A summary of this committee meeting is not yet available.
COMMUNICATIONS PORTFOLIO COMMITTEE
30 August 2006
ICASA COUNCIL VACANCIES: INTERVIEWS WITH SHORTLISTED CANDIDATES
Chairperson: Mr G Oliphant (ANC)
Documents handed out: None
The Committee continued to interview the short listed candidates for the five vacancies on the ICASA Council. The Chairperson congratulated each candidate for having been selected for the shortlist, indicating that 20 out of the 58 applicants had been short-listed. One candidate had withdrawn, and interviews were being held with the remaining 19.
Further interviews were still to be held in the week. The Chairperson suggested that the Committee meet on Tuesday 5 September, and if necessary on Friday 8 September, to finalise the list of eight names that would be sent to the Minister.
After lunch the committee continued its interviews for ICASA Council vacancies. Mr M Tom and Mr A Barendse were the final two candidates that were interviewed.
Interview: Ms I Wilken
The Acting Chairperson asked Ms Wilken if she was subject to any disqualifications in terms of the Act, and asked her also to give a brief introduction about herself to the Committee.
Ms Wilken stated that she had been a consumer activist for many years. During her Honours degree studies in consumerism she became very concerned about the plight of the underprivileged who were not in a position to defend themselves. She also had a financial background and had been in the banking sector for many years. She was currently the CEO of a properly finance company. She believed that she could benefit ICASA because she was prepared to fight for consumers. The broadcasting sector was very important. There were huge gaps in the servicing and ICASA was in her view the right tool to assist these people. She had integrity, honesty and transparency and was a people-person. She believed South Africa and its people had a strong future if they stood together.
Mr R Pieterse (ANC) said that many of his constituents, who were poor farm workers, had complained that they had purchased cell phones, only to find, on getting them home, that they would not work because there was no signal. When they tried to return them the shop said the 7-day return period had expired. Many of the same constituents found that they also could not get SABC2 television and were told that they would have to go with private subscription if they wished to listen to news in their own language. He asked Ms Wilken how she, as a consumer activist, would approach these problems.
Ms Wilken replied that in the first scenario the problem lay with the shop, who, she felt, were clearly not properly equipped to sell if they could not give the correct information, and with the network provider. She stated that they should be asked to attend a hearing. She stated that consumers had rights, but also responsibilities, and she thought many had probably heard of ICASA. On the second issue she felt that ICASA should address the problem of lack of signals and try to ensure that all people could have access to information in their own language.
Mr M Mohlalonga (ANC) asked Ms Wilken what she saw as the key consumer issues in the IT sector, and how ICASA should deal with them.
Ms Wilken replied that communications was the key issue. All consumers needed to have communications. Language and signals were a problem in many places. A budget would need to be found to get services to people on the ground. Only a certain sector of the people had received access for far too long. ICASA could do more and the voice of the consumer should never be underestimated.
Ms M Morutoa (ANC) asked Ms Wilken why she wished to participate in ICASA.
Ms Wilken stated that she was the Chair of the South African National Consumer Union (SANCU), an NGO that was funded by its 40 members. Although it tried to educate consumers in their rights and responsibilities, it was too small to reach significant numbers. Ms Wilken felt that she could through ICASA what she could not do through SANCU, and had the expertise and know-how to assist.
Ms S Vos (IFP) pointed out that many consumers were forced to use Telkom and asked Ms Wilken if SANCU had done any studies relating to the market sphere in telecommunications.
Ms Wilken replied that SANCU had not, but that she was aware of the debate, and knew and approved of the fact that a second participant would enter the market. SANCU had criticised increases in tariffs and pressed for greater competition. However SANCU did not have sufficient funding to engage in significant research on its own. She believed more pressure should be applied to get more competitors in the marketplace.
Ms D Smuts (DA) asked how the Union operated and who its members were. She asked Ms Wilken to indicate the depth of her knowledge about the telecommunications and broadcasting industry. ICASA was highly specialised.
Ms Wilken replied that the SANCU was formed in the 1960s by a group of women. It had an executive and affiliate and associate members. The Executive met every month and then a further meeting was held every two months at which the larger corporates, such as Pick and Pay, Spar, Telkom etc heard what the issues and concerns were. In answer to a question of clarity from Mr Pieterse, she then confirmed that these bodies did not have a vote.
