ICASA Amendment Bill; Electronic Communications Bill: briefing by Department of Communications

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SELECT COMMITTEE ON LABOUR AND PUBLIC ENTERPRISES

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
15 November 2005
ICASA AMENDMENT BILL; ELECTRONIC COMMUNICATIONS BILL: BRIEFING BY DEPARTMENT OF COMMUNICATIONS

Chairperson: Ms B Themba (ANC) [Limpopo]

Relevant documents
Independent Communications Authority of South Africa Amendment Bill B32B-2005
Electronic Communications Bill [B9B-2005]
Department of Communications Briefing on Electronic Communications Bill

SUMMARY
The Department of Communications explained that the ICASA Amendment Bill contained all the administrative and financial matters formerly contained in the convergence legislation, as well as certain outstanding matters in the ICASA Act that needed to be resolved in the amendments. The Bill outlined the procedure for appointment and removal of ICASA councillors via a panel established by the National Assembly. It provided clarity on the functions of ICASA, its chairperson and CEO and also introduced a performance management system for councillors. The concerns with the independence of ICASA had been resolved and its independence ensured. The ICASA Bill also dealt with the appointment of experts, both South African and foreign, provided a procedure for the transfer of staff from the Postal Regulator to ICASA, provided for the establishment of the Complaints and Compliance Committee which would monitor and enforce industry compliance with the legislation and spelt out the powers of inspectors. The ICASA Bill addressed the industry’s concern that ICASA needed to be better resourced by introducing a mechanism that enabled ICASA to approach the Minister of Finance for funding when it needed funds.

Members expressed their dissatisfaction that the Bill only involved the National Assembly in the removal and appointment of councillors, which relegated the NCOP to merely a rubber stamping role. However it was then suggested that the reference to "National Assembly" in the appointment clause be deleted so that the Minister alone appointed the panel, but would include two Members of Parliament. The Chair and the Department of Communications agreed to this. The Committee asked questions about the judge heading the Complaints and Compliance Committee and the specific skills needed by the inspector.

The Department of Communications explained that the Electronic Communications Bill was formerly known as the Convergence Bill, aimed to promote convergence in the broadcasting, broadcasting signal distribution and telecommunications sector and provided the legal framework for convergence of these sectors. The overarching purpose was to avoid specifying the particular technology that should be used to provide a specific service. It introduced a new licensing framework to that end, namely individual and class licences, which ensured technology neutrality by reflecting the service or the infrastructure rather than the type of technology used by the licensee. The Bill provided a framework for the interconnectivity of all network communications licensees with each other as long as they are licensed. It dealt with competition matters by stipulating that ICASA would devise regulations which would prescribe those matters to be referred to the Competition Commission and the procedure that would have to be followed. The Bill required ICASA to prescribe the country’s numbering plan and ensure numbering portability in 2005 and also required ICASA to devise a consumer code of conduct. The Bill altered the name of the Universal Service Agency to the Universal Service and Access Agency of South Africa, and now required all licenced operators to contribute a percentage of their annual turnover to that fund. Finally it introduced a performance management system for the CEO and the Agency itself.

MINUTES
Briefing on Independent Communications Authority of South Africa Amendment Bill
Ms Mashile Matlala, Department of Communications: Senior Manager: Telecommunications Policy, explained that the process began in 2002 when the Department first considered the concept of Convergence legislation. The Department recognised over time that all the administrative and financial matters in the convergence legislation should properly be placed in the ICASA Act, and it was for that reason that the Department initiated the amendment. The Department also then realised that there were certain outstanding contained in the ICASA Act that needed to be resolved in the amendments. Those related to the functions and operations of the regulator.

Section 2
She stated that some of the definitions in Section 1 of the ICASA Act of 2000 (the principal Act) were begin amended and deleted, because those definitions were either contained in- or related to the pieces of legislation that were being repealed by the Electronic Communications Bill (formerly the Convergence Bill). The two pieces of legislation being repealed by the Electronic Communications Bill (the EC Bill) were the Independent Broadcasting Act (IBA Act) and the Telecommunications Act of 1996.

Chapter 2
Section 7
The amendment effected to Chapter 2 of the principal Act involved the appointment procedure of ICASA councillors, provided clarity on the functions of the regulator and its chairperson and also introduced a performance management system for councillors.

