Convergence Bill: deliberations

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
7 September 2005
CONVERGENCE BILL: DELIBERATIONS

Chairperson:

ANC Proposed Amendments on Chapter 1
ANC Amendments to Clauses 2 & 3 (up to Clause 9)
ANC proposed amendments: Chapters 3 (Clause 10 -19)
ANC Proposed Amendments to Chapter 4: Clauses 20-29
ANC proposed amendments: Chapters 5 - 8
ANC Proposed Amendments of Chapters 9 to 12 (as of 7 September)
ANC Proposed Amendments to Chapter 12 - 14 (as of 9 September)
ANC Proposed Amendments to Chapter 15: Transitional provisions
Convergence Bill [B9-2005]

SUMMARY
In the morning session, the Committee discussed the Clauses 47 to 59 of the Convergence Bill. Most insertions proposed by the ANC in Chapter 9 had either been extracted from the Independent Broadcasting Authority (IBA) Act or the Broadcasting Act.

The Committee discussed the practicality of Clause 49 that required that community broadcasting services be non-profit and represent a specific community. Members examined whether community broadcasting services should be dealt with as class or through individual licences, or whether additional considerations were necessary. There was no agreement whether political office bearers should be excluded from serving on the board of public, commercial and community broadcasting in terms of Clause 51 (the previous Clause 49).

The ANC felt that Clauses 50(d) and (f) should be amended because they were exclusionary and limiting with respect to the previously disadvantaged sectors of the public. MultiChoice proposed to define different categories of broadcasters to whom Clause 52(1) would apply, because physical recording was not always possible. The SABC expressed concern about Clause 59(1), stressing that it was crucial that subscription broadcasters not determine the terms through which the public and other free-to-air broadcasters acquired the rights to national sporting events.

In the afternoon session, the DA supported ETV’s proposal that Clause 60(2) not stipulate that the guidelines on independently produced content would be contained in the Code of Conduct, as the Code dealt essentially with content-related issues. The Department however believed it should be included in the Code so that it could become a standard document that would be applicable to all broadcasters. The DA agreed with the SABC concern that Clause 61 confused the distinction between broadcasting and broadcasting signal distribution, and should thus be deleted. Both the Department and the ANC failed to see the confusion and proposed its retention. Sentech raised concern with Clause 62 which allowed the SABC to remove Sentech’s common-carrier status and, if that was the case, then Clause 61 would allow Sentech to provide broadcasting content.

The ANC proposed the elevation of competition matters to a stand alone Chapter 10, as well as numbering issues to a stand alone Chapter 11. The most important issue in Chapter 11 was its requirement that the numbering plan be introduced by the end of 2005. The ANC noted that Chapter 12 on consumer issues would not be enforceable without the ICASA regulations, and expressed concern with the fact that the mobile operators had not yet honoured the commitment they made to the Committee in 2001 that the practice of unlocking of cellular telephones amongst the operators would be resolved. ICASA indicated that it was about to formulate a regulation that would make the locking of handsets illegal. The DA questioned whether ICASA could imprison violators of Clause 72, and the Department indicated that the provision stipulated that the person could be imprisoned only after the matter had been submitted to court. The ANC required Clause 73 to stipulate that the 1023, 10111 and 112 numbers would be provided free of charge to the public.

MINUTES

Chapter 9: Broadcasting services
Ms L Yengeni (ANC) said that most insertions proposed by the ANC in Chapter 9 had either been extracted from the Independent Broadcasting Authority (IBA) Act or the Broadcasting Act.

Ms Smuts (DA) urged Members not to amend the clauses that had been extracted from the IBA and Broadcasting Act. Those clauses worked and were well understood, specifically the section relating to elections. The broadcasting service objectives as outlined in Clause 61 (the previous Clause 58) and the Application of the Act as outlined in Clause 62 (the previous Clause 59) were an exception and should be subject to amendment.

Ms Yengeni remarked that the ANC would consider rewording some of the clauses that had been extracted from the IBA and Broadcasting Act.

Clause 47: Application
Ms Yengeni presented the document that contained ANC’s proposed amendments for Clauses 47 to 59. Due to previous amendments, Chapter 9 started with Clause 47, and not like previously with Clause 48.

Clause 48: Public Broadcasting service licences
The inserted Clause 48 would read as follows: "In considering the grant of a new public broadcasting service licence the Authority must, with due regard to the objects and principles enunciated in section 2, inter alia, take into account a) the demand for the proposed broadcasting service within the proposed licensed area; b) the need for the proposed broadcasting service within such area, having regard for broadcasting services already existing therein; and c) the technical quality of the proposed broadcasting service in regard to developments in broadcasting technology".

Clause 49: Community broadcasting service licences
Clause 49 would read as follows: "In considering the grant of a new community broadcasting service licence the Authority must, with due regard to the objects and principles enunciated in section 2, inter alia, take into account a) whether the applicant is fully controlled by a non-profit entity and carried on or is to be carried on for non-profitable purposes; b) whether the applicant intends to serve the interests of the relevant community; c) whether, as regards the provision of the proposed broadcasting service, the applicant has the support of the relevant community or of those associated with or promoting the interest of such community, which supports shall be measured according to such criteria as shall be prescribed; d) whether the applicant intends to encourage members of the relevant community or those associated with or promoting the interests of such community to participate in the selection and provision of programmes to be broadcast in the course of such broadcasting service; and e) whether the applicant has ever been convicted of an offence in terms of this Act or related legislation".

Ms Smuts remarked that it was essential to align these clauses with the rewritten Chapter 3 of the Convergence Bill with respect to individual and class licences. Community broadcasting service licences would be dealt with as class licences because they were low power stations. She asked whether Clause 49 described the criteria that applied for class licences relating to community services. Currently community broadcasting services were necessarily non-profit and had to represent a specific community. She asked whether the Committee was convinced by this approach. She further queried about the community of interest and the geographic community category.

