Telecommunications Amendment Bill: hearings

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28 September 2001
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

28 September 2001

Chairperson : Mr N Kekana

Relevant documents


Telecommunications Amendment Bill [B65-2001]
MTN Powerpoint presentation
MTN submission
M-Cell presentation
COSATU/ CWU Submission
CUASA Submission
WorldCom and UUNet Submission
Internet Service Providers Association Submission
South African Vans Association submission
Multichoice and MNet submission
SMME Submission by Evan Scop Attorneys

Multichoice argued that granting Sentech the exclusive licence to provide multimedia services could have serious repercussions for operators who had invested substantially in this industry. MTN were of the opinion that the term ‘fixed mobile’ should be replaced by ‘fixed wireless’. The South African VANS Association criticised the fact that the Bill attempts to equate Virtual Private Networks with Private Telecommunications Networks.

COSATU and the Communication Workers Union in a joint submission opposed the liberalisation of the telecommunications industry and supported a monopoly by Telkom of basic telephone services. They expressed concern at the need to curb job losses and to provide for increased roll-out and universal services.

Communication Users Association of South Africa noted general dissatisfaction with the process involved in formulating the Bill. They emphasised the need for carrier selection and number portability to be available from May of next year and took issue with several definitions in the Bill as well as the mandated levy of 0.5% of turnover.

Mr Yunus Kahn represented a black empowerment consortium and noted their presence and interest in the process.

The Internet Service Providers Association raised what they considered to be grave infringements of the right to freedom of expression in the Constitution and opposed the domination of ICASA by the Minister as an infringement of s192 of the Constitution. They also regarded portions of the Bill as providing for arbitrary discrimination or expropriation without compensation and submitted that the unintended effect of certain definitions was to provide for anti-competitive activity in the industry.

WorldCom and UUNet indicated that WorldCom stood to lose R1.25 billion that it had invested in the industry if the Bill were to be passed in its present form, as the result would be to effectively eliminate VANS from the industry. They submitted that the Bill resulted in expropriation without compensation, infringed certain aspects of the right to freedom of expression and posed serious threats to the independence of ICASA.

Mr Silber representing several SMMEs noted serious dissatisfaction with the process of the Bill and noted a possible legal challenge. He expressed concern at the anti-competitive effects of the Bill and argued that its provisions served to legislate what Telkom had been unable to win in court.

The DBSA indicated their interest in investing in local ownership of telecommunications businesses and argued for state subsidised or protected investment. They further stressed the need for increased roll-out and US.

Multichoice and MNet submission
Ms C Mack dealt with the issue of convergence and the definition of a multimedia licence. She stated that the concept of bundled convergence services has to be promoted. This cannot be legislated for in a piecemeal manner. It is important that the four statutes dealing with the issue are incorporated into one Bill. With regard to the definition of multimedia as a digital broadcasting service, she stated that this was problematic as ‘broadcasting service’ is already defined in the Bill. There are many contradictions between the two definitions.

Mr J Naidoo, General Manager: Interactive Multimedia, dealt with the issue of interactive multimedia. He described the services, which were being launched or are about to be launched. These include:
- enabling a person to send SMSs and e-mail over the television
- interactive formats, like ‘Big Brother’. One is able to access data on each individual housemate with the click of a button.
-TV mail and shopping
This would be made possible by virtue of an infrared keyboard or remote and a TV modem.

It was explained that the Shoma programme was being developed in partnership with the Department of Education and the industry. One is able to broadcast the content of this programme all over the country, including rural areas.

Ms A Armstrong dealt with the impact of granting Sentech exclusivity. She stated that one should consider the other companies currently providing these services.

Mr M Moosa (ANC) argued that the issue of a licence to Sentech did not mean that this would be done to the exclusion of all other players.

Ms Mack stated that the effect of the language of the provision was that this would indeed be the case. The interpretation has to be based on the words used (irrespective of the intent). Ms Armstrong agreed, saying that there are entities that have provided services for years and businesses that have made investments, which they thought, were lawful. The wording of the provision makes these investments illegal, irrespective of what the intention was.

Mr Abram (UDM) asked exactly how operators providing multimedia services would be negatively impacted in terms of investments. He asked how granting Sentech a licence would serve as a ‘penalty for innovation’ to these operators.

The response was that more than R200m has already been invested in interactive multimedia. Ms Mack added that all Mr Naidoo’s work in the field of multimedia would now become unlawful. Retail stores already carried 50 000 of the products developed for the purposes of interactive multimedia. This had been done prior to the introduction of the Bill. If the Bill were to be passed