The review of the appointment procedure for councillors in the Bill provided for a more expedient procedure, and focused it on the specific requirements of the regulator. The principal Act currently required councillors to be appointed via a rather protracted process. This involved the placement of an advertisement by the Portfolio Committee on Communications in the public media to invite nominees for appointment. Members of the public would then forward names to the Portfolio Committee on Communications which would then conduct interviews, and would then arrive at a shortlist which would be recommended to the President.

The amendment thus proposed the establishment of a panel by the Portfolio Committee on Communications. The panel would call for nominees which it would interview and recommend to the Minister, and the Minister would then forward that recommendation to the National Assembly for appointment. She stated that the Department had considered the legislative frameworks employed in various countries differed. The South African model was very cumbersome and lengthy and required significant resources, and Ms Matlala was of the view that the amendment proposed in the Bill did not remedy that.

The issue of constitutionality regarding ICASA’s independence has been an issue for some time but the Department had been working with the State law Advisor, to ensure that constitutional principles were not breached. The Bill and its new appointment procedure did not interfere with the independence of the regulator

Section 9
The amendment introduced a performance management System for the councillors as no such structure was currently in place. The Bill now required the councillors to enter into a performance agreement with the chairperson, and the chairperson would enter into a performance agreement with the Minister. These would be based on the employment conditions and specifics of the councillors, which ICASA would have to provide. The Bill also provided for a consultative mechanism for the development of an ICASA budget.

Section 10
These amendments dealt with the appointment of the office for chairman, and clarified that the Chairperson may be reappointed at the end of his or her first term of office.

Section 11
The amendment dealt with the removal of councillors from office. It allowed for the establishment of a panel which would make a recommendation to the Minister, and the final decision would be made by the National Assembly because it appointed the councillor in the first place. Ms Matlala stated that she was of the view that the removal process was also too long and cumbersome.

The Bill also elevates the status of the Chairperson to make it a more senior position, in order to provide leadership role to all councillors, which was not spelt out in the principal Act. This would ensure that the Councillors entered into a performance management agreement with the Chairperson. All the councillors were thus equal, except that one would be elevated to position of Chairperson.

Section 13
This amendment dealt with the minutes of the Council, how they should be taken and dealt with. It was not a new provision but was instead taken from the current IBA Act.

Section 14
The provision clarified the role and powers of the CEO.

Section 15
Section 14A
The amendment dealt with the appointment of experts. It provided that the Minister must approve the appointment of experts who were not South African citizens, whereas ICASA could appoint all local experts.

Section 14B
The amendment dealt with the transfer of staff from the Postal Regulator, which would move from the Department of Communications to ICASA. This would result in a single regulator. The staff would be transferred to ICASA has soon as Bill was promulgated.

Section 14C
The amendment dealt with confidentiality and sought to regulate how confidential information should be managed by councillors.

Section 14D
The provision dealt with the limitation of liability and provided that councillors would not be held personally liable for any damage or loss suffered.

Section 16

The amendment was trying to address the concern raised by industry that ICASA needed to be better resourced. She stated by way of background information that during the convergence process and the initial consideration of the ICASA amendment, it was proposed that ICASA be allowed to retain a certain portion of the licence fees it obtained from operators. The Department agreed and discussed it with National Treasury. The proposal was however not accepted by Cabinet because it would create a conflict of interests if the regulator were to be funded by the very sector it was regulating.

The Department was then instructed to devise a mechanism that enabled ICASA to approach the Minister of Finance for funding whenever ICASA needed funds. The Minister of Communications would then consult with the Minister of Finance, and forward that proposal to Cabinet for approval. This mechanism allowed ICASA to obtain funds whenever the need arose, and it thus did not have to wait for the three-year budget cycle prescribed by the Public Finance Management Act (PFMA).

Section 17
The amendment placed a restriction on the utilisation of the name of ICASA.

Section 18
This was a new provision which provided for the establishment of the Complaints and Compliance Committee (CCC), which was currently the Monitoring and Complaints Committee under the IBA Act.

Section 19
This provision established the CCC and prescribed its structure, mandate and functions.

Section 17A
This provision stipulated that the CCC would consist of no more than seven members of which one must be a councillor. The Chair of the CCC must be a Judge of the Hugh Court, whether active or a resigned judge and one member must be an advocate or attorney with at least ten years’ experience. The complaints lodged by the public would be sent to ICASA who would then forward them to the CCC.