Ms Smuts indicated that even when there were two operators the competition would not necessarily go to pricing but rather revolve around marketing. Assuming that the existence of two fixed line operators had not lowered costs, she asked how Ms Wilken would recommend that ICASA brought the prices down.
Ms Wilken replied that the strength of consumers should not be underestimated. Consumers should stand together and voice their opinions. Although the service was necessary consumers should be able to influence it. If consumers could be educated they could force businesses to address price, quality and conduct surveys.
Dr P Mulder (FF+) noted that activists were normally very independent but the flip side was that they sometimes tended to fight their own battles. ICASA was a team effort so he asked about Ms Wilken’s involvement in teams.
Ms Wilken stated that she had worked in banks and was definitely a people person and well used to working with a wide range of people. Everyone was a consumer. She believed her strong points were her activism, her honesty, her fairness and her belief in what she undertook. She was prepared to stand up for the underprivileged. She believed ICASA was ideally placed to reach the underprivileged and to educate consumers as to their rights and responsibilities.
Interview: Adv A Alberts
The Chairperson welcomed Adv Alberts, asked him to let the Committee know if he was subject to any disqualifications in terms of the Act, and to introduce himself to the Committee.
Adv Alberts stated that he had a legal background and held a Masters in International Law. He was an admitted advocate. He had lectured at Technikon South Africa before its merger. He had also done some research in entertainment law and he had an interest in films and filmmaking. M-Net had headhunted him and he had worked as the Head of their legal division for two years. He had contributed to the first textbook on cyber law and foresaw the potential of the internet, so when Dimension Data offered him a position as Head of internet solutions he had moved there. He was then headhunted by the largest cable and internet operator in Canada and he had worked for them in Canada for two years. After that he had freelanced in Canada, and one of his clients was linked to Telkom, so that he found himself doing a substantial amount of work back in South Africa. He then decided to move back to South Africa. He had never chosen his employment because of the money it offered. He felt the need to make a contribution to society, and he believed strongly in South Africa and its people. From a practical and philosophical point of view telecommunications was the major area that could change the economy and uplift the people. He had seen what it could offer in Canada to the poorest people, and the effects of technology had contributed significantly to India and South Korea. He would feel privileged to play a part in uplifting communities while working in an area he felt passionate about.
Mr Pieterse commented that Adv Alberts had not stayed long at any place of employment and pointed out that this would be a four-year contract.
Adv Alberts replied that the telecommunications sector was extremely fast growing, marked by robust moves and considerable head hunting in the industry. When he saw the moves towards convergence already in 1998 he had decided that M Net could offer opportunities that he wished to have. Similarly the move to Canada enabled him to get opportunities to work in one of the best connected countries worldwide. His move from Canada was a personal wish to return home to South Africa. A position at ICASA would be quite different, as it would be a calling and he would bear public responsibility
Ms Smuts referred to the Electronic Communications Act (ECA) and particularly the economic regime that had been put in place. This was based on European models of being able to declare significant market power holders, and therefore impose conditions. She asked Adv Alberts if he thought this model would work. Furthermore she requested whether he believed the ICASA provisions in respect of facilities leasing would be workable.
Adv Alberts replied that he was not an expert on that part of the Act but as a preliminary comment he believed that any competition was good. After Ms Smuts had elaborated further he commented that he was certainly aware of the dual jurisdiction to the Competition Commission and ICASA. He agreed that ICASA should be involved since South Africa needed properly to merge telecommunications and broadcasting for wider access. An open market was vital and an expert body needed to make strong decisions. He would recommend some further legislative change to formalise the position or at least the finalisation of an agreement between the Competition Commission and ICASA. During his time with Internet Solutions he had worked with and understood the nature of Telkom business, and had also crossed swords with them. He believed that there was a need for a strong body to create space for SNO and other bands and players in the market.
Mr M Kwolwane (ANC) asked what Adv Alberts saw as the main challenges facing ICASA and how he would assist in meeting them if he were to be appointed. He also asked for Adv Alberts’ views on independence of ICASA.
