SMS. Names are kept on a national database and licence holders are supplied with a credit card size licence.

An SABC board member said sales and marketing were trying to establish the viability of regional TV. ICASA has stated that regional TV should have no advertising and be funded by government entirely.

Mr Lekgoro asked how it would be possible not to use English. He also asked how the R30 million for country stations was handled by the SABC.

Mr Matlare replied the SABC merely acted as a conduit and passed these monies on to relevant stations. The Department decided which stations are to receive the funding.

Ms Qunta answered the question on conflict of interests. She said that at the start of each year a Board member had to declare which companies he/she had an interest in and at each meeting of the Board there is an opportunity to update this list. She said the Chairperson of the Board was not a shareholder in the Company mentioned and that no contravention had taken place since the start of the new board in January. Also, the Chairperson had not been involved in any decision to air the launch of the company concerned.

In reply to Ms Vos's question of the editorial versus the management decision, Ms Qunta said the Management Board had not begun its operations at that stage and hence an editorial decision had been made about the airing of the ANC birthday celebrations and election launch.

The Chairman said the Board had policies that dealt with the issue of "Mbeki bashing" and that the Board was not in a position to go into what was meant by this statement.

Regarding BOP TV, Mr Funde said the Board had been briefed by management on the issue to see how it could be resolved and that the Board would respond in detail regarding this issue.

Ms Newhoudt-Druchen said the hearing disabled were not able to access the pre- and post-election programs and asked if there were any changes in policy to correct this. Mr Lekgoro added that such questions were repeatedly being asked and he was pleading for an answer.

Mr V Gore (ID) asked if consideration was given to the disabled in the SABC's tendering processes. He said more discussion was needed with regard to IT and broadcasting as taxpayer's money was being used.

Mr Haasbroek asked for an explanation of the relationship between the MD of News and Heads of TV and radio news.

Mr Mulder said that the SABC was an instrument to keep democracy going and it was the Board's responsibility to see that this occurred. He said the SABC had to give the "correct reality" and fairness in presenting news was important.

Mr Nonkonyana questioned the quality of the sound on certain radio stations and asked if this was a technical problem. He said there was insensitivity in the reporting of cultural issues on TV.

Mr Kholwane said the appointment of previously disadvantaged individuals (PDIs) was still a problem. Were there any plans to change the situation? He asked about the demographic makeup of the SABC.

The Board Chairperson drew attention to the goals of the SABC and highlighted the statement on equity. He said the Deputy Chair, as head of Human Resources, was looking into these matters.

An SABC Board member said the amended Broadcasting Act has drawn particular attention to the disabled and that the ICASA process and editorial policies meant that the Committee could hold the SABC accountable. Necessary investments needed to be made. He said there had been a steady increase in subtitling and one news bulletin in sign language but this was inadequate. There was no plan to address the needs of the disabled. A plan of action would be made available and it would be monitored. The Annual report would say how progress is going. On a more general note he said the SABC staff have a responsibility to fully understand and implement editorial policies. These policies may need to be improved to deal with the democratic principles of dignity, inclusivity and representivity.

Mr Matlare referred to the technology plan that had been devised. He said it would go before the board again as funding of R1.2 billion was needed over a 5 -6 year period. This would create a transformed technology base.

In reply to Mr Haasbroek the SABC MD of News, Mr Snuki Zikalala, introduced himself and said he was accountable to the CEO.

Mr Mulder said that the manipulation of the media for sectoral interests, as happened in the past, must not be allowed.

In closing, Mr Funde confirmed that the SABC's operations needed to uphold the democratic rights of non-rascism and nation building and to provide entertainment, information and education in all official languages. He said the Committee was there to monitor what the SABC was doing.

USA submission
Representatives: Mr S Gulube - CEO, Ms T Dibakwane - Senior Manager.