The previous day, Ms Smuts had received a letter of complaint from a small station in the North West province describing a horrendous situation. The board of that particular station had been taken over by leading local personalities from a certain organisation. She wondered whether it was practical that community broadcasters had to install leading figures from the community, and whether the Committee should consider other models as well.

Ms Yengeni asked Ms Smuts to present the mentioned letter of complaints to the Committee in order to get more information about the incident. It would be interesting to know which sector of the community was complaining. Ms Smuts agreed to give the letter to the Members, however asked to keep the relevant names anonymous.

Ms Smuts stated that the community broadcasting sector had been neglected. The Committee had to examine how well this sector was functioning presently.

The Chairperson said it was crucial to ensure that the people running the station had been elected in a correct and fair manner. Complaints in a community could not be avoided.

Mr Khumalo remarked that communities of interests addressed the needs of the youth, women or disabled people, for instance. The relevant community was the one that the licence had been issued to. Problems arising in stations were in the majority internal. He felt that the present model was correct.

Ms L Shope-Mafole, Director-General: Communications, said that according to the Broadcasting Act, community included a geographically founded community or any other group of persons or sector of the public having a specific, ascertainable common interest. This definition would be retained in the Convergence Bill.

She then stated that both national and international experiences had shown that the community broadcasting sector could be problematic, particularly politically. Community broadcasting service licences thus required additional considerations. More control was needed in the community broadcasting sector because it was a free-to-air service that could, for instance, impact on radio navigation. She proposed to have either a less stringent provision under individual class licences, or a more stringent provision under class licences.

Mr J Mjwara, Deputy Director-General: Multimedia, commented that class licences required a simpler registration process than community broadcasting services.

Ms Smuts asked whether it was not the intention to make the registration for low power stations as simple as possible. Small stations had been disadvantaged most. Elections were not intrinsic to running a station. People who were talented for broadcasting could probably not be found through elections. She queried why they should not create an opportunity for talented people or non-governmental organisations (NGOs) to broadcast.

She expressed concern that the vast majority of community broadcasting service licences had been given to geographic communities. The popular religious sector had to be considered as well.

The Chairperson asked how it could be ensured that a radio station represented the interests of a particular community. He suggested finding criteria for individuals that should not be eligible for being part of the board that run a station, for instance Members of Parliament or Premiers. Political interference should be avoided. Stations were run for different reasons.

Mr Mjwara stressed that the right to broadcast was not granted to individuals. Clause 49 had been created in order to enable communities to participate as a category of broadcasting. Individuals could apply for commercial broadcasting licences.

Mr R Pieterse (ANC) remarked that the model had worked well to date. It was problematic to exclude people. Members of Parliament, for instance, were also members of the community. Exclusion could also prevent individuals from bringing their skills to the station.

Mr Khumalo said that it was difficult to distinguish between a geographic community and a community of interest, as the two categories were intertwined. The ANC would support religious groups and communities that intended to engage in community broadcasting services. It was difficult for the Independent Communications Authority of South Africa (ICASA) to decide to whom a licence should be granted. Geographic communities had to be balanced against communities of interest.

Mr G Oliphant (ANC) felt that the application procedure for community broadcasting was not cumbersome, but clear and straightforward. A regulatory regime was necessary. The prohibition of granting broadcasting service licences to party-political entities would be dealt with in Clause 51.

Ms Smuts asked Members to consider the impact of digitising on licensing. As a consequence of digitising, there would no longer be a scarcity of frequencies. Hence, community of interests, geographic and religious communities would not have to compete against each other anymore. Taking this into account, community broadcasting services would be a perfect category for class licenses. If – according to the ANC – there should be additional criteria for community broadcasting, then a mechanism had to be found to measure these criteria easily. The regulator could, for instance, ask for proof of the minutes of the election procedure.

Mr L Mtimde, ICASA Councillor, said that the current model had been working without any problems. ICASA considered applications administratively, and did no longer have to hold hearings for every application. The latter was only necessary when there were competing applicants for one frequency, for instance. Low power stations would obtain licences in a very simple way and without hearings.

Clause 50: Commercial broadcasting licences
Clause 50 would read as follows: "In considering the grant of a new commercial broadcasting service licence the Authority must, with due regard to the objects and principles enunciated in section 2, inter alia, take into account a) the demand for the proposed broadcasting service within the proposed licence area; b) the need for the proposed broadcasting service within such licence area, having regard to the broadcasting services already existing therein; c) the expected technical quality of the proposed broadcasting service, having regard for developments in broadcasting technology; d) the capability, expertise and experience of the applicant; e) the financial means and business records of the applicant; f) the business record of persons in a position to control the operations of the licensee, either in an individual capacity or directly or indirectly in relation to management or corporate structure; g) the applicant’s record, and the record of those persons referred to subsection (f), in relation to situations requiring trust and candour; h) whether the applicant is precluded, in terms of section 63 from holding a broadcasting service licence; and (i) whether either the applicant or persons referred to subsection (f) have ever been convicted of an offence in terms of this Act or related legislation".

Ms Smuts asked whether commercial broadcasting licences would be dealt with as individual licences if the communication networks were of national or provincial scope. The Committee’s new approach regarding the differentiation between class and individual licences in Chapter 3 had to be taken into account. She asked whether commercial broadcasting licensees would be able to apply under a class licence regime. Preferably, this would foster diversity and increase the number of small commercial stations.

Ms Yengeni stressed that the ANC was concerned about Clauses 50(d) and (f), as they could be subject to misinterpretation. They would thus consult the state law adviser to propose an amendment.

Mr Oliphant added that the Clauses 50(d) and (f) were exclusionary and limiting with regard to previously disadvantaged people. It was crucial to enhance skills, build capacity, and facilitate new entries in this sector. The ANC proposed an amendment of these clauses due to these reasons.