Adv Alberts replied that challenges at a broader scale were directly related to the need for independence. ICASA had come under criticism for allegedly not being independent enough. In his view, the Act gave sufficient powers to ICASA to do its job and therefore strong leadership and independent thought was needed from the Councillors. The interests of the country as a whole were paramount. It was necessary to find some way to lower prices without disrupting the market, to achieve better economic growth. Councillors therefore must act independently, and, while listening to all, to make reasoned and independent decisions on crucial matters in the best interests of the country.
Mr Kwolwane referred to press reports earlier in the week arising out of a conference, which suggested that the government policy of managing liberalisation of the sector had cost millions. There was also a suggestion that the Department of Communications should be disbanded and that the market should simply be allowed to evolve on its own. He asked for Adv Alberts’ opinion.
Adv Alberts replied that there was some truth to the statement that much money had been lost, but he could not comment upon the accuracy of the reports, nor would he advocate disbanding the Department of Communications. That would be ludicrous as clearly a government department had to oversee implementation as the market players could not simply be let loose with no restrictions. Controlled competition was needed. All role players should be working together to create a better South Africa with room for growth.
Ms Vos asked if he could suggest some innovative ways to tackle regulatory issues in cyber law.
Adv Alberts believed that South Africa could take a lesson from Canada. The Canadian regulatory authority had a philosophy of forbearance and was trying not to control the internet at all. It was a new and growing field of media that gave value. Once it had grown to a certain point and had empowered people this might be the time to regulate. Naturally there needed to be controls over some content to protect children, but he did not believe that there was any need to intervene on economic factors. He mentioned that in America 20% of music accounted for 80% of sales when counted on CDs sold. When it was possible to buy I tunes through the Internet, there was a 98% sale rate. If South African artists were able to put their music up on the internet they would be able to do so from home, which would involve little extra costs apart from the access to a PC, while allowing them to be creative. The universal platform would create the “flat earth” which would equalise the world and bring poor people into the picture at last.
Ms Vos stated that there was a need to protect local content in broadcasting and asked how innovative ICASA could be, beyond the quota system, in promoting local content.
Adv Alberts stated that local content was very important, and some local shows had already proved their worth by having good ratings and winning international awards. He believed it was important to showcase South African cultures. He believed one of the ways this could be achieved was through management of better funding and by creating co-production agreements. There was already one with Canada and would shortly be others with UK and Italy and Germany. Hong Kong also had a vibrant industry and there was a huge potential with Bollywood, since South Africa had the largest Indian community outside India. That did not really fall squarely within ICASA’s jurisdiction but rather under the National Film and Video Foundation. ICASA would not be concerned with content but with distribution. He felt that quotas would ensure that every broadcaster did pay sufficient attention to South African based films. Financing was probably available from IDC. It would be necessary to ensure that distribution platforms were available and rolled out as soon as possible so that people could access TV and internet anywhere.
Mr K Khumalo (ANC) asked if Adv Alberts believed that co-location or facilities leasing would be the preferable option for incoming new market players. He pointed out that there were problems in that some new incomers took two to three years to get infrastructure from the municipalities.
Adv Alberts mentioned that co-location in Canada had some difficult experiences. Between 1998 and 2001 there was a great move to fibre optics, in anticipation that this technology would be paramount. He had arrived in Canada in 2002, shortly after the dotcom bubble had burst. In Canada it was possible to obtain excellent connection very cheaply, and there was no problem in getting bandwidth and negotiating co location agreements. South Africa, on the other hand, did not have sufficient bandwidth. It was important to bring new players in and also important, if the existing players were unwilling to comply and share, to ensure that proper connectivity options were made available for new players. It was good that bigger players shared, as it would otherwise become far too expensive for small operators. The same had been seen in the cell phone market where Cell C had piggybacked on Vodacom.
Mr Khumalo asked Adv Alberts’ views on the “pay per view” options and on methods of licensing. Currently the Film and Publications Board dealt with content. He asked if Adv Alberts believed that ICASA should regulate, and whether child pornography should be regulated or whether it fell within freedom of expression.
Adv Alberts replied that the Film and Publications Act applied to all television stations and although pornography as such was not banned, there were restrictions on “severe forms” which was basically that relating to children. He did not personally believe that showing pornography was a good thing but he would have to act in the parameters of the law and therefore would not be able to make a decision on his own. He had worked at M-Net who had considered running a pornography channel and eventually decided not to do so. Most films were sourced from Hollywood and there was no control. Contracts would be made obliging the television channel to purchase all films within a period, and they were obliged to show them all – only isolated exceptions had been made to this.