Section 17B
The functions of the CCC were spelt out in this provision.

Section 17C
The provision dealt with the procedure to be followed. It stipulated that complaints must be lodged with ICASA within 60 days of becoming aware of the non-compliance, and ICASA could then forward the complaint to the CCC. The licensee must receive notice setting out the alleged non-compliance and must be given reasonable opportunity to respond thereto. The complainant would then have a reasonable opportunity to respond, and the CCC would then deal with the complaint. Oral presentations would be heard by each party. The CCC could hold a pre-hearing conference to give direction to the parties regarding the procedures to be followed by each party.

Section 17D
The amendment proposed that the CCC must make findings within 90 days of completion of the hearing.

Section 17E
This provision dealt with the process by which ICASA would arrive at its decision.

Section 17F
The amendment dealt with the inspectors that would be established by ICASA. Their remunerated must be decided upon by ICASA. Inspectors will be monitoring compliance of licensees.

Section 17G
This provision stipulated the powers of the inspectors to enter, search and seize premises or equipment of the licensee in question. Mr Matlala stated that the Department was asked to check whether the powers granted under the Bill were in line with the powers granted by the Criminal Procedure Act, and that would be clarified.

Section 17H
She stated that the provision outlined the offences and penalties imposed on infringing licensees.

Sections 20-22
Ms Matlala indicated that these provisions listed the sections and schedules in the principal Act that were being repealed.

Section 23
This provision merely contained a summary of all the sections in the principal Act that had been amended by the Bill.

Discussion
Ms N Ntwanambi (ANC) [Western Cape] thanked the Department for the briefing. She asked whether the performance management contracts would include the provision of training.

Ms Matlala responded that the system still had to be developed by ICASA, as well as the form an documentation that would have to be completed. The agreements would differ from councillor to councillor. The provision merely referred to the performance management system and not to the individual contracts that would have to be concluded, because the Bill was trying not to be over-prescriptive.

Ms Ntwanambi asked whether the CEO had more powers than the Chairperson of the Board.

Ms Matlala replied that the CEO was the highest authority with regard to the operations of ICASA and its staff and finances whereas the councillors were the highest authority on policy decisions, which was headed by the Chairperson. She was thus of the view that they were equally powerful, in their own areas of expertise.

Ms Ntwanambi asked why the Bill only required the National Assembly to make the recommendation regarding the removal and appointment of councillors. The Bill was brought to Parliament, which included the NCOP, and that must be reflected in those provisions.

The Chair asked why the proposed section 5(1A)(a) stipulated that the National Assembly alone was allowed to appoint the five members to the panel, and not Parliament as a whole. She sought clarity on the role of the NCOP in the process.

Ms Matlala responded to the two questions by stating that it was a tradition within the Department’s drafting style. The Department consulted the Constitution, which referred to the National Assembly and not Parliament when dealing with issues of national policy. If the tradition were deviated from, it would be the first time that any piece of legislation produced by the Department referred to Parliament and not only the National Assembly. The decision would have to be made by the Committee.

Ms Ntwanambi accepted the explanation but questioned the very reason for including the NCOP in the process if it really had no say in the actual workings of the provisions of the Bill, once passed.

The Chair expressed her disapproval at the perception that the NCOP was merely a rubber stamp.

Ms Matlala replied that the Department did not take control of the Bill once it was handed over to the Portfolio Committee, as it was simply instructed as to where the Bill would have to be forwarded to. It did not dictate to Parliament the procedures that the Bill would have to follow.

Ms Ntwanambi proposed the replacement of the words "National Assembly" with "Parliament" throughout the Bill.

The Chair noted that the Committee agreed to the proposal. She proposed that the number in the proposed section 5(1A)(a).be increased to seven, so that the two extra members could then include representatives from both Houses of Parliament.

She noted that the Committee agreed to the proposal.

Mr D Gamede (ANC) [Kwazulu-Natal] suggested that the reference to the National Assembly in the proposed section 5(1A) be deleted, so that the Minister alone appointed the panel that would include the two Members of Parliament.

The Chair agreed.

Ms Matlala agreed and stated that the same would have to be done in the proposed section 8, for consistency.