Clause 51: Prohibition on granting of broadcasting service licences to party-political entities
Ms Smuts felt that political office bearers should be prohibited from holding board seats as directors of public, commercial and community broadcasting.

The Chairperson asked whether the Convergence Bill contained a provision that prohibited political office bearers form obtaining a broadcasting licence. Ms Smuts replied that Clause 51 only excluded political parties.

Mr Khumalo was opposed to Ms Smuts’ proposal to exclude political office bearers.

The Chairperson agreed that people from the lowest level of a political organisation should not be excluded. Other political office bearers, however, could be exempted.

Mr L Mtimde said that ICASA had prohibited political office bearers from being leaders of community broadcasting stations in terms of Clause 51 to date.

Mr S Kholwane (ANC) felt that it was not necessary to amend Clause 51.

Ms Smuts reiterated that ICASA had excluded office bearers of political parties from serving on the boards of community broadcasting stations. What she had suggested earlier was thus not something new but already the practice. Therefore, the amendment of Clause 51 would only be a matter of emphasis. She proposed to exclude holders of political public office.

Ms Shope-Mafole recommended not amending Clause 51. There was no provision in the IBA Act that had obliged ICASA to exclude political office bearers. The political situation in 1994 had been very expulsive, and this had been the reason for that practice. Clause 51 would allow more flexibility if it was not amended. The growth of the community broadcasting services sector in South Africa was essential. There was a difference between public representatives and office bearers of political parties, as the former had been elected. The two categories should thus not be dealt with in the same way. ICASA had to consider that political office bearers did not necessarily coincide with members of the community.

Mr M Mohlaloga (ANC) expressed concern about the regulations of ICACA which excluded political office bearers from community broadcasting services. He proposed to keep Clause 51 unchanged.

Clause 52: Record of programmes broadcast by broadcasting service licensees
The ANC proposed to change the period during which a recording of every programme broadcast had to be retained from 30 to 60 days.

Ms Smuts commented that MultiChoice and MNet had suggested that the Regulator could prescribe categories of broadcasters to whom Clause 52(1) (a) would not apply.

Ms C Mack, MIH Group Executive: Policy and Regulatory Affairs, explained that the reason for MultiChoice’s proposal was that no physical recording was possible for live uplinks to other broadcasters. MultiChoice needed the channel’s permission to retain their content. With respect to international channels, a physical intercession would have to be created. Currently, they were not allowed to store the content of international channels such as the CNN.

Ms Shope-Mafole said that communications, particularly broadcasting, were significance for peace and stability. Messages were sometimes sent in a codified manner. She felt that Clause 52 was an important provision.

Ms Smuts stressed that the Intelligence Agency had to tackle security problems such as codified messages. Intelligence Agencies should not have to wait for broadcasters to give them copies of certain videos. The security argument was not persuasive.

Mr Oliphant suggested that at least during 60 days, the programmes should have to be accessible. Reasonableness was required with regard to this clause. The new regulations had to take into account converged conditions.

Mr Mjwara felt that it was unproblematic to keep the recording of programme broadcast because MultiChoice did not reproduce the programmes of international channels for commercial gain, but retained them for purposes of regulation. The need to keep these programmes due to security reasons was increasing.

Ms Mack explained that MultiChoice could source the programme and make it available in terms of Clause 52(1) (b). However, whether they could record the programme depended on the contract with the relevant channel. They were currently prohibited from recording these programmes.

Mr Khumalo felt that the Committee had to examine this matter further. The recording of all programmes seemed to be a difficult and cumbersome process. Members could consider accommodating multi channel broadcasters under Clause 52.

Ms Shope-Mafole suggested that Clause 52 only obliged broadcasting service licensees to provide the recording, without having to record the programme.

Ms J White, Mukwevho Mkhabela Adekeye Inc Attorney, stressed that all broadcasters should be treated alike. SABC was not opposed to MultiChoice’s proposal.

The Chairperson highlighted that when the relevant authorities wanted to view the recording, all broadcasters would have to be able to oblige.

Clause 53: Code of conduct for broadcasting service licensees
Ms Smuts proposed to delete "as soon as reasonably possible after the coming into effect of this Act" in Clause 53(1), as it implied that the Regulator would have to write down a new code of conduct. This was surely not the intention, as the present code of conduct was functional and well understood.

Clause 54: Control over advertisement
Ms Yengeni said that the reference to sections 17H to 17N of the ICASA Act would be deleted in the Clauses 54(2) and (3).

Ms Smuts asked whether the Convergence Bill would refer to the proper sections of the ICASA Act after the latter would have been tabled. The Chairperson answered in the affirmative.

Clause 55: Prohibition on broadcasting of party election broadcasts and political advertisements except in certain circumstances
Ms Yengeni commented that the reference to "sections 54 and 55" would be substituted for "sections 53 and 54" in Clause 55.

Clause 58: Equitable treatment of political parties by broadcasting licensees during election period
Ms Yengeni remarked that in Clause 58(4), the reference to sections 54 and 55 would be replaced with sections 53 and 54 accordingly.

Clause 59: Restriction on subscription broadcasting services
Ms Yengeni said that in Clause 59(1), "for" was substituted for "that prevent", and "free-to-air" was inserted before "broadcasting". Further, "in consultation" was replaced with "after consultation", and "and the Minister" inserted after "Minister".

The inserted Clause 59(2) read as follows: "The Authority must prescribe regulations regarding the extent to which subscription broadcast services must carry, subject to commercially negotiable terms, the television programmes provided by a public broadcast service licensee".

Clause 59(3) was also newly inserted and read as follows: "Subscription broadcasting services may draw their revenues from subscriptions, advertising and sponsorships, however, in no event may advertising or sponsorship, or a combination thereof, be the largest source of annual revenue".