Mr Mohlalonga asked for comment upon the costs of mobile services, and of pay television
Adv Alberts stated that the cost of mobile communication was excessive in comparison to other African countries. It was cheaper to use MTN in Nigeria than in South Africa. Clearly the companies were out to make a profit but because South Africa made that profit for the companies they had a responsibility to the people they served. Although there was no way to force a lowering of prices more competition would probably lower the prices, which was why the entry of Cell C and Virgin was positive. He would prefer to see prices fall naturally without disrupting the entire market. However, if it was found that the charges were excessive then there should be intervention by ICASA. This could be ascertained by comparative studies with other developing countries, and perhaps by calling upon the CEOs of those companies to explain their pricing.
Similarly the cost of pay television was too high. Once again this could be addressed without upsetting the whole market by allowing in more players. Any space created would probably be filled quite quickly. It was important that the applications already submitted should receive favourable consideration, as this would avail better pricing. He believed it would be possible to engage with DSTV and M Net on their technology. Previously they had maintained that they could not “split” their bundles, but they should be pressurised to find the new technology to allow them to do so. Suggestions had also been made that the elderly should receive price discounts.
Mr Mohlalonga stated that although Adv Alberts had commented on the criticisms that had been levelled against ICASA he had not given his own appraisal. He asked if Adv Alberts thought that the ICASA model merited description as independent and fair.
Adv Alberts commented that he personally had positive experiences with ICASA when working with Internet Solutions. However he had seen the newspaper reports. He would like to believe that the Council was on the right track and open minded enough to look at new models, particularly on convergence. He believed that ICASA had been given the right tools. It needed to take a firm decision, especially in regard to Telkom, where it had been perceived as favouring Telkom; on the other hand Telkom could have a very good legal team that managed to win their disputes. ICASA needed to have the right team to ensure true independence, so that it would not fall for lobbying.
Dr Mulder noted that Adv Alberts had been nominated by the National Association of Broadcasters and asked if he had any connection to them.
Adv Alberts replied that he had been known to the Association through of his background in broadcasting; he had appeared before the Broadcasting Complaints Commission on behalf of M Net. No matter who had nominated him, he believed that in fulfilling a public responsibility decisions must be made in the interests of the public. He would like to see significant progress in the communications sector to fulfil economic upliftment. Africans were resourceful people and if given the right tools could create much. He saw his past employment as having been beneficial and enjoyable, but his connections with the companies were over and he looked to the future. He had done his dissertation on space law and would perhaps go to that in the longer term future.
Dr Mulder asked how Adv Alberts viewed the role of community radios.
Adv Alberts saw community radio as the ideal tool to meet and cater for South Africa’s diversity of cultures and niches. The battles over spectrum would cease once there was better internet connectivity because there would be access to the universe of radio stations and cell phone services. There would in future be sufficient spectrum
Dr Mulder asked for comments on digitisation.
Adv Alberts said that there had to be a move away from the analogue platforms. Television would become digitised; America had already switched off analogue. Everything would meet on one platform and therefore digitisation needed to be brought in as quickly as possible.
Interview: Ms W Mayimele
The Chair asked Ms Mayimele to state whether she had any interests in the sector that would count as disqualifications in terms of the Act, and asked her to introduce herself.
Ms Mayimele stated that she was an educator by profession. From 1994 to 1999 she had served as a Member of Parliament, and subsequently as a diplomat in Canada. She was currently the Managing Director of a skills agency. She had no commercial interests in the telecommunications field that would disqualify her. During her time in Canada she realised that South Africa had serious shortcomings in telecommunications and also realised what a substantial contribution this field could make to the lives of people in South Africa. The ready access to knowledge would enable people to make choices through information and education, and the lack of information would have a negative impact. Ms Mayimele would have no problem in implementing policies and she knew the spirit and the letter of the Constitution. Distribution of services should be in accordance with the needs of society and should be unbiased with fair demographic representation. Experience and reports showed that telecommunications was very expensive. She believed ICASA should tackle this to see that coverage was broader, and government should loosen the restrictions to allow in more role-players. This would diminish the monopoly and give room for improvement. She saw a gap in the allocation of radio spectrums and believed that community radios could be an integral part of communications, promoting cultural and social values. South Africa should be able to reach its millennium goals but could not bridge the digital divide while communications remained so expensive. She believed it should be possible to introduce free nets or alternative subsidies for some under serviced areas and to enter international agreements to make intercommunications possible. As an educator and astute mobiliser she felt she could make a contribution. She would happy to ensure that communities were educated on their rights and understood how the processes worked. She believed ICASA should be turning around the telecommunications industry to make it more competitive and cost effective, with better delivery.
