Convergence Bill: hearings

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Communications and Digital Technologies

07 June 2005
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Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
7 June 2005
CONVERGENCE BILL: HEARINGS



Acting Chairperson:
Mr M Lekgoro (ANC)

Documents handed out:
 

Internet Society of South Africa submission on the Convergence Bill
Internet Society’s Global Strategic Plan
Bokamoso Consortium (B-Tel) submission on the Convergence Bill
B-Tel (Pty) Ltd's Submission on the Convergence Bill [B9-2005]
Convergence Bill [B9-2005]
Internet Society of South Africa notes on Convergence Bill
Internet Society of South Africa presentation on Convergence Bill

SUMMARY
The Internet Society of South Africa, a non-profit organisation which promotes the accessibility of the Internet for the poor, and Bokamoso Consortium, a licensed provider of telecommunications services for an under-served area of the Free State, appeared before the Committee to give opinions on the Convergence Bill.

Major concerns raised by the Internet Society of South Africa centred on increasing the affordability and accessibility of the Internet to all, noting the current very high costs of Internet access. The Internet Society presentation also touched on the importance of regulation and competition and the negative effect the Telkom monopoly on infrastructure was having on the telecommunications industry as a whole. Both the Internet Society and B-Tel were concerned about the clarity of definitions. B-Tel’s presentation also focused on the lack of clarity in the Convergence Bill regarding the proposed licensing scheme and current rights, as well as possible future revisions of B-Tel’s area of service.

MINUTES

Internet Society of South Africa submission
Please see accompanying documents outlining the Internet Society’s presentation and original submission, summarised by Mr Paul Esselaar (Public Voice portfolio).

The Chairperson of the Internet Society of South Africa, Mr Alan Levin, spoke about the need to ensure more widespread access to the Internet, outlining the economic links in the Information Age between information, knowledge and skills, and wealth creation. Both the cost of Internet access was less and the proportion of the population that had used the Internet was higher in many other African countries than in South Africa, causing South Africa to lag behind in skills development. The high cost of Internet access in South Africa was predominantly caused by the Telkom monopoly on the infrastructure behind Internet access, as currently all Internet Service Providers (ISPs) must buy their connectivity from Telkom. This high operating cost was passed on to the consumers, who pay very high access fees. Internet access was most important to the poor, whose lives could be greatly improved by having cheaper access to the Internet.

Bokamoso Consortium (B-Tel) submission
Please see the accompanying document, summarising B-Tel’s top concerns about the Convergence Bill, presented by B-Tel’s CEO, Mr M D Moklethi.

Discussion
The Chairperson asked when B-Tel was going live-to-air and received the answer of 17 June 2005. The Chair also asked the Department when the ICASA Amendment Bill would be available.

Ms M Matiala, a Director from the Department of Communications, replied that they would be available tomorrow. The Chairperson was pleased that the document would be available so soon, as so many organisations giving submissions on the Convergence Bill wanted the opportunity to comment again on the ICASA Amendment Act once it was tabled. That would result in a duplication of the process if some were unable to comment on it in the current round of hearings.

Ms M Smuts (DA) asked if B-Tel was reselling wireless connectivity that it had bought from another company, or whether it had installed its own mast. She also asked where in the Free State B-Tel was operating, and whether they would develop a fixed network and have Voice Over Internet Protocol (VOIP) capacity.

Mr Moklethi replied that B-Tel was based around Welkom in the district of Lejweleputswa and was currently using bought connectivity from the networks of other mobile operators using funds from banks, the Industrial Development Corporation, and the South African Development Bank. They hoped to soon have a fixed wireless system of their own, and VOIP will be rolled out and provided to the local area.

Ms Smuts agreed with the Internet Society’s case against licensing content and application services, noting that this was the way it was done in Malaysia and also was the Independent Communication Authority of South Africa’s (ICASA) recommendation. She concurred that the idea of licensing was based on the rationale of fair distribution of limited resources, which did not apply to the unlimited resources of content and applications.

