Convergence Bill: hearings

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
24 August 2005
CONVERGENCE BILL: HEARINGS

Chairperson:

Convergence Bill [B9-2005]
Hartrao PowerPoint presentation
Primedia Broadcasting PowerPoint presentation

SUMMARY
Scientists from the Square Kilometre Array (SKA) team presented the radio frequency requirements and concerns of the SKA. It was particularly important that a stable regulatory environment be maintained in terms of radio frequency, as this was a key criterion for the bid. It was stressed that, should South Africa’s bid be successful, the SKA could have a very positive impact on universal service and specialist scientific knowledge in the Northern Cape.

A team from Primedia Broadcasting then presented their concerns. Particular mention was made of the need for an independent regulator, and concern was expressed about the Minister’s role in the allocation of radio frequency. The proposal that broadcasters be required to contribute to the Universal Service Fund (USF) was questioned, and the delegates pointed out that the broadcasting sector had not been identified as a beneficiary under the Fund.

The Committee expressed concern about possible negative implications of the SKA on the Northern Cape, and that the need for a radio quiet zone and limited radio frequency interference might lead to a reduction in communications services to the area. The SKA scientists emphasised that the bid would in fact have a positive impact, particularly on the provision of landlines to the area.

The Committee and the Department emphasised the role of the Minister as South Africa’s representative, in the supervision of the band plan.

MINUTES

Hartrao submission
Dr B Fanaroff (SKA Project Manager) put the South African bid for the Square Kilometre Array (SKA) telescope in context. In essence, the radio frequency of the area identified for the SKA required protection, and provision was needed for the extremely wide bandwidth required for such an array. The attached presentation contains the detailed scientific rationale behind the submission.

Primedia submission
Mr D Moyane (Executive Chairperson, Primedia Broadcasting) expressed concern that this was not a true Convergence Bill, as there was no convergence of the services of telecommunications and broadcasting. One of the anomalies of the Bill was the disappearance of Sentech’s common carrier status.

Ms P Gwangwa (Former Regulatory Affairs Manager, Primedia Broadcasting) expressed particular concern at the perceived infringement on the regulatory independence of ICASA, and the regulatory vacuum left by omissions from the IBA and Broadcasting Acts, particularly those relating to commercial and community broadcasters. The period allowed for licence conversion was too short, and did not allow for ICASA’s capacity. As a contributor to the MDDA, Primedia felt strongly that broadcasters should not be required to contribute to the Universal Service Fund (USF), as it appeared to benefit particularly telecommunications.

Ms K Mochaba (Group Regulatory Affairs Manager, Primedia Broadcasting) stressed that the proposed licensing framework was not workable, and emphasised the need for application services (such as WAPS) to be excluded from licensing.

Mr Moyane concurred with the ICASA submission in terms of local content, and stressed the need to consider the Convergence Bill and the ICASA Amendment Bill concurrently. It was vital to boost confidence and increase stability in the sector.

Discussion
Ms D Smuts (DA) requested clarity on the lack of reference to television licence fees, and asked whether there was an intention to continue to levy licence fees or not. Licenses were preferable to public funding.

Mr J Mjwara (Deputy Director General: Multi-Media: Department of Communications) replied that the Department was looking for options to allow an effective way of collecting public contributions. A costs benefit analysis had to be done on the options, before a decision could be taken on the way ahead, and the Bill reflected this uncertainty. It would be preferable to have the sections dealing with television licence fees retained.

Ms Smuts reiterated her view that the Convergence Bill should reflect the two systems of frequency planning, namely frequency allocation and assignment. The assignment process should be dealt with in a separate clause and should be under the control of the regulator, with the exception of the security services. The Department had suggested that the ITU process was well understood and settled, and that it was thus not necessary to refer to it. If this was the case, why was it a problem to refer to the allocation system? In respect of assignment, why was it necessary for band plans to go to the Minister for approval, as there had been too many delays in the past? Clause 34(13) stopped the regulator from ‘migrating’ government institutions, and this was incorrect, as ICASA should be in charge of the whole process, apart from the security forces.

Ms Smuts noted that it seemed an excellent idea that the Bill should refer explicitly to radio astronomy.

Mr K Khumalo (ANC) suggested that radio astronomy was included in the Bill, although there was no explicit reference to it.

Ms Smuts expressed concerned that the Hartrao proposals might rob people of cell phone services as well, and asked for clarity on the rollout of landlines as a result of the project.

Mr R Pieterse (ANC) asked how the Hartrao proposal would affect the closing of the digital divide. If the project was successful, there would surely be a convergence of people, and how would this affect the project?

Mr G Oliphant (ANC) remarked that the AGAP seemed to be good for the province and the country, but asked what would have to be given up for it. Would cell phones not be welcome in the area? How would it impact on the residents, and what would its impact be on the environment and other economic activities, such as diamond digging?