Adv Swart indicated that there were a number of problems with the Under Serviced Area Licences (USALs). He asked what Ms Mayimele saw as the major problems and what role they could play. He asked if the new provisions of the ECA would make it easier for USALs to succeed.
Ms Mayimele believed that the licences had been granted without opportunities for sufficient training. She believed that all role-players should have been better enabled to be effective. The inequities of the past should be addressed both by empowering and training. She believed that mentorship programmes could assist. She believed that if she were appointed as a Councillor she would mobilise and explain concepts and have awareness campaigns to explain issues to all communities and schools.
Adv Swart further asked what challenges Ms Mayimele foresaw with the E-rate concept whereby service providers had to provide a 50% discount to schools, and how she would advocate addressing these challenges.
Ms Mayimele replied that many concepts were good on paper but extremely difficult to implement. Schools would need to have an information campaign. Teachers and pupils would need to be empowered.
Ms Smuts noted that one of the nominations had been made by a person with whom Ms Mayimele had been involved in manufacturing bio diesels in Mozambique, who had commented that Ms Mayimele was adept at forcing things through, no matter what difficulties and barriers. The other nomination had been from a consultant at Liberty Life. There was nothing specific about her experiences in broadcasting or telecommunications, and Ms Smuts asked why Ms Mayimele had chosen this field, and what interest she had in it. She further asked how Ms Mayimele saw the new Electronic Communications Act.
Ms Mayimele stated that ICASA would implement government policy and she could not foresee barriers as long as ICASA was prepared to adapt quickly. She had noted the gaps and felt that she could make a contribution. ICASA should be taking a proactive role and not see policies as barriers.
Ms Smuts indicated that the job of ICASA Councillors was to license; therefore they dealt not so much with communities as with operators and issues relating to broadband and telecommunications. USALs already had their licences and were required to survive in a highly competitive world.
Ms Mayimele stated that she had not meant that the Councillors would see to the information themselves, and understood that a primary function was the licensing. She saw their role as how best to serve the country in terms of the needs that applicants for licences purported to serve, and to assess the realities of their plans.
Ms Morutoa asked how Ms Mayimele believed the ECA contributed towards empowering youth and women, and how she believed this fared in the communication sector. She asked how effective Ms Mayimele thought that the Universal Services Agency of South Africa (USASA) would be, and ICASA’s role in relation to it.
Ms Mayimele replied that women and youth would be empowered if the radio spectrum could be increased. She believed they could be involved in both content and carriage. If women were involved and able to use their own language they would be empowered. Choices became possible when information was available.
Interview: Ms K Serero-Chiloane
The Chairperson asked Ms Serero-Chiloane to give the Committee some information about herself and also to indicate whether any of the disqualifications in the Act applied to her.
Ms Serero-Chiloane stated that she was passionate about her country, was a seasoned professional, and supported fully by her family. She had begun her career in social work, acting as a probation officer in the juvenile Court and advising on appropriate sentencing and corrective interventions. She then joined an NGO which had pioneered drug and alcohol rehabilitation programmes. She had spent some time in the Gauteng Provincial Health Department. Then she returned to study at business school and obtained an MBA. She joined the Gauteng Social Services Department and then moved into universal service agency work, where she was currently Head of Programme, responsible for rolling out universal access projects and looking at the whole question of universal service. Her term of office was due to end shortly, so that she was well positioned to be considered for the ICASA position. She felt comfortable about her achievements and her personal situation. She was fully prepared to take the responsibilities that would come with being on the regulatory Council. She understood how the broadcasting sector operated, and the challenges and role-players in the sector. She would be happy to take her own contribution and understanding to a higher level. In so far as her commercial interests were concerned, she held some Telkom shares, which she had purchased when they came on public offer.
Mr Kwolwane asked Ms Serero-Chiloane what she saw as the major challenges facing ICASA, how she viewed its mandate and what her contribution would be if she was appointed to the Council.
