State of the Nation Address & Review of Chapter 9 Institution

COMMUNICATIONS PORTFOLIO COMMITTEE
16 FEBRUARY 2007
CONSIDERATION OF THE STATE-OF-THE-NATION ADDRESS

Chairperson: Mr G Oliphant (ANC)

Audio Recording of the Meeting

SUMMARY
The committee met to go over the President’s State-of the-Nation’s address and to address the issues that were directed to the committee. The committee also had to response to the issues concerning ICASA and will be presented to the minister of communications Mr Kadar Asmal.
           
MINUTES
Issues concerning ICASA
The Chair gave a brief overview of the document that would be put forward to the minister Mr K Asmal on the role of ICASA and issues that concern ICASA. The document also looks at the centrality of ICASA and the funding thereof. He said that the committee had been requested to consider the funding by Fescues one and two.

Adv P S Swart (DA) wanted to know if there was reference in the document about the need to renew the public model of ICASA.
 
The Chair responded that he included a letter written by committee member Ms D Smuts (DA) because it states that point.

Mr M R Mothlaloga (ANC) wanted to add to the report what the constitution says about the regulator and the implication of this regarding the independence of ICASA. He also requested that the funding of ICASA be discussed on the basis of making ICASA a fully capitalized in order to attract the right skills and prerequisites. he said that funding should also be looked at in terms increasing the stagnant salaries of employees.

Mr R Pieterse (ANC) wanted to know if ICASA is totally in the ambit of a Chapter 9 body. He also raised the issue of how to fund ICASA better than the way it is currently been funded. He wanted it to be made clear in the document that the committee does not necessarily agree with the view that ICASA should retain licenses and fees collections.

The Chair responded that the introduction of the document answers these issues.

Mr Mohlaloga requested that the constitution be quoted in the document to make it clear of what the constitution says.

Comments on the State-of-the-Nation Address.
Mr Pieterse commented on the high cost of telecommunications. He suggested the committee to have an approach to assess what is in the competition that will bring down the prices. He also wanted to what would be the committee’s contribution to bringing down the prices.

Mr Mohlaloga said that the President made reference on mobile operators and Telkom to set up a task team which is to work on a proposal on the reduction of prices on page eleven of the speech. The second point he raised is about business process of outsourcing that Telkom will apply special low rates for international bandwidth to ten development call centers as part of their effort to expand the business process of outsourcing centers. He referred to an earlier debate that committee had saying that they had lost the opportunity to create more than     500 000 jobs through call centers precisely because of the cost of telephones. Although Telkom has attempted to deal with these issues he feels that this is not sufficient. He said that he hopes the task team will deal with this issue. He further raised the issues of skills within the ICT environment saying that institutions like ICASA that is unable to retain skills. He commented on what the President said about unemployment among young people. He said that if one were to look at the profile of companies like MTN and Vodacom one would see that young people dominate the communication sector. He pointed out to the increase on spending of research and development and asked if they are unable to develop skills at capacity in terms of research and development to ensure that the country is able to produce affordable equipment like laptops. He further raised the issue of broad base black economic empowerment. He said that in this context they would have to consult with the BEE charter council on adversity to have a look at their charter processes and so on.

Mr Swart remarked on the pricing and competition of telecommunication saying that when Telkom was liberalized the ambit of pricing was put in the economy itself. He said that he was not positive that the cutting of prices would result in lower costs. He mentioned that the President was not very outspoken about telecommunications particularly apart to the remarks discussed. Referring to page four where the President talks about government commitments to implement detailed programs intended to of the second from there to reduce the cost of doing business in our country. He further said that with the cost of doing business like buildings and labour systems government cannot do anything specific to take down costs. He said that major companies complain about the cost of telecommunications, which make it very expensive to do global business. Referring to the seventh bullet he said that the cost of telecommunications does impact on the second economy

The Chair said that the President referred extensively to the issue of poverty reduction and job creation. He said that it is important for the committee to engage in these issues and to see how this sector deals with such issues. He pointed out to the issue of the lack of vacancy in the sector. He raised the question of why there was lack of vacancies in the Department of Communication and ICASA. He said that there are a lot of institutions in the sector that are trying to deal with the issue of skill shortage but the impact of this is unknown. He further said that the President raised the contest of the GCIS on the question of the quest of rollout of MPPCs. He said that competition was one thing that could help but it should not be mistaken for collusion. He said that the committee would now have to ‘take the bull by its horns’ and engage with the task team and the public in general to assess where the bottleneck is. He said that there was a need to debate this matter further.

Mr Pieterse raised the issue of what the committee was doing on the issue of cost. He agreed that it was imperative to have a public discussion on this matter. 

Mr Swart mentioned that the big telecommunication companies make enough profits to develop skills.

Mr Mohlaloga said that the sector is dominated by monopolies. He wanted to know how to best leverage Telkom so to respond to issues like the digital divide and issues of universal service and access. He said that is why the private sector came to help in. He further said in a market where there is competition there is a need for a strong regulator to deal with issues of competition and pricing.

Ms L E Yengeni (ANC) said that the committee should engage everybody in a public hearing to deal with issues. She said that the issue of skills should not be left to the industry. She said that the committee should have the institutions train a certain number of individuals in a specified period. She further said that individual trained in the industry should be placed in the various positions for which they are trained.

The Chair mentioned that the President raised the issue of Batho Pele campaign at local government level. He said that the committee should check the impact of that campaign. He raised the question of Nation Youth Service where the number is to be increased to at least   20 000 through government departments and the DOC’s future program to attract young people in the ITC sector. He said that the committee should also look at the impact of this. He said that it is important for the committee to look at what the 30^th anniversary of the banning of The World and The Weekend newspapers means to the democracy and how it enhance the constitutional resolve, expression and so on.

Mr Pieterse raised concern over the use of cell phones saying that there were no specifications on the use of cell phones and airtime. He said that it was unfair that airtime should expire after some time of no usage and that there was no warning of this.

The Chair responded that the committee was waiting for Vodacom to report back on the issue. He said that he would check with the Advertising Standards Authority on the validity of providers to use the packaging without any warning about the expiry date of the airtime.

Mr Mohlaloga also responded that cell phone providers do let the user know of the date of expiry when you dial a certain number to check how much airtime one has. He said that the critical issue was to look at the validity of the expiration of airtime at all. 

The Chair went back to the issue of crime saying that they have to look at the reliability of surveillance equipment like CCTV. He further said that media is a powerful tool which can be used in the aid to combat crime as well as poverty, unemployment, HIV/AIDS and health issues

The meeting was adjourned.