Telecommunications Amendment Bill: briefing

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12 September 2001
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

12 September 2001


Chairperson: Mr N Kekana

Relevant Documents:


Telecommunications Amendment Bill [B65-2001]
Department of Communications Powerpoint Presentation (awaited)

This section of the briefing focused on Clause 6 to Clause 22 of the Bill. Due to time constraints the remainder of the Bill will be discussed at a later date.

The Department informed the Committee that the introduction of the Second National Operator on 7 May 2002 would bring to an end the period of Telkom's exclusivity. The Second National Operator will be able to use Telkom's infrastructure for a period of two years. The introduction of a Third National Operator in 2005 is subject to a feasibility study.

The Deputy Director General, Mr P Pongwana, continued with the briefing started the previous day:

Clause 6:
Amendment to S32A: The Bill specifies the introduction of competition at the end of Telkom's period of exclusivity. By 7 May 2002 the Second National Operator (SNO) should be licenced. The SNO will be able to use Telkom's infrastructure for two years. Where Telkom and the SNO are unable to reach agreement the regulator will adjudicate. A feasibility study will have been conducted by 2004 to determine whether additional licences should be issued to a Third National Operator by 2005.

Mr V Gore (DP) asked if it was the intention of the Department that the Third National Operator (TNO) should provide service-based competition.

The DDG stated that this was the intention. It had been agreed at the second colloquium that there should be at least one new operator, i.e. the SNO. A TNO would be subject to a feasibility study.

Ms M Magazi (ANC) asked if the service based competitor to be introduced would include the Small/Medium/Micro Enterprises (SMMEs).

The DDG replied that it did not. It only referred to operators like the SNO, which would use Telkom's facilities.

The Chair asked what the introduction of an SNO would mean to the ordinary person.

Mr Gore referred to the fact that disputes would get referred to the regulator if the SNO and Telkom cannot reach agreement. He asked what the default procedure of the regulator is.

Ms S Vos (IFP) asked that the parties could seek redress from the courts.

The DDG replied that the parties have 60 days to reach an agreement after which the matter is dealt with by the regulator, who will resolve outstanding issues. He added that one cannot be prohibited from going to court despite the fact that there is a regulator.

The Chair referred to the fact that an additional 30 days are given if parties fail to resolve the dispute within the 60 days. Together this amounts to almost three months. He asked where these figures came from i.e. if they were based on international best practice.

The DDG pointed out that earlier discussions had indicated that this process could actually take longer. They had however decided that 60 days was the norm.

Mr R Pieterse (ANC) asked how the consumer would benefit from the introduction of the SNO, given the fact that there would be no price difference between them and Telkom.

The DDG replied that the SNO would be using Telkom's infrastructure initially as theirs would take two years to complete. It had therefore been agreed that for this period of time the SNO would not be able to cut costs. The SNO will therefore have to charge the same as Telkom until it has its own infrastructure in place.

Mr F Masurumele (ANC) asked if there are ways of resolving disputes other than resorting to courts.

The DDG said that the Telecommunications Mediation Committee could also resolve disputes.

Amendment to S32B: This clause deals with the set-aside that will be made to Easi-tel and Transtel.

Mr Gore asked how the rest of the SNO would be constituted.

The DDG stated that government would decide this by having regard to various criteria.

Mr E Magashule (ANC) asked if there was any conflict of interest arising from the fact that the Minister of Public Enterprises is a shareholder in the SNO while there also has to be concurrence with this Minister. He asked why there should be concurrence with this Minister.

The DDG said that despite the fact that the Minister of Public Enterprises is a shareholder it is still Cabinet that will agree or disagree to the set-aside (irrespective of what the Minister says). There is no conflict because it is government that is the shareholder.

The Chair suggested that it may be necessary to engage with Public Enterprises to determine their opinion regarding the issue of shareholding.

The Chair asked how the contribution by Transtel and Esi-tel would be valued.

The DDG replied that there would be an independent valuation of Transtel and Esi-tel.

Amendment to S32C: As from 7 May 2002 Sentech will be granted a licence to provide an international telecommunication gateway service (enabling it to act as carrier of carriers) and a multimedia service.

Mr Pieterse pointed out that by setting aside the licence for Sentech one is ignoring other multimedia service providers.

The DDG stated that the clause does not imply that Sentech would be the only provider. The government would not force the SNO or the TNO to use Sentech. It is merely giving Sentech a licence without excluding other licenced operators.

Clause 8: Amendment to S34: When the Minister issues an invitation to apply s/he must consult with the regulator. The Minister should take into account certain criteria. It will also be necessary for the Minister to specify the kinds of services in respect of which applications are invited.
Clause 9: Amendment to S35: The clause sets out the process to be followed once the Authority receives an application for a licence. This was introduced as a result of the Cell C saga.

Ms Smuts noted that Clause 9 was increasing the powers of the Minister as s/he previously did not have the power to reject a recommendation.

The DDG agreed, saying that this would prevent another Cell C saga.

Ms Smuts argued that this might result in litigation as increasing the powers of the Minister meant that powers were being removed from ICASA.

Clause 10: This clause provides for alternative licencing methods. This was introduced to keep options open.

Ms Smuts cautioned that this clause was potentially dangerous since it enables one to ignore the principle of 'fair and non discriminatory procedures'. It would therefore be necessary to add a proviso to the clause.

Clause 11:Amendment to S36A: The clause elaborates on the definition of Public Switched Telecommunications Service (PSTS). It provides details of services to be provided under such licence, e.g. fixed mobile services.