Ms Serero-Chiloane understood that the ECA called upon ICASA to integrate the telecommunications, broadcasting and postal services. She saw the management of this transition as a challenge, particularly since the new Act had both additions and omissions. USALs were a further challenge since the conditions of the licences really had not enabled the licensees to fulfil the objective of bringing telecommunications to under serviced areas. The enabling environment had not been properly created; although some of the USALs had a good business case at the time, the advances of technology, and the application of the ECA would impact heavily upon their ability to be regarded as exclusive USALs. They would now have to compete with the large operators and some of them had not even been able to start operating, as they had not been able to show the spending of the first tranche on infrastructure. ICASA’s challenge here would be to show commitment to enable the USALs to find a way of operating in the under serviced areas.
Adv Swart indicated that he had been going to ask a question on the USALs, but that it had been effectively answered already. However, he would like to ask how ICASA should deal with the question of pricing.
Ms Serero-Chiloane indicated that the licensee could be declared as having significant market power and then conditions could be imposed. The law empowered ICASA to obtain details of spending on capital operations and profit shares so that a determination could be made if the price and mark up were fair, and to counter anti-competitive behaviour.
Mr Pieterse indicated that experience had shown that USALs had not succeeded in taking service to the people. He asked if Ms Serero-Chiloane believed that PTN to the municipalities would be the best option, and whether they route of public / private partnerships (PPPs) should be followed.
Ms Serero-Chiloane indicated that there had been some discussion around this issue and it had been concluded that although the PTN route might be viable for the larger municipalities, it would not be ideal for the smaller ones who could not manage their core business. Perhaps they could partner with companies to see how they could exploit the municipal digital option. There had to be support and an enabling environment because where the licensees had to operate in the nodal points they were mostly lacking in resources, so that they would need strong strategic partners, who perhaps could even be the larger operators. USALs who had licences already could also possibly be strategic partners but finance was needed. She believed a model could certainly be piloted.
Mr S Nxumalo (ANC) asked what Ms Serero-Chiloane saw as her strengths that she could bring to the ICASA Council.
Ms Serero-Chiloane stated that licensees had been given community service obligations which were very loose and difficult to enforce. Her own experience with operators was that they wanted to be seen to implement them, entered into negotiations and then did nothing further, stating that they had sent proposals to ICASA and there the matter rested. She was not sure whether ICASA indeed was slow or inefficient in looking at the proposals, but it was clear that the obligations had to be aligned closely to the development objectives to be achieved. Currently there did not seem to be enough alignment to the millennium goals. She believed that she could assist in ensuring that the obligations, goals and set targets were all aligned and believed her skills enabled her to play a significant role. She saw the lack of harmony or integration as a significant challenge to reducing the digital divide and there seemed to be no clear convergent vision.
Ms Smuts referred to Ms Serero-Chiloane’s earlier comments on resourcing the USALs. She asked whether Ms Serero-Chiloane would recommend to the Minister that she stop issuing ITAs for USALs. Admittedly those already licensed posed a different problem. She also asked if she would recommend that USASA be closed and what she would suggest on imposition of licence conditions.
Ms Serero-Chiloane stated that she would not make either recommendation. In regard to the USALs the process had already been put through and it was not possible to disadvantage people from their existing position. Strategies for improving the bottleneck had not been fully explored, in her view. Only some of the funding allocated had been released. She would rather recommend to the Minister that she apply to National Treasury for release of capped money. USASA had been operating at under R3 million and if a figure of R200 million per annum could be released this could put a major and needed injection into the finances of USALs and rehabilitate them. They also needed to have training and the conditions of the grants could be tightened.
Ms Serero-Chiloane stated that she did not believe that USASA could close. If it were the new law would have to be amended. The effectiveness of USASA had largely depended upon the constraints of the budget and skills. It was possible to call in consultants, such as economists, to assist, and it was certainly possible to revive it.
The Chairperson suggested that the Committee should meet on 5 September, and if necessary again on 8 September, to finalise the list of nominees to be sent to the Minister. Members agreed that this would be acceptable.
Mr Mohlalonga also asked whether the Committee should recommend 7 or 8 names. After discussion it was agreed that the Committee would probably submit 8, although members did understand Mr Mohlalonga’s reasoning.