In Clause 59(4), "A subscription" was substituted for "Subscription" at the beginning of the sentence. In addition, "content in terms of regulations" was deleted, and "programming as" inserted instead.

Ms Smuts agreed with the amended Clause 59(1). She was opposed to Clause 59(3), as this provision did not seem to serve the interest of the consumer but that of the competing broadcasters. As a consequence, DSTV subscription was very high, for instance. The subscription broadcasting services should be allowed to draw far more revenues from adverts.

Mr Oliphant felt that Clause 59(3) was balancing different interests. Control was needed with regard to revenues of subscription broadcasting services.

Ms Smuts said that more people could subscribe to DSTV if the price dropped.

Mr Pieterse asked for more information on broadcasting rights that had been taken out of the country and had to be bought back, particularly regarding national sporting events. In terms of Clause 59(4), the latter was not necessarily regarded as local content even though national sporting events were the core business.

Ms White stressed that SABC was extremely concerned about Clause 59(1). It had to be ensured that subscription broadcasters did not determine the terms on which the public and other free-to-air broadcasters acquire rights to national sporting events. Currently, there was less sports of national interest being broadcasted on free-to-air broadcasters than had been under the previous industry agreement-plan. This had not been the intention of the Convergence Bill.

SABC thus proposed to amend Clause 59(1) as follows: "Subscription broadcasting services may acquire exclusive rights for the broadcasting of national sporting events only for the broadcast thereof of subscription services". This would make clear that subscription broadcasting could acquire exclusive rights, but only for the broadcast of subscription services and not for the totality of the exclusive rights which cut off free-to-air broadcasters from having access to national sporting events.

Mr Oliphant remarked that the Committee would consider the SABC’s proposal. However, their provision also seemed to be liming for the public.

Mr Pieterse asked who would be allowed to broadcast national sporting events under the present Clause 59(1).

Ms Smuts said that the fact that sports had been commercialised could not be changed. According to SABC, the regulations for the broadcast of national sporting events would allow subscription broadcasters to acquire those rights provided they were offered on a sublicensing basis to a free-to-air broadcaster. The assumption was that sublicensing was commercial. SABC requested penalties for the failure to sublicense. She wondered whether SABC expected that the right to broadcast national sporting events would be given for free. As many South Africans as possible should have access to events that were of national interest. Sublicensing seemed to be the way forward. She felt that a commercial basis was fair.

Mr Khumalo wondered whether the Committee should include public broadcasters in Clause 59(1), as it only included free-to-air broadcasters presently. It was difficult for ICASA to define national sporting events. He asked for more information on the subscription fees with regard to Clause 59(4).

The Chairperson answered with regard to the latter that subscription was their core business. He requested SABC to further demonstrate the adverse effects of Clause 59(1).

Ms L Kantor, SABC General Manager: Policy and Regulatory Affairs, said that SABC’s intention was not to be sublicensed on a nominal or free basis. Instead, they would prefer negotiating with the rights holders directly. The reason for that related to the price and the conditions that were put on SABC.

Ms Smuts asked what stopped SABC from doing that. Ms Kantor answered that subscription broadcasters were able to purchase those rights exclusively according to the current interpretation of the law. Subscription broadcasters should not compete for free-to-air rights. ICASA felt that it was alright to purchase the rights exclusively as long as those rights were sublicensed. SABC disagreed with ICASA in this regard. The terms of the sublicensing agreements were not adequate.

Mr Mjwara queried whether the present Clause 59(1) did not address the SABC’s concern. It was crucial to distinguish between subscription and the free-to-air rights. This was a structural problem. Free-to-air broadcasters should not be prevented from broadcasting national sporting events.

Mr Pieterse said that this did not necessarily include live broadcasts. The Chairperson agreed.

Ms Smuts remarked that it had to be taken into account that the price that the sublicense paid was comparatively modest.

Ms Kantor pointed out that it was more difficult for the SABC to broadcast certain national sporting events under the new regime, particularly rugby. Free-to-air broadcasters should be allowed to compete for those sporting events that were of national importance. The problem was that the word "prevent" in Clause 59(1) may not address the sublicensing issue. The SABC aimed to make these events broadly accessible in South Africa.

Ms Shope-Mafole commented that this issue needed further attention. She proposed to consider the SABC’s proposal in Clause 59(1) that would prevent subscription broadcasters from buying exclusive free-to-air rights, but to include that this would only apply where possible. This provision would then take into account the structural issues, which was an exception.

Afternoon session
CHAPTER 9: BROADCASTING SERVICES
Clause 59: Restriction on subscription broadcasting services
ETV stated that he wished to clear up some confusion and stated that ETV did not in fact share the SABC view on Clause 59(1).

Clause 60: Preservation of South African programming
Ms L Yengeni (ANC) read out the proposed clause, which was a new insertion.

Ms M Smuts (DA) sought clarity on the word "therein" in Clause 60(4), as it was not clear what it was referring to.

Secondly, she asked whether the reference to "categories" in 60(6)(a) now repealed Section 5 of the Broadcasting Act, which she would welcome.

Clause 61: Broadcasting service objectives
Ms Yengeni stated this was the old Clause 58, and no amendments were affected to this clause.

Ms Smuts stated that this clause made no sense because it imposed content obligations on a signal distribution network. She proposed its deletion from the Bill.

Ms L Shope-Mafole, Department Director-General, replied that she did not understand the concern Ms Smuts’ concern because it stipulated that were the communications service licensee provided broadcasting signal distribution, the provision would apply.

Mr K Khumalo (ANC) stated that the clause, as it currently stood, was very clear to the ANC.

Ms Smuts stated that the SABC submission indicated that the clause confused the distinction between broadcasting and broadcasting signal distribution. She asked the SABC representative to clarify its view on the matter.