Dr Fanaroff replied that there were two stages to the SKA process. The KAT was in the design phase, and construction would start on the SKA in approximately 2014 for completion in 2019. If one looked at Sutherland, property prices and tourism had increased. The Northern Cape government had developed a tourism strategy, and it was agreed that areas should be developed economically, but in a way compatible with the technology bringing people to the area. Information had been obtained on the minerals in the area, and it had been established that there were no economically valuable minerals in the area. Ecotourism and astronomical tourism would be developed, with Sutherland. This would exclude golf driving ranges! If television and radio moved digital, there would not be much of a problem, as this could be cut out. Cell phone towers would also not be a problem, provided they were not too powerful.

Professor J Jonas (SKA Project Scientist) noted that there would be an impact on universal service, but not negation. The tradition with radio astronomy around the world was that they operated in a co-ordination zone, which involved a consultation process on radio frequency zones. Broadcast signal can be tailored, for example, and cell phone networks were already doing this. It was, in fact, envisaged that there would be a net increase in people’s connectivity in the Northern Cape. The network required even that the KAT telescope be the largest communication network in the world. There were dedicated bands defined by the ITU for radio astronomy. The SKA and KAT required to work outside these bands, and thus required some local regulation.

Mr Khumalo asked whether South Africa charged for the use of the SALT telescope. Dr Fanaroff replied that people had traditionally note paid for use of the telescopes, but that both the KAT and SALT telescopes worked in a slightly different way. Just over half the funding for SALT had come from the government and the rest from a consortium of universities, who had effectively bought time on it. The same strategy was being developed for the KAT. This had benefits for the country because contracts included a provision that South Africans had to be included on any team using the telescope for research.

Mr Khumalo noted that both Namibia and the Northern Cape had excellent landscapes for the purposes of radio astronomy. The submission had suggested that spectrum management might disadvantage the SKA bid. Did this refer to the individual allocation of spectrum? This should be checked with ICASA, as almost R10 million had been allocated for the bid process.

Dr Fanaroff noted that the SKA had an excellent relationship with ICASA, and held monthly meetings regarding issues related to the SKA. Reference to radio astronomy was now included in the band plan and it thus had a level of protection. The ITU historically protected a narrow bandwidth. The SKA was now going across the whole frequency spectrum, from about 70MHz to 25GHz. Geographical protection was now sought. The site chosen for the KAT was a valley like Hartebeeshoek. In terms of the bid document, radio frequency interference had to be measured for a year, and ICASA had provided people to assist with this. ICASA personnel were also being trained on very sensitive equipment, and there was assistance with transmission databases. In relation to the stabilisation of the regulatory system, as the ITU process was understood, there was a national allocation and then geographical allocation, and it was important to ensure that this took place. The definition of the radio quiet zone was still being worked out, but some transmissions would b allowed.

Mr Khumalo noted that Hartrao had requested more bandwidth, and that this be discounted, and asked how this would be resolved.

Dr Fanaroff replied that provision had been made for special rates for educational bandwidth for schools. People were using "virtual observatories", but the information comprised huge amounts of data, so very broad bandwidth was required.

Professor Jonas explained that Hartrao was quite isolated, and had a telephone line connecting to the outside world. Fibre optic cables were required, and were in the process of being installed. It was important to realise that in Europe, the national research networks had formed a consortium giving free bandwidth to academic researchers, who in fact were paid to use it. This was essential for high tech research, and was supported by the Department of Science and Technology.

Mr Oliphant noted the shortage of skills in astrophysics and geophysics, and asked whether there was a programme to deal with this. The presenter had referred to promises made to the people of the province.

Dr Fanaroff replied that discussions had been held with the Northern Cape government, and two important areas had been identified. The Department of Science and Technology and the NRF had created bursary programmes for the project. A number of people were already on bursaries for MSc and PhD studies. Neighbouring states were also being called upon. Some applicants would be sent overseas, and some overseas expertise would be brought in. The Northern Cape was developing tertiary institutions in Upington and Kimberley, and it would make sense to have astronomy as a special interest in the region.

Professor Jonas concurred, and noted that there was a National Astrophysics and Space Science Programme, a venture of a number of universities and government bodies, to jointly give honours and masters courses, with the express outcome of producing African astronomers and space scientists.

Mr Oliphant asked whether the SKA’s running on 4TBs complemented ADSL, or whether it was something that could come back as a problem.

Dr Fanaroff replied that the network for the KAT would be fairly small, but would need about 350GB to 1TB to get to Cape Town. The team was now working with Telkom and the Second National Operator (SNO) to see how they could design a network, as it appeared that it would not be economical for them to have a network just for the KAT at those speeds. Thus there would have to be a private network linked to leased lines. The private network would have to be licensed by ICASA, but not for commercial purposes. Leased lines would also have to be upgraded and that would benefit the whole area. The East Coast cable would be crucial to get information to Kenya and Madagascar, and a very large bandwidth would be available. This might be an incentive to upgrade the whole communication network.

