Convergence Bill: hearings

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
15 August 2005

Convergence Bill [B9-2005]
Alcatel presentation
National Community Radio Forum submission
National Community Radio Forum proposed licensing model
National Community Radio Forum pie chart (see www.ncrf.org.za)
National Alliance of Independent School Associations submission

SUMMARY
Alcatel presented its view of the Bill, noting the need for specific attention to the issue of Internet and broadband, as broadband was seen as the way forward. All users really wanted simplicity, and the way in which services were packaged could determine the possible market for those services. The company made submissions and proposals in respect of Chapters 1, 2, 3, 8, 11 and 12 of the Bill.

The National Community Radio Forum (NCRF) then submitted a detailed proposal for rewording of a number of clauses. It stressed the need for empowerment of historically disadvantaged communities, and urged that this empowerment be addressed in the Bill.

The National Alliance of Independent School Associations (NAISA) submitted an argument for the extension of subsidies from the Universal Service Fund (USF) to needy independent schools as well as to public schools. The provision that the fund could be allocated only to public schools and public further education and training institutions was seen as discriminatory and out of touch with the current Department of Education approach.

MINUTES

Alcatel submission
Mr L Khumalo (Deputy CEO) introduced the company as an end-to-end solution provider. Alcatel occupied top positions in key technologies, and was a key player in technology standards. Believing that finance was a business enabler, Alcatel was also involved in a number of projects in respect of funding and carried a dedicated team of financial and legal professionals.

Key model drivers had been identified as broadband, the demand for user-centric services and customers looking for a trusted partner. The telecommunications market had evolved through three distinct waves of services. The first wave, starting in 1995, had been connectivity, with multiple new connectivity services. The second wave, starting in about 2000, had been broadband services in connectivity, and the current wave was one of user-centric broadband services. Africa, and South Africa in particular, were still in many ways in the connectivity phase. There was undoubtedly room for growth, with South Africa showing between 10 and 20 per cent broadband subscription per household. South Korea was a leader in this, with subscription between 80 and 90 per cent per household.

Businesses were looking for real time management, and communication and productivity tools available anytime and anywhere. Consumers wanted first connectivity, then organisation, then entertainment and then empowerment. While the Bill covered many issues in respect of consumer requirements, queries remained on broadband access, and the service aware edge had not been fully addressed. Insufficient attention had been paid to the service delivery platform. In Chapter 1, it was questionable whether the definition of broadcasting service was real time or not. This could have a significant impact on potential broadcasters. No reference had been made to broadband and the Internet in Chapter 2, and the categorisation of class licenses by the Authority in Chapter 3, Clause 16 needed to be addressed. The Independent Communications Authority of South Africa (ICASA) should categorise class licenses to enable the public to know what class license to apply for. The question of the ability of class licensees to lease facilities arose in Chapter 8, and the submission noted that the web address www.112.co.za had already been taken, although it was reserved in terms of Chapter 11. It was submitted that Chapter 12 should be extended to include the encouragement and facilitation of the growth of broadband access and services, and the growth of reliable and future proof access to information networks.

Alcatel further submitted that a special chapter be devoted to content, and its creation, management and distribution. Particular attention should be paid to the Internet and Internet protocol, and voice-over IP (VoIP), as this was driving evolution in the rest of the world. Internet and IP should not be included with data. A further issue was the lack of clarity on the desired impact of convergence on social services, such as education and eGovernment.

National Community Radio Forum submission
Mr D Moalosi (NCRF Projects Officer) introduced the NCRF as a national, member-driven association of community radio stations and support organisations. Radio station members were independent non-profit community-based organisations (CBOs), owned and run by diverse local communities, who actively participated in the development of programming activities for sustainable non-discriminatory local development. The functions of the NCRF included the monitoring of implementation of sector standards and the provision of information and advice to members. The NCRF saw the Convergence Bill as a step in the right direction, but it was essential that the Bill address the problems faced with the existing process, particularly the problem of long delays.

The NCRF’s detailed proposals in respect of rewording and reconceptualising the Convergence Bill can be found in the attached submission. A detailed proposed licensing model was also submitted, and particular note was made of the transfer of application services to the "Notification" or exempt category.

National Alliance of Independent School Associations submission
Mr H Bennett described the purpose of the submission as the presentation of an argument, based on empirical evidence, for the equitable treatment of all schools in the Convergence Bill. NAISA applauded the spirit of the Bill, but drew attention to aspects that potentially undermined its intent, notably the Clause restricting the Universal Service Fund (USF) to public schools, by implication excluding independent schools.

Clause 80(1)(a) provided "for the assistance of needy persons towards the cost of the provision to, or the use by them of communications services", but Clause 80(1)(c) provided that the money from the USF be used exclusively for the payment of subsidies, inter alia, "to public schools and public further education and training institutions …". There appeared to be an internal inconsistency between the two clauses. The restriction of the fund to the public school sector discriminated against a large segment of the independent school sector, whose conditions were worse than those of the public school sector and whose learners should be regarded as needy persons. This appeared to be based on the assumption that all public schools and public further education and training institutions were poor, and that all independent schools and independent further education institutions were wealthy, or not in need of subsidy. Although this might have been correct historically, it was no longer the case. Both sectors now consisted of a minority of well-resourced schools and a majority of poorly resourced schools.