The Director-General stated that she was still not sure where the confusion arose with regard to this clause. It simply stated that just as it was required of those who produced the content, it was also required from those who distributed the content in their choosing to be South African, to provide a universal service, diversity of broadcasting services, to deliver public services and to be open, interoperable and harmonised with the South African region. All these related to the facilitation of the transportation of "what would have been cooked as South African, etc". She reiterated that the provision applied to the transportation of content alone.

Ms Justine White, Mukwevho Mkhabela Adekeye Inc Attorneys representing the SABC, stated that the confusion arose primarily from the formulation of the provision, which could be overcome by amending the wording. She stated that she understood the Director-General’s point that the provision aimed to ensure diversity in the carriage of the content, but the current wording confused that by implying that the signal distributor would provide broadcasting content.

Mr M Mohlalonga (ANC) proposed that a broader discussion was needed on the issue.

Mr G Oliphant (ANC) stated that this was not a "train smash" as SABC itself just indicated that this could be resolved by simply clarifying the wording of the provision, which could be done. ICASA would in any event be able to exercise oversight over the functions of the signal distributors.

Mr J Mjwara, Department Deputy Director-General: Multi-Media, stated that he too was not sure what the confusion was as it merely referred to types of broadcasting services.

The Director-General added that it was however important to include these conditions in the licence agreement of a broadcasting signal carrier to ensure that the diverse content was in fact distributed. Perhaps the replacement of the word "deliver" with "carry" in 61(d) would clarify matters.

Mr Mjwara stated that the Department would look into the aligning of this provision with the provisions that related to licensing.

ETV stated that 60(2) stipulated that the guidelines on independently produced conduct would be contained in the Code of Conduct, but that was not copied from the Independent Broadcasting Act as the Code of Conduct would not be the appropriate place to locate that provision. The Code of Conduct instead dealt essentially with content-related issues. He proposed that this provision be redrafted.

Mr Mjwara replied that the thought in 60(2) was that the guidelines and principles applicable to the solicitation of independently produced South African programming should be included in the Code of Conduct, which dealt with content issues, so that it could become a standard document that would be applicable to all broadcasters.

Ms Smuts contended that the same effect could be achieved by relocating this provision to the regulations, as was the case in all other situations save for this one. A Code of Conduct was a different instrument that did not address business practices, as it were.

Mr Oliphant stated that he failed to see the confusion. The Code of Conduct was discussed under Clause 53, and there should thus be no confusion.

ETV contended that there appeared to be a slight overlap between 60(1) and 60(4) as they both contemplated ICASA regulating local content and locally-produced programming. The provisions appeared to be conflating local content and locally produced programming.

Mr Oliphant responded that he did not interpret the two provisions to be duplications. Clause 60(4) referred to the regulations that could be imposed, whereas 60(1) referred to something else.

Mr Mjwara stated that 60(1) granted powers to ICASA to make regulations regarding the amount of independently-produced television and music to be provided. However 60(4) dealt with the quotas that would be imposed in exercising that power. He stated that 60(4) was thus merely a fleshing out of the power granted in 60(1). The two provisions should instead be read together as duplications.

The Director-General stated that she was very grateful that the matter was being raised. She maintained that it was necessary to retain the provision in its current location because, if one reduced the Code of Conduct to matters of governance, then someone who was very much interested in issues of local content but did not know that his objectives were protected against misconduct. The provision as it currently stood related to principles that were applicable to the solicitation of programmes, and the Department would be considering the broadening of this aspect beyond merely solicitation. She proposed the deletion of the phrase" and principles applicable to the solicitation of" and that it be replaced with "general guidelines dealing with matters related to South African programming" .

Ms Smuts argued that the example cited by the Director-General would in fact sit within the Code of Conduct, in the same way as ‘cheque book journalism’ would sit in the Code of Conduct, as those were transgressions.

Mr Oliphant contended that this clause merely strengthened clause 53(1), which stipulated that ICASA must produce regulations prescribing the Code of Conduct. It should not be stipulated in this provision as that would amount to doing the job allocated to ICASA.

Ms White stated that the Bill did not currently contain a definition of the term "independently produced South African music programming", probably because traditionally the concern around independently produced content had focused on television. Furthermore she suggested that 60(1) was already catered for in 60(4) and (5) and could thus perhaps be deleted completely.

Ms Smuts agreed with Ms White. She contended that the inclusion of term "independently produced South African music programming" was simply a mistake and it 60(1) should thus be deleted.

Mr Khumalo stated that he too did not understand the meaning of the phrase term "independently produced South African music programming" nor its relevance in the provision, as it dealt with the issue of production and programming. He contended that 60(3)(c) merely illustrated the various categories of music.

The Chair requested the drafters to relook the provision.

Clause 62: Self provision by broadcasting service licensees
Ms Yengeni read out the clause, which was a new insertion.

A representative from Sentech stated that Sentech’s understanding was that the existing broadcasting legislation allowed broadcasters to self-provide, but the only entity which could not self-provide was the SABC. Thus the new Clause 62 must aimed at the SABC, because all other broadcasters were legally allowed to self-provide. Sentech was thus of the view that at no material point did the SABC lodge any complaints about the signal distribution service provided by Sentech, not even in its written submission on the Bill. The new clause thus created a problem because, if the SABC were to self-provide, it meant that Sentech’s common-carrier status would fall away. Currently Section 8(g) of the Broadcasting Act stipulated that the SABC was only allowed to use the common carrier, and clause 62 was clearly in contravention of that section. He proposed instead that Clause 61 became relevant in allowing Sentech then to provide broadcasting content. This appeared to be the actual reason for the SABC’s objection to signal carriers dealing directly with broadcast content. He proposed that the matter be engaged in greater detail before finalised.