The Chairperson agreed, as content and application services were not telecommunications companies, but were rather using the medium of telecommunication to provide services.

Mr Levin applauded Ms Smut’s agreement that licensing content and applications would be restrictive, and stifle innovation and the sharing of information. He noted that if enacted, these licensing requirements would also be practically unenforceable, as there are hundreds of applications and hundreds of thousands of content providers in South Africa currently.

Mr Esselaar clarified that currently the licensing scheme was based on the ‘doctrine of scarcity’, which regulated access to scarce resources that needed to be managed. However, content and applications were unlimited, and thus the best practice would be to allow it to manage itself, as licences would be both unnecessary and unenforceable.

Ms S Vos (IFP) asked the Internet Society whether many Internet users would move off-shore, and how many content providers and website creators there were in South Africa. She also argued that the Department should present its intentions to the Committee regarding issues being raised about the Bill. The Chairperson supported this comment.

Mr Levin replied that it was too late to prevent Internet hosting from moving off-shore, as it already had, due to the high costs of hosting under Telkom’s monopoly. The question now was bringing Internet users back to South Africa, which would not happen if the government imposed a restrictive licensing scheme.

Mr K Khumalo (ANC) was concerned that the global nature of the Internet Society would cause it to lack an African context, and asked it to provide specific examples of confusing definitions in the Bill. He also asked for clarity on what the Internet Society meant about the Bill being general in scope, and asked for recommendations about how prices related to convergence and what should be done about high Internet access prices.

Mr Levin reiterated that the Internet Society of South Africa (ISOC-ZA) was part of a global movement, but one with thousands of members in Africa. Government participation would be meaningful if action was taken against Telkom’s monopoly, even if mistakes were made. Currently in the Bill, there was no certainty that Telkom’s monopoly would be challenged and that real competition would be feasible, which would lower prices.

Mr Khumalo, regarding B-Tel’s query if their R5 million annual allotment by the government would continue if they expanded their area of service, noted that if B-Tel shifted from its current role as a broker of development to be a more national telecommunications provider, than its role would change. B-Tel could still retain their licence, but they would have to face competition on the national level. He also asked for clarity from B-Tel regarding the retention of their current rights.

Mr Moklethi replied that currently they were licensed to provide all telecommunications for their designated rural area. However, they had ambitions to grow nationally, and therefore the legislation must both allow them to grow nationally and protect them while they were growing.

Ms N Mokoto (ANC), addressing both the Internet Society and B-Tel, asked for clarity regarding people being left out in section 84(1) dealing with licences. She also stated that exempting content providers from licensing requirements could be dangerous to vulnerable users. She asked both groups for suggestions on the funding of ICASA, and that they speak to the role of the Minister in relation to ICASA. She also requested examples of definitions not used in the body of the Bill.

Ms Matiala noted that in Chapter 13 Clause 1(d) of the Bill stated that all currently issued licences would remain valid until converted by the regulations. Furthermore, Clause 85(4) allowed for more rights to be requested by the licensee.

Mr Esselaar stated that various Acts do protect users from harmful content. Additionally, copyright laws can be used to protect the producers of content from having their content used unlawfully, for example, if an SABC programme was distributed over the Internet illegally. He emphasised that licensing content would stifle the freedom of expression. "Convergence" was not defined in the Bill, and some definitions referred to Clause 17 of the ICASA Amendment Act, which did not yet exist in the public domain, and that "application service" was defined as "value added to a telecommunications service" when in actuality an application service added value to content services via the medium of telecommunications.

Mr Moklethi stated that the status quo in the power balance between ICASA and the Minister should be retained.

Ms L Yengeni (ANC) asked for clarity on Clause 3, dealing with policy directions and the concerns that powers under ICASA’s purview were being shifted to the Minister. Which areas were supposed to be under the control of the Minister? She also asked the Internet Society why the regulations should be written concurrently with the drafting of the Bill, as amendments to the Bill would then require also amending the regulations.