Mr Gore stated that the PSTS uses a circuit switch network. The Third Generation services (3G), which is included as one of the services to be provided under such licence, uses a packet switch network. He asked the DDG to explain this anomaly.

The DDG explained that the development of technology could not be constrained if one aims to provide cheaper services. All facilities are used to provide Third Generation services.

Mr Gore insisted that there still was a conflict in the types of technology being used.

The Chair asked if Mr Gore was suggesting that S36A (1) (h) should specify the types of circuits being used.

Mr Gore reiterated the fact that the law as it stands was including circuit switch under packet switch technology.

The DDG responded that they wanted to avoid talking about specific types of technologies and rather wanted to focus on the services.

The Chair suggested that this issue could be dealt with at a later stage. He asked why fixed mobile was being restricted to 1800MH.

The DDG replied that it was not being restricted since the Act does not say that one cannot use any other spectrum.

The Chair argued that in effect fixed mobile can only take place at 1800MH.

Ms Smuts stated that technological neutrality is important. The Bill is however not neutral. It is difficult if one includes the spectra, as one always needs separate licences for the different spectra.

Clause 12: This section grants Cell C a licence to provide a mobile telecommunications service.

Ms Smuts asked why the specific operators are being written into law.

The DDG responded that this had been done throughout the Act, i.e. Telkom has been specified throughout the Act. The SNO is just referred to as such since it has no name yet.

Clauses 13 and 14: These merely cleaned up the Act.
Clause 16: The clause introduces under-service area licences in areas where the teledensity is below five percent.

The Chair asked if the SMME's could be licenced from the Universal Service Fund.

The DDG said that it is debatable whether this should be done.

Clause 17: This clause introduces a Private Telecommunications Network. The two suggested in the clause are Edu-net and the Maritime and Aeronautical Radio Services (MARS). The clause allows Value Added Network Services (VANS) to operate virtual private networks.

VANS is a data service. It cannot provide voice telephone services but can lease this capacity from Telkom. This would enable them to create their private network so that they may provide services within this network.

The Chair asked how the ordinary person would benefit from this.

The DDG replied that it was an extension of services. Operators are now able to create networks. This extension of services benefits the consumer.

Ms Vos said that this clause needed to be written in plain English. She asked what precisely a Virtual private network was as opposed to a private network.

The DDG said that private networks were created by corporate entities for their own operations, e.g. Transtel's power lines extend beyond SA borders. They can therefore create their own infrastructure to enhance their own operational needs. (i.e. it is not created to serve the needs of the consumer).
Edunet, on the other hand, has very limited access to facilities. They therefore need help to enable schools to interlink and exchange communications. The virtual private network would provide the enabling facilities. They do not however have or create their own infrastructure (as is the case with private networks).

Ms Smuts asked how much the fiscus contributes to the process of linking schools.

The DDG replied that the Department had started to determine this but then realised that they had not included the cost of electricity. They are therefore still busy with these calculations.

Ms Vos referred to the 50% discount being given to schools. She stated that this did not mean much to schools that cannot even afford electricity. This would perpetuate a system in which one has information-rich children on the one hand and information-poor children on the other.

Ms M Magazi (ANC) stated that one has to consider whether the concept of 'free education' includes only books or if access to computers is also included in the concept.

Ms Vos added that they could be building inequality into legislation, as some schools will still not have access to these services.

The Chair stated that the Bill referred to all public schools. The government would have to raise the money, as one has to consider the benefits to the country.

Clause 18: The clause deals with interconnection agreements. Parties to such agreements may seek renegotiation after five years. In this way no party is locked into an unfair long-term agreement, as this would prejudice consumer rights.

The Chair asked what the regulator and the operator had agreed upon.

The DDG replied that he was not aware of the contents of the agreement.

Clause 21: This clause results from discussions in the colloquium. It provides for greater consumer awareness to ensure their protection, especially with regard to tariffs.

Clause 22: This clause creates a Telecommunications Mediation Committee to resolve disputes. The introduction is aimed at saving time and money. Matters may be referred to the Committee at the request of the Authority or either party.

Mr Magashule asked why the Chairperson's position was restricted to senior counsel. He stated that experience in this particular field was more important. He asked who determined if a person qualified as 'senior'.

The DDG replied that the person still has to have expertise and experience in the field of telecommunications. The term 'senior' counsel is a differential used in courts, which relates to a person's level of expertise. Many issues and disputes relate to the interpretation of the Act and therefore require a specialist. Legal issues are often the key to the discussions (as opposed to technical issues).

Ms Mtsweni asked why the Committee was necessary at all. She asked if the regulator did not have the capacity to deal these issues.

The DDG responded that ICASA was experiencing capacity problems but were in the process of ensuring that they had the capacity to handle some of these issues.

Ms Smuts asked if the Department had considered the need for an appeal mechanism for ICASA. This could then be used instead of mediation and arbitration.

The DDG answered that this had been considered and some issues could be dealt with in this way. However, the Department of Justice was very reluctant to allow the creation of special courts.

Due to time constraints, it was decided that the briefing on the remainder of the Bill would have to continue at a later stage. The Chair reminded everyone that the deadline for submissions was 19 September. He stated that the Committee did not want merely comments and criticisms but solutions as well. In addition, people had to indicate if they wished to make oral submissions.
Amendment to S53A:
Amendment to S53:
Amendment to S43:
Amendment to S41:
Amendment to S40A:
Amendment to S37:
Amendment to S35A:



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