Mr Mjwara responded that Clause 62 merely recognised the rights of broadcasters to self-provide, and did not relate to the SABC at all. A clause of this nature was however needed to stipulate that broadcasters did in fact have te right to self-provide. Chapter 8 of the Broadcasting Act limited the SABC in this regard, and it was not repealed. Clause 62 might have to refer to that provision in order to clarify that that part of it was not being repealed.

Mr Oliphant contended that the Committee and the legislation would not becoming involved in turf wars between the various recognised entities. The Committee would be guided by public interest when passing this legislation. Furthermore, he noted that the bill contained no definition of the term "common carrier" and perhaps the Department could consider its possible inclusion in the Bill..

Mr Mjwara replied that in the first draft the Department believed this should be repealed, but it has since changed its view and was now of the opinion that the term "common carrier" should be reflected somewhere in the Bill.

Clause 63: Limitation on foreign control of commercial broadcasting services
Mr Yengeni read through the clause, which was a new insertion.

Clause 64: Limitation on control of commercial broadcasting services
Mr Yengeni read through the clause, which was a new insertion.

Clause 65: Limitations on cross-media control of commercial broadcasting services
Mr Yengeni read through the clause, which was a new insertion.
 

Mr Oliphant informed the Committee that most of the provisions of clauses 63, 64 and 65 were lifted from the broadcasting Act. Furthermore, ICASA was given the power to exempt the adherence of some of the subsections on good cause. They were thus not rigid provisions that required everyone to conform to every single requirement.

Ms Smuts asked whether the provisions reflected the recommendations from ICASA after its inquiry. Furthermore she asked whether it was also an ICASA recommendation that no-one may own more than 35% of all radio stations because, if so, it should be included in this these provisions on limitation on control.

The Chair assured Ms Smuts that these provisions were not related to the ICASA recommendations.

Mr Oliphant replied that the 35% figure was correct, and proposed its inclusion in the provisions.

Mr Khumalo proposed that the "14 day" period in Clause 64(8) was insufficient, and suggested a 30 day period. He stated that he was also mindful of the possibility that it might be incorrect to stipulate a time-frame in the Bill within which the Minister must act. Perhaps a time-frame should be deleted altogether.

Ms Smuts suggested that it would be a mistake not to include a time-frame, as it was the only way to ensure that the matter was in fact dealt with. She stated that she would reserve her views on the exact content of the various provision till a later stage of the proceedings.

Mr Mjwara agreed with Mr khumalo that the fourteen day period was too short.

Mr L Mtimde, ICASA Councillor, asked whether 65(7) and (8) meant that ICASA would have to conduct a new inquiry, or whether it referred to the inquiry that was conducted under the IBA Act which were then submitted to the Minister.

Mr Mjwara replied that 65(7) stipulated "whenever deemed necessary". There were also transitional provisions in the Bill which allowed for the continuation of work that had already begun before the Bill was introduced, and thus ICASA did not have to start from scratch.

The Chair asked whether 65(7) meant that ICASA would submit its recommendations to the Minister, who would then in turn merely submit it to Parliament. If that was the case then even a 24 hour period would be enough.

Mr Mjwara responded that even if ICASA made recommendations 65(7) was very specific in indicating that the Minister must still apply her mind to the recommendations.

The Chair stated that if that was the case then the ICASA recommendations could only be tabled to Parliament after ICASA and the party to which it was recommending had completed the task.

Mr Khumalo proposed that it was unreasonable to expect the Minister to table the recommendations in Parliament within 14 days, because Parliament could very well be in a three week recess at that point. He therefore substantiated for a 30 day period.

The Chair stated that there was no intention to include a 35% threshold in the legislation.

Mr Mtimde informed Members that the 35% was referred to in the ICASA recommendations, and the matter had already been clarified.

CHAPTER 10: COMPETITION MATTERS
Mr R Peterse (ANC) stated that the ANC proposed the moving of consumer issues, which were currently located in Chapter 10 of the Bill, to Chapter 12. The competition issues were elevated out of a single section to a dedicated chapter. The ANC was, unfortunately, not yet ready to deal with all the competition issues, and thus requested that the issue stand over until such time.

The Chair welcomed the presence of the Minister of Communications to the meeting. He agreed that the Chapter would stand over.

CHAPTER 11: NUMBERING
Clause 67: Numbering plans and number portability
Mr Pieterse stated that the ANC proposed the elevation of the current Clause 65 of the Bill, which related to numbering, to a stand-alone Chapter in the Bill. The new Chapter 11 mirrored the old Clause 65 exactly, and no changes were effected. An important aspect of the Chapter was the numbering plan, which sought to ensure the portability of cellular, fixed and electronic numbers. The most important issue in the Chapter was its requirement that the numbering plan be introduced by the end of 2005, which did not leave much time left. ICASA had been informed of the urgency of this number plan. The rights of consumers were enshrined and protected in 67(7(d), and they were provided with proper redress if they felt their interests were not adequately catered for. He questioned whether it was possible for electronic applications such as voice over Internet protocol (VOIP) to be included under 67(7)(e). He requested the Department to keep that in mind for discussion at a later date.

The Chair noted that no questions or objections were raised on this Chapter.

CHAPTER 12: CONSUMER ISSUES
Clause 68: Code of conduct and subscriber service charter
Ms N Mokoto (ANC) stated that this was the old Clause 60. It was important to note that this Chapter would not be enforceable on its own, unless it was linked to the ICASA regulations. The Chapter captured issues regarding disabilities which were not captured in the previous formulations, as well as the protection of consumers and the remedies that were at their disposal to address their complaints.

She stated that the ANC had identified the need to include a definition of the term "subscriber" to cover the end user and consumer, so that it did not remain vague in its application. This was also raised by submissions received during the public hearings. She proceeded to read through the ANC’s proposed reformulation of the Chapter.

Clause 69: People with disabilities
Ms Mokoto stated that this issue was not catered for in the tabled version of the Bill, and its inclusion sought to address the issues raised by some of the submissions during the public hearings.