Since education was a critical enabler of national economic policy, conditions should be created to optimise access to quality education whether public or independent. NAISA submitted that the Convergence Bill provide that all schools and further education and training institutions, public and independent, be subject to the same requirements and levies, and be afforded access to the same benefits. It was not proposed that educations organisations operating for profit be entitled to such support.

If the focus was to assist the poor in general terms and educational providers to the poor in particular, it was proposed that the wording for Clause 80(1)(c) be amended to delete the references to "public", and insert a provision restricting funding to needy public and independent schools. This separation of under- and well-resourced public schools would not create an administrative burden, as there was already a mechanism for doing this.

Discussion
Ms D Smuts (DA) concurred with the basic point of departure of the NAISA submission. Ms S Vos (IFP) also concurred.

The Chairperson asked the opinion of the Department of Communications on the NAISA submission. Mr J Mjwara (Deputy Director General: Multi-Media: Department of Communications) replied that the terms used in the Bill had come directly from the Department of Education. They would have to be consulted in framing the legislation, and he was concerned that the proposal might raise difficulties. The Department would consult with the Department of Education to draft a policy that was more reflective of the Department of Education’s policy.

Ms Smuts remarked that the NCRF had suggested that one unintended consequence of Clause 5 would be that small operators would not be able to engage in self-provisioning. This confirmed the argument that people should be allowed to approach the regulator direct.

Ms Vos referred to the notion of a knowledge-based society, and suggested that Alcatel was clearly reaching to the first economy. What was their view on the self-provisioning of resources and the building of networks, with specific reference to the second economy?

Mr Khumalo replied that Alcatel would welcome self-provisioning, as it was a supplier of equipment as well. Each time infrastructure was created, there was an associated cost, however, and that was necessarily passed to the users, so there were both pros and cons to the concept. It might make more sense for the service provider to lease from the incumbent, for example. The environment and the quality of service from the incumbent should inform this.

Financing was one way in which Alcatel was servicing the lower end of the market. Advice was also given to providers on how to roll out their services. It came down to a question of who could afford what, and in what service package. The South African movement to under serviced area licenses (USALs) was also an interesting case for self-provisioning, but once again there were pros and cons. Alcatel also had social corporate investment programmes, and strongly advocated sustainability.

Ms Smuts asked the status of the common carrier signal. Mr Mjwara replied that there would be a number of major infrastructure providers, and all would have to act within a particular framework. They would have to provide access and interconnect in a non-discriminatory manner. This would be applied across all service providers, so the concept was not being removed. Intelligent interconnection would also have to be considered.

Ms Smuts suggested that the Department of Communications brief the Committee on a number of matters, including the undersea cables and landing platforms and the unbundling of the local loop.

Mr M Mohlalonga (ANC) asked whether the strategies to address empowerment of historically disadvantaged communities were not adequately covered by the Black Economic Empowerment (BEE) Act and the ICT Charter.

Mr Moalosi replied that this concept was not clear in the Convergence Bill, and had not been made obligatory. The document had to be relevant and applicable. The ICT Charter was silent in terms of the historically disadvantaged communities being brought into the economy. The IPA Act and the Broadcasting Act had these areas clearly outlined, and the NCRF was recommending that these be included in the Convergence Bill.

Mr Mohlalonga asked the NCRF to elaborate on its recommendation that all matters pertaining to ICASA be moved to the ICASA Act.

Mr Moalosi replied that there were still radio stations in Johannesburg that were not yet on air despite applications dating back to 1997. There was a high demand from communities, and it became very difficult when stations closed. The NCRF was suggesting that licenses not be closed down, but that other interested members of the community be invited to take them over. Public accountability was needed.

Mr Mohlalonga asked for clarity on the proposal that no person in a senior position in a political party should be in a position to control a radio or television licence.

Mr Moalosi replied that this Clause applied in terms of the IBA Act. An office bearer, branch executive committee member of member of a national executive committee might not participate. The principle was that it was not possible for a political party to run a broadcasting organisation, as this would be a reversion to apartheid.

The Chairperson asked what progress had been made with the ICASA Amendment Bill. Mr Mjwara replied that the Department was making progress with the Bill, and hoped to place it before the Committee in the near future.

The Chairperson asked the view of the Department on the NCRF submission on signal distribution spectrum issues and community service obligations. Mr Mjwara replied that, in respect of spectrum issues, the plan referred to was the assignment plan, rather than the allotment plan. In respect of community broadcast social obligations, this was the first time that the Department had seen the concept, but he felt that the conditions related to the governance of the institutions. These did need to be further defined and standardised, and the regulator could perhaps be asked to develop them as part of the licensing conditions.

Mr Moalosi noted that the NCRF had suggested that there should not be a "one size fits all" approach in respect of assignment.

The Chairperson asked the reason for the NCRF proposal to extend the period of record keeping to 60 days. Mr Moalosi replied that VH Air was used for recordings, and these were used more than once. There had been a 90-day record keeping policy, and the NCRF submitted that a 60-day period would allow for any complaint to be handled satisfactorily, rather than the 30 days as provided for in the Bill.

The meeting was adjourned.