As there was no projector available Mr Gulube said he did not know that Parliament was an under-serviced area! He said the presentation would highlight the strategies, goals and objectives of USA for 2004/05 and the budget needed to deliver these goals. The programs provided by the organisation include telecentres, e-school cyberlabs, capacity building, research and evaluation, infrastructure development and deployment and the Information Communication Technology (ICT) awareness programme. The USA facilities consist of sixty telecentres, twenty-three Multi Purpose Communication Centres (MPCCs) and 129 Cyber-labs throughout the provinces. Mr Gulube said USA had a big mandate but limited funding.

Discussion
Mr Maziya asked whether the information Mr Gulube had given was up to date because the number of MCPPs in the Western Cape were more than what the presentation indicated. He said that if USA had an allocation for research, why was the organisation asking the Minister for information on schools? Surely USA, through its research, should be able to supply the Minister with information.

Ms Smuts asked who paid the monthly bill for the satellites that were needed for all the centres. She also asked why "rehabilitation of existing telecentres" was a necessary service for USA.

Ms M Morutoa (ANC) asked if anything was being done to upgrade the servicing of MCPPs and whether women's forums were included in the groups that are targeted.

Ms Mokoto asked how USA was integrating with ICASA to ensure under-serviced areas are fully covered. On the same issue, she asked who determined the service needs of a community and what the processes were to obtain the services of USA. She also asked for a clear picture of what a telecentre provided.

Mr Kholwane asked if Mr Gulube could elaborate on the number of jobs that were actually being created and for an indication of the problems that were being experienced in the various provinces.

Mr Lekgoro asked whether a person was employed to run an MPCC and to assist people who wanted to make use of the services provided.

Mr Johnson asked how ownership of the facilities worked especially those in schools. He said it sounded as though USA was "flooded" with requests for services. He asked what the programme was for the roll out of these centres. He said there was a disjuncture with the budget estimates and the actual plan.

Regarding the number of MPCCs, Mr Gulube said the figures related to the number of MPCC's they have put in and serviced and not to the actual number of MPCCs that there were. He said that MPCCs were now a priority. Some schools do not have electricity so USA also provides generators which are sometimes used to light up a whole village.

The equipment is recorded in USA's books and the correct depreciation levels are applied. There is a policy being developed to see how the transfer of ownership of facilities can be effected. Some centres functioned independently and needed to be handed over to the community but some are subsidised. They are never closed down because of inability to pay. If a community takes ownership there must be an NGO and a structure of governance that USA could hand the facility over to. Municipalities have different ways of running centres. Accurate records and books must be kept but this brought in new issues that have to be dealt with.

Mr Gulube said that USA had committed itself to building capacity through the introduction of the International Computer Driver's Licence (ICDL) and ICT training.

As far as funding is concerned, Mr Gulube said USA was entering into a Memorandum of Understanding (MoU) starting in July whereby 2 % of all revenue from the big five (SANTEC, MTN, Vocacom, Telkom and Cell C) would be used to provide services. He said USA was also working with these organisations to improve services.

Computers last about three years so targets are set over three years. Rehabilitation has to take place after this period. Other service providers do not involve themselves in such back-up work.

Communities were informed about the services by way of road-shows. On the issue of community needs, Mr Gulube said USA did not have the answer to all questions but that they needed to work with people on the ground to identify needs and viability. Telecentres provide six services: internet access, telecommunications, computer access, photocopying, faxing and printing. Community websites were also being set up and all information can be accessed from the Siyabonga (Orange Farm) website. USA was working with the SABC on the quality of signals received. The Provincial Education Departments provided useful information on facilities required in rural areas.

Mr Gulube said there was a difficulty with funding as the organisation never knows how much it will be receiving as this depends on the profits of the service providers. An ANC member said the challenge was to inform communities of ICTs and that USA plays a lead role in awareness campaigns. The Deputy Minister of Communications, Mr R Padayachee, said USA should initiate the coming together of the cell industry, Education, SABC, Local Government and Telkom to entertain such a lead role that also involved the portfolio committee.

The meeting was adjourned.

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