Mr Mohlalonga raised a query on the catering and the Chairperson undertook to look into the matter.
Ms Smuts enquired whether the Chairperson would raise the question of possible disqualification with one of the candidates. It was agreed that this would be discussed if necessary after the selection process had gone further.
The meeting adjourned for lunch
Interview with Mr M Tom
The Acting Chairperson asked Mr Tom to tell the committee more about himself.
Mr M Tom stated that he had expertise in Financial Management. He confirmed that no family members had any interest in the communications industry. In 2004 he had opened a communications company. Prior to this he had worked for government had helped to develop strategies and policies.
Ms Smuts asked whether Mr Tom intended to dispose of his interest in the company should he be offered appointment as a Councillor. She enquired why he had wished to participate in ICASA at present. She wanted to know how he would encourage competition in the sector.
Mr Tom replied that he would decide what to do with the company should he be appointed as Councillor. He also participated in a logistics company. He commented that he was not necessarily in agreement with Ms Smuts’ comment that ICASA was a troubled entity, but if this was the case he would have the ability to turn it around. He had previously been appointed by the President to come up with turnaround plans for Education and Health. Whilst he could not claim to be an expert when it came to opening the market up to competition, he believed that competition was an important area.
Mr Khumalo (ANC) commented that Telkom was considered to be dominant in the telecommunication sector. He enquired how Mr Tom suggested that the market be opened to competition. He asked Mr Tom’s view on foreign ownership and whether he believed the market should be kept as it was.
Mr Tom replied that market forces could be crude. He believed that there should be a balance and that government should intervene. He said that a dominant company generally did have the resources to gather the correct information that was needed. He agreed that it was important to know how best to encourage competition.
Interview with Mr A Barendse
The Acting Chairperson asked Mr Barendse to tell the committee more about himself and what he had been doing since he left South Africa. He also asked for comment on whether he held any interests in the sector.
Mr Barendse told the members that for the last five years he had been living in Amsterdam. He previously worked for Telkom and lived in Cape Town. Whilst working for Telkom he had studied part-time. Whilst living in Europe he hadhad the opportunity to study the economics of the telecommunications industry. He was currently an Assistant Professor in a Faculty for Technology, Policy and Management, and was currently undertaking research on the economics of telecommunication infrastructure.
The Acting Chairperson enquired whether Mr Barense was still a South African citizen and what interest he had in the sector.
Mr Barendse replied that he and his family were still South African citizens but had held Dutch residency. In response to the question on interests in the sector he confirmed that in about 2001 he had purchased shares in Telkom.
Mr V Gore (ID) commented that one of the problems in the sector related to unbundling. He commented that there were problems with competition in the core network and that there had been criticisms that the Electronic Communications Act (ECA) did not go far enough to promote competition.
Mr Barendse replied that he was not fully up to speed with everything that had taken place in the sector since he left. The competition in the core network was extremely challenging. In the Netherlands the local loop unbundling had been mandated during 2000 but it was not implemented immediately.
Ms Smuts commented that in South Africa there was a dominant incumbent. She wanted to know how successful the implementation of wholesale prices had been in Germany and Europe. She commented that Telkom was found guilty of overpricing and was subsequently fined.
Mr Barendse replied that Europe had a market definition analysis process. The role of regulators had subsequently changed. In the current situation regulators first had to do an analysis of the market to find out who were the dominant players.
Mr Pieterse enquired how Mr Barendse, if elected, would assist USAL licence holders to deliver on their mandate.
Mr Barendse replied that in his view the USALs could not survive without more funding as they were still based on an old business model.
Mr Khumalo wanted to know if Mr Barendse believed that South Africa was near to achieving its universal service obligations.
Mr Barendse replied that experience had shown that the more suppliers there were, the better the prices could be. However there could also be some repetition. Competition could be elusive, but the issuing of more licenses would augur well for investment. Bench marking was important for developing countries. He considered that South Africa was making advances and noted that in Europe fixed line revenue was decreasing.
Mr Gore enquired how Mr Barendse would view the benefits of regional regulation.
Mr Barendse replied that the regional and local positions in regard to operators differed in many respects. Policy and regulation had to be implemented by the regulators. He believed that South African should do more in terms of regional regulation.
The meeting was adjourned.