Mr Mjwara suggested that part of the SKA plans should address the communications needs of people in the area. This was a national project, but there had to be national plans. Digital television costs should be integrated into the SKA plan, for example. There needed to be a national discussion about balancing the needs of the SKA against the public interest. The plan would have to be funded. Migration to assist the SKA would be possible, with such a national plan. This year, approximately R1 billion had been allocated to migrate the security forces, and people could not be migrated without consultation. It was a question of wording, but the principles were excellent.

Dr Fanaroff expressed concern at the probably sum of money available for migration, and noted that it was a question of a balance of public interests. He invited the Department of Communications to join the SKA steering committee.

Mr Khumalo asked why Primedia had proposed extending the period for conversion of licenses in terms of Clause 85.

Mr Moyane replied that ICASA should be given the opportunity to determine the time required. 90 days might be too short, as the implications of the change might require more than 90 days. ICASA should be allowed to determine the period, as they knew their own capacity.

Mr Khumalo asked whether Primedia was suggesting that broadcasters should not contribute to the USF at all.

Mr Moyane replied that Primedia had committed R6 million to the Media Development and Diversity Agency (MDDA) over the next five years. It would amount to double taxation if they were required to contribute to the USF as well. The USF benefited telecoms and their other competitors. If there was no MDDA contribution, the merits and demerits of a USF contribution could be debated.

Mr Khumalo asked what the option should be, since the contribution to the MDDA was virtually optional, and contributors decided on the amount that should be given. There were clear regulatory prescriptions for the USF, informed by total revenue. It would be important to establish the proportion of revenue contributed to the MDDA. In addition, given the fact of a converged regulatory environment, it would surely be desirable to have a converged fund.

Mr Moyane concurred that the MDDA contribution was voluntary, and that there was a time limit to it. As a broadcaster, Primedia saw this as a contribution to the sector. If there were a move to a converged industry, and a converged fund, there would be no problem to discuss it. It would be preferable to have it more clearly defined in the Convergence Bill, particularly in respect of the USF beneficiaries. The MDDA contribution was structured differently, but going forward, the suggestion of a converged fund would be supported.

Mr Oliphant noted that Primedia had raised the issue of forum shopping between ICASA and the Competition Commission, and asked whether they had any suggestions. They had appeared to recommend that the duty be delegated to ICASA, but problems had been raised in respect of ICASA capacity.

Mr Moyane concurred that ICASA capacity could be better, and that more funds were needed. They should be allowed to keep a large portion or all of the license fees collected, and report to Parliament on spending. If ICASA was able to retain the license fees, it could improve its capacity further. In terms of forum shopping, there would be a tendency to look for the "best deal". The Competition Commission should deal with competition issues, and this should be made clear in the definitions.

Mr Oliphant noted that Primedia had indicated that the period for written submissions was too short, and asked what they would have recommended.

The Chairperson noted that the invitation had been published when people were breaking for a holiday, and that the argument would not hold, as people had been allowed to come before the Committee later.

Mr Moyane replied that there was usually a long process of discussion, and that submissions were traditionally called for within 60 days. This time, there had only been a period of 30 days.

Mr Khumalo referred to the submission that the Bill was not consistent with Section 192 of the Constitution. South Africa, through the Minister, was a member of the ITU, and hence the Minister was accountable to the ITU on compliance with radio frequency spectrum issues. According to the Bill, the Minister was obliged to ensure that there was a frequency plan, and delegated the responsibility to ICASA, for approval by the Minister. In terms of the implementation of the plan, the independence of the regulator was not threatened.

Ms Gwangwa acknowledged and agreed that it was the Minister’s role and function to report to the ITU. Insofar as the part of the radio frequency spectrum relating to communications services was concerned, if ICASA was an independent administrator, it was felt that it should be ICASA that designed and finalised the frequency plan.

The Chairperson emphasised that the Minister had to approve a national plan. The assignment to operators was the function of the regulator.

Ms Gwangwa suggested that ICASA’s role was not just to have a finalised plan, but that the regulator should also be able to determine the amount to be assigned to the various communications services.

Ms Smuts noted that radio allocation went to the heart of the independence debate, and therefore there was a Constitutional dimension.

The Chairperson emphasised that there were three levels, and that the middle was where the Minister had to satisfy herself that the national plan was in place.

Ms Gwangwa reiterated that ICASA should be the regulator and designer for all communications services.

Mr Mjwara noted that South Africa was bound by the ITU plans, but these had to be ratified by the Minister who would then take the bands to ICASA. Even what was given by the ITU could be modified to protect interests, such as the SKA.

The Chairperson noted that ICASA would revert to the Committee the following week on its discussions with the Competition Commission.

The meeting was adjourned.