Mr Esselaar repeated that the Internet Society viewed the Bill as a general framework, to which ICASA would add the specifics. However, as the Bill was so general, the public did not understand it, and was concerned about the range of regulatory possibilities provided for by the Bill. Therefore, an indication of the
direction ICASA was likely to take, for example, whether content services would require licences or not, would be useful and clarify the matter.

In reply to Ms Vos asking B-Tel again which network they were using, Mr Moklethi said that they were using the Vodacom network, but that they had deliberately not mentioned it before as they wanted to sell themselves, not another company.

Mr Khumalo asked the Internet Society to consider the report of the International Telecommunications Union, which reported that South Africa was in the top four for teledensity in Africa, and repeated that they must view South Africa in an African rather than a European context.

Mr Levin reiterated that although the Internet Society was a global organisation, there were 15 or 16 chapters of it in Africa. Although it had been true that South Africa was a teledensity leader, this was no longer the case, and that South Africa’s ranking was dropping quickly, now being behind Namibia and many other countries in teledensity. Furthermore, the Internet was cheaper in many other African countries than in South Africa, including Morocco, Mozambique, Botswana, and several others. Aside from Kenya, South Africa was the most expensive country for Internet access, with 1 Megabyte per second of connectivity costing $10 000 to $20 000 here, versus $2 000 for the same connection speed in other countries.

Mr Khumalo stated that while Vodacom and Telkom were putting hundreds of millions of Rand into their infrastructure development, B-Tel needed to work with the R5 million they had, starting small and then expanding beyond that.

Mr Moklethi responded that although B-Tel was thinking big, as an emerging business they needed legislative protection, but that the legislative framework must allow for their growth.

The Chairperson commented that competition was feared by all those who want to compete.

Ms C Nkuna (ANC) asked B-Tel about their concerns about definitional clarity in the Bill, particularly regarding "communications service" and "communications network service" in Clause 2.4 of their presentation, and asked for their proposed alternate definitions.

Mr Moklethi replied that although they had raised the definitional issue, they had no hard definitions to suggest now, but rather that the industry must jointly write and agree on the definitions used in the Bill.

Ms Nkuna noted the Internet Society’s argument that the Bill was vague. She asked if regulations should be provided by ICASA concurrently with the Bill being drafted, as regulations would usually be based on an Act, rather than a Bill, and that if they were drafted simultaneously, it would be confusing, as a reworking of the Bill would necessitate changes to the regulations.

Mr Esselaar answered that this was a new type of legislation, and it was understood that redrafting would be necessary. However, concurrent legislation would allow the public to understand where the tendencies of the legislation and the regulations about convergence were headed. Additionally, although regulations were more speedily changed than legislation, regulations have often not kept up with changes in technology, and that hence ICASA must have the ability to have a fast response to change.

The floor was opened for comments for questions from others in attendance.

Mr J Mjwara, the Deputy Director-General of Communications, stated that eventually there would be competition with Telkom. Regarding B-Tel’s wish to expand nationally, he clarified that they had their status as a ‘user’ only in areas with less than five percent connectivity, and that they must apply for a licence to operate in areas with greater than five percent connectivity. Furthermore, content licences would not be necessary for individual communication between citizens, but for service providers only, and that there was a difference between service provision and personal communication.

The Chairperson stated that individual communication was telecommunications via a network, but asked about individuals publishing over the Internet. For example, would the ANC Today online need a content licence?

Mr Mjwana replied that a licence would be necessary only if it was a business that published the works of others, not just one’s own work, as that would count as providing a publishing service. He raised the concern about distinguishing what should and should not be termed broadcasting, as the technology made it possible to distribute voice and still and moving images over the Internet, which was similar to broadcasting.

The meeting was adjourned.

 

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