Ms Ntwanambi suggested that the word "or" be inserted at the end of the proposed section 17A(2)(a) as the current formulation implied that both section 17A(2)(a) and (b) would have to be satisfied, which was not the case.

Ms Matlala agreed to the insertion of "or", and stated that its omission was simply a typographical error..

Ms Mtwanambi asked whether the proposed section 17A(4)(f) should in fact refer to the Constitution of South Africa which was passed in 1996, and not in 1993 as was currently reflected.

Ms A Johaar, Senior State Law Advisor, replied that the proposed section 17A(4)(f) referred to the Interim Constitution, which had not yet been repealed. The reference was thus correct.

Ms Ntwanambi asked whether that meant that a person who had committed an offence before the 1993 Constitution became effective would be eligible to become a member of the CCC.

Ms Johaar responded that the only requirement in the proposed section 17A(4)(f) was that the person must not have been convicted of an offence after 1993.

Ms Matlala added that the aim was to ensure that people who were previously disadvantaged by being convicted before 1993 were not excluded from being CCC members. The nature of most of the offences for which people were convicted before 1993 was because South Africa did not have a Constitution back then.

Mr Gamede agreed with Ms Johaar as the country had only one Constitution namely the Constitution of 1996. Yet the provision in question did not reflect the Interim Constitution of 1993 but instead purported to be the final Constitution of 1996. A reference to the Interim Constitution must be inserted for clarity.

Ms Johaar respectfully disagreed. The full name of the Constitution was the Constitution of South Africa Act 108 of 1996, whereas the full name of the Interim Constitution was Act 200 of 1993. The word "Interim" cannot be inserted in the legislation because that was merely a colloquial name for Act 200 of 1993, and was not its official name. It was standard legal drafting practice to site the Interim Constitution in the manner reflected in the proposed section 17A(4)(f).

Mr J Sibiya (ANC) [Limpopo Province] asked whether a non-South African citizen who was appointed as an expert under the proposed section 14A would be subject to the laws of the country, should he commit an offence while discharging his duties as an ICASA employee.

Ms Matlala replied that the provision stipulated that the Minister of Communications would have to approve the appointments of non-South African citizens. In reaching that decision the Minister would then look into the particular circumstances of that individual to assess whether or not they posed a risk to the State.

Mr Sibiya was of the view that the area of emphasis in the proposed section 17E(1)(f) was misplaced. The current wording suggested that as long as nobody lodged "similar complaints" against the licensee in future then he would be fine. The focus should instead be placed on ensuring that the licensee never again violated his licence conditions.

Ms Johaar responded that the provision explained that section 17E(1)(f) was only one of the important factors that ICASA would take into account when reaching a decision. It thus referred to the situation in which, for example, a certain pattern had developed but which did not necessarily amount to non-compliance, and the provision allowed ICASA to take that into consideration in making a decision. If however there was positive non-compliance with the principle Act or the Electronic Communications Bill, it would amount to a criminal offence.

Mr Gamede expressed his concern that if an active judge were appointed to the CC under the proposed section 17A(2), the demands of the CC might have a negative impact on his job as judge of the High Court. He asked whether the practicalities of the appointment been discussed with the Department of Justice and Constitutional Development.

Ms Matlala replied that stipulated that the person can be either a high court judge or a magistrate or an advocate, and did not thus restrict the person to a judge alone. The Bill was however running at risk in not specifying a time-frame within which the decision must be finalised by the CCC. The intention was for the CC to have much more expedient and less onerous procedures than courts of law. .

Mr Gamede stated that his concerns were solely practical, as the demands placed on the judge by his work in the CCC could hamper his judicial work.

Ms Johaar responded that It is not envisaged that an active judge would be moonlighting on the CCC while still serving as a judge in a High Court. Instead it would be a judge whom the Department of Justice and Constitutional Development itself had seconded to the CCC, as his permanent employment.

Mr Gamede expressed concern that the proposed section 17 F contained no express reference to the specific skills that would be needed by the inspector. That needed to be spelt out because the inspector needed knowledge of the specialised field he was working in.

Ms Matlala replied that the provision did not specifically refer to the skills needed because the inspectors would be performing different types of jobs within ICASA, which required different skills. The decision was thus taken against specifically specifying the skills needed because the lost would be too long. The Department could however consider the inclusion of the list, should the Committee so wish.