Clause 70: Consumer Advisory Panel
She stated that this was initiated by ICASA, which proposal the ANC adopted and now included in the Bill.

Mr Pieterse stated that the mobile operators who made a commitment to this Committee in 2001 that the issue of unlocking of cellular telephones amongst the operators would be resolved, but they have not kept their word. At the moment it was not possible for a consumer to change from one operator to another whilst retaining the same phone and SIM card, despite the promises they made at that meeting.

Mr Maanda Manyatshe, MTN Managing Director, responded that he really did not believe that handset locking was an issue any longer as all the mobile operators ceased the practice about two years ago. Only a few presentation-paid phones remained, which cost about R250 to unlock when the practice was still prevalent. The hearings on handset subsidies which were held by ICASA a few months ago, and the mobile operators made it clear that the practice would be phased out soon. He did not thus believe it was a material issue that warranted any form of intervention.

The Cell C and Vodacom representatives agreed with MTN that the practice had ceased about two years ago.

The Committee did not believe that the practice had been phased out two years ago.

Mr Pieterse stated that the issue was not whether it cost R250 or R2500 to unlock the phone. The fact of the matter was that when a person purchased a phone it belonged to them.

Mr P Mashile, ICASA Chairperson, informed Members that ICASA did hold hearings recently on handsets largely with the aim of determining both the costs and tariffs of the handsets. There were some consumers who had concerns with their locked handsets. ICASA was about to formulate a regulation that would make the locking of handsets illegal.

The Chair stated that the ICASA regulations would be awaited.
 

The Director-General stated that she had no objections to some of the provisions in this Chapter referring to "subscriber" such as the billing provisions, which denoted active participation on the part of the subscriber. There were however other provisions that related to consumers who were not subscribers, such as listening to a radio station. She proposed that the latter provisions also include a reference to "consumers", where it was relevant.

CHAPTER 13: GENERAL
Clause 71: Establishment of Communications and ICT Museum, information and communication technology for government and other related services

Ms Mokoto stated that it was important to note that most of the provisions in this chapter had been imported from the Telecommunications Act. She stated that the ANC proposed a reworking of 71(4), but it had not yet formulated a concrete amendment to the provision. It would be provided at a later date. This provision marked an unbundling of the previous Clause 63 which dealt with competition issues.

Mr Oliphant added that the ANC proposed the inclusion of 71(1) because the previous Director-General did not do what he was supposed to do. Thus the provisions were aimed at strengthening the Committee’s oversight functions.

Clause 72: Offences and penalties
Ms Mokoto stated that 72(3) and (4) were reformulated to clarify the offences and penalties that applied and included specific reference to "any natural person, juristic person or licensee". She proceeded to read out the ANC reworking of the clause.

Ms Smuts asked why the fines were imposed in 72(1) and (2) in a blanket way and proposed instead that the penalties be matched with the offences, as was the case in the Independent Broadcasting Act. Furthermore, she stated that she did not believe imprisonment to be an appropriate penalty.

Ms Mokoto replied that the ANC had considered this matter in its study group, as some instances could require corrective measures. The categorising of the sanctions imposed could be considered, to make the penalty match the offence. She stated that the ANC thus agreed with Ms Smuts’ proposal for proportionality.

Mr Oliphant added that the law stipulated that if a person did not have the necessary funds to pay the fine then they would have to be imprisoned.

Ms Smuts contended that ICASA did not have the authority to imprison any person, as this power vested in the courts alone. ICASA could however only refer the matter to the National Prosecuting Authority (NPA), who would then take the matter to court. The Independent Broadcasting Act did not allow ICASA to imprison persons for offences, and this clause thus needed reconsideration.

A female ICASA councillor agreed with Ms Smuts that only the courts could imprison people for offences.

Ms Smuts asked the State Law Advisor to indicate whether it was possible for legislation to delegate this imprisonment function to an administrative body such as ICASA.

The State Law Advisor replied that the Adjustments of Fines Act provided for the determination of fines by the Minister. If no imprisonment was required then a formula was used to determine the adjustment of the fine. This adjustment was done automatically.

The Chair asked whether that meant that the legislation could not stipulate fines that would be imposed.

The State Law Advisor responded that a statutory body such as ICASA could prescribe fines, but the penalties imposed would be subject to the NPA.

The female ICASA councillor informed the Committee that ICASA did currently prescribe fines by itself, in terms of the Independent Broadcasting Act.

Ms Smuts sought clarity on the proposed 72(4) which required the outsourcing to a third party to build the network.

Mr Oliphant stated that he was not sure whether this was the only way to deal with the matter, and perhaps ICASA would want to deal with it in another manner.

Mr Mjwara informed Ms Smuts that 72(4)(a) stipulated that if a natural or juristic person or a licensee failed to adhere to specific terms and conditions in the construction or placing into service of a communications facility, they would be guilty of an offence and would be directed to outsource the construction or placing into service to competent people because they were clearly incompetent to do so. This applied to any network.

The Director-General stated that she understood the provision to stipulate that the person could be imprisoned after the matter had been submitted to court.

Clause 73: Directory services
Ms Mokoto read out the ANC reworking of the clause, and the proposed amendment to 73(i).

Mr Oliphant stated that he was not entirely sure whether the consumer would be adequately covered here, because it was not certain whether the 1023 number was free to the caller. Furthermore, the White Pages were provided free of charge, whereas it appeared that the consumer would have to pay for the electronic version.

The Director-General stated that the Department recognised that prompt and accurate service would be the benchmark here. The aim was to do away with the current situation in which the caller was kept on hold for three minutes only for the call to be dropped, which then required the person to start all over again.

The Chair asked whether the consumer would be charged for calling the emergency and directory services numbers. He proposed that the operator be required to bear the cost, as part of a social obligation.

Mr Mashile responded that the service organisations would bear the cost of the line, and thus the consumer would not pay. The operators indicated that they could not provide this service free of charge and thus the cost lay with the service organiser, be it the fire station, ambulance services etc. Perhaps the operators themselves could be required to bear the cost, based on social obligation grounds.

Mr Pieterse stated that the White Pages were provided free of charge by the operator, yet consumers would now be required to pay for the very same service when they dialed 1023. He stated that the electronic service should be free as well, at a relative cost to the operator.

Mr Oliphant added that this was a firm proposal from the ANC, and the public must not be misled by telling them its free only for them to in fact be charged for those calls.

The Director-General suggested that the issue of costs involved in directory services would have to be approached differerently to the manner in which emergency numbers were dealt with, because this was essentially a business which could possibly, but not necessarily, be run by operators. The policy directives aimed at lowering the costs of communications in South Africa and the possibility of several SMME’s or other structures in this industry would create healthy competition, and would result in fairly affordable services in this regard.

Clause 74: Carrier pre-selection
Ms Mokoto read out the ANC reworking of the clause, which included an insertion of a 1 July 2006 time frame.

Clause 75: Establishment of public emergency communications centres
Ms Mokoto read out the ANC reworking of the clause, which included the replacement of "end user" with "subscriber".

The Director-General proposed that 75(1) be amended by the replacement of "emergency centres" with "emergency service" because, with the improvement of technology, it might be possible to cover the entire country with just one centre but "service" would denote several centres. Secondly, she proposed the replacement of the word "subscriber" in 75(2) with "consumer", because not all callers into the centre were necessarily subscribers.

Mr Oliphant stated that the ANC was very firm on the free provisioning of this number. Even if it was the case, as ICASA indicated, that the South African Police Services (SAPS) would bear the cost of the 10111 call, those were in fact taxpayers’ money. He contended that the operators could not be allowed to escape responsibility here. He stated that he would be placing a motion in the House requesting ICASA to investigate this matter and to require them to provide a report on this matter. He reiterated that the ANC was very serious on this issue.

Mr Manyatshe replied that this was not in line with the reality on the ground. It did necessarily follow that 10111 or 1023 were national numbers, as the only national number was 112 which was determined in 2001. At the moment all services provided by that number were currently free of charge. Negotiations were currently underway for the Department to take over the running of the call centres. Furthermore, it was not advisable to have a proliferation of national numbers.

Secondly, he noted the perception amongst Members that operators did not currently satisfy their social repsonsbility obligations. He informed the Committee that 30% of Avatar was forwarded to government by way of corporate tax. Thus the argument could not be made that the taxpayers’ money was being used, as though the operators were not making any contribution at all. Operators also made a contribution of 5% of its total national operating income which was given to ICASA, which amounted to hundreds of millions of Rands. If it was felt that the contributions of operators were not adequate then the matter must be negotiated in the proper forum, but should not create the impression that the operators were not discharging their social responsibility mandate.

The Chair assured MTN that the Committee was not saying that the operators did not contribute at all. He asked whether the result of the negotiations with the Department regarding the 112 number would entail the free provisioning of that number.

The Director-General responded that it was precisely for that reason that she proposed the inclusion of "emergency service" and not "emergency centre", because it was planned as a national number. She was confident that once the number became national, the cost would not be borne by the consumer. A balance would have to be struck between the responsibilities of the State and the operators, but the intention was for the number to be provided free of charge to the consumer.

Ms L Martinus, Vodacom, confirmed that the operators had been providing the 112 calls, even though Section 80 of the Telecommunications Act required government to take over this function.

Clause 76: Duties of 112 Emergency Centres and licensees
Ms Mokoto stated that the ANC proposed no amendments to this clause.

Clause 77: National Public emergency number
Ms Mokoto noted that the ANC proposed the amendment of the heading of the clause to refer to a "national" public emergency number.

Clause 78: Standards, capabilities and operating procedures of 112 Emergency Centres
Ms Mokoto noted that the amendment proposed the deletion of the current Clause 72.

Mr S Kholwane (ANC) stated that the fees and charged for telecommunications services currently contained in Section 45(3) of the telecommunications Act had now been elevated to the Bill, but it needed a concrete formulation.

CHAPTER 14: UNIVERSAL SERVICE AND ACCESS AGENCY
Mr Kholwane read out the amendments to this Chapter as proposed by the ANC, which were largely technical and clarificatory in nature.

Ms Smuts reminded the Committee of the submission it received from the private school, which requested that the Bill not discriminate between it and public schools in the allocation of Agency funds in Clause 87(1) because, it argued, private schools had many poor children. She stated that she found its argument convincing, and asked Mr Kholwane whether the submission was considered by the ANC when formulating these amendments.

Mr Oliphant replied that the ANC would revisit this matter, but the relevant educational structures must be consulted..

Mr Mohlalonga proposed that 82(1) be amended to stipulate that the "Agency was under the direction and control of the Board" and not the Minister. He proposed that the matter be referred back to the Department for further consideration.

Mr Oliphant agreed that this matter must be considered at a later stage.

Ms White stated that, as this was a Convergence Bill, universal access considerations should apply equally to broadcasting services. Monies could appropriately be given to broadcasting services to extend broadcasting, and people should be able to apply to the Agency for assistance in paying their Sentech bills, for example. The reference to telecommunications in the Chapter also need to be cleaned up.

Secondly, she suggested that the wording of the proposed 88(3) created the impression that the Media Diversity and Development Agency (MDDA) payment would always be less than the Universal Service Fund payment. She sought clarity as to what would happen when the MDDA payment exceeded the USF payment.

Mr Oliphant responded that this matter would be clarified at a later date, but he believed the MDDA amount was always less than the USF payment.

Mr Mjwara stated that the licensing regime for co-operatives would have to be considered further.

The meeting was adjourned.