Mr Hendricks noted that the proposed section 17C did not contain a time period within which the licensee needed to respond to the CCC. If one were not included the licensee could drag out the process unnecessarily.

Ms Matlala responded that no timeframes were inserted because the judge would decide the timeframe, based on the nature of the complaint itself. Some complaints could require investigations to be conducted, which would take time. The judge thus had the discretion.

The Chair asked whether there was any specific reason why the number of five councillors was decided upon in the proposed section 5(1A)(a).

Ms Matlala replied that there was no specific reason. The Department listed the kinds of skills that would be needed on the panel, and they amounted to five. The number of members on the panel could be increased if additional skills were required.

Ms Ntwanambi suggested that the word "services" in the proposed section 17E(2)(d)(I) be replaced with "service".

Ms Matlala agreed to the amendment.

Mr Hendricks asked what the lifespan of the CCC was.

Ms Matlala responded that it was a permanent committee. If a member resigned, they would be replaced.

The Chair asked the Department to indicate how soon it could produce the consolidated document with all the Committee’s amendments.

Ms Matlala responded that it could be available in the morning.

The Chair stated that the consolidated Bill would be considered the next morning.

Briefing on Electronic Communications Bill
The Chair stated that it would be the first briefing received by the Committee on the Electronic Communications Bill (the EC Bill).

Ms Matlala stated that the EC Bill was a voluminous document, and she thus decided to summarise the essential points of each chapter which would be outlined in the presentation. The presentation document did explained all chapters except 10 and 11, which would now be outlined.

Chapters 10: Competition Matters
She explained that this chapter had been contested by the Competition Commission because there was confusion as to the precise boundaries of the jurisdiction of both ICASA and the Competition Commission with regard to competition matters in the communications industry. The chapter had thus been removed and reinserted in the Bill several times. The two parties did however discuss the matter and agreed to give ICASA legal direction on what should be dealt with by ICASA, and what should be dealt with by the Competition Commission. It was decided that ICASA would devise regulations which would prescribe the matters that would be referred to the Competition Commission, and the procedure that would have to be followed.

Chapter 11: Numbering
Government presently had a numbering plan with ICASA but it only addressed the current landscape of the market, and it did not take electronic numbers into consideration. The Telecommunications Act of 1996 introduced the concept of number portability, which enabled end users to retain their original number while moving from one service provider to another. The Department had planned to roll out that facility by 2006. ICASA must devise regulations as to how the numbers should be ported.

Chapter 14: Universal Service Agency of South Africa
In addition to the point made in the document, Ms Matlala indicated a performance management system was also introduced for the CEO of the Universal Service and Access Agency of South Africa (USAASA), which was not currently provided for.

Discussion
Mr Sibiya asked whether the USAASA operated outside the South African borders, as the name suggested, and how exactly it benefited the country.

Ms Matlala replied that the aim of the fund was to provide access to electronic communications services to South Africa. The Department focus on the teledensity levels with regard to fixed line services, and did not consider mobile telephony. The intention was to encourage people in the areas that had little or no fixed line services to apply for licences, known as under-serviced area licences (USALs), to provide those services in that area. Government was subsidising those service providers up to R15 million, over a three year period. Currently only certain licenced operators were required to contribute 0.2% of their total annual turnover to the Fund, but the EC Bill now required all licenced operators to contribute, including the broadcast service providers. The growth of the pool of contributors would allow the scope of the funding to reach other under-serviced areas, and to provide access to broadcasting services as well.

Mr Gamede stated that the presentation indicated that the technical equipment standards in Chapter 6 of the EC Bill were prescribed by the "Standards Act", and he asked whether the South African Bureau of Standards (SABS) was consulted at all.

Ms Matlala responded that the EC Bill did not refer specifically to the Standards Act, but the telecommunications equipment was currently being approved by ICASA. ICASA and SABS had engaged in lengthy discussions as to the kind of equipment that each should be allowed to approve, and ICASA must produce resolutions on those agreements..

Concluding remarks by Chairperson
The Chair stated that the Committee would meet on the next day to discuss the amendment it had proposed to the ICASA A/B, and it would also receive a full briefing on the EC Bill as this was merely an informal briefing.

The meeting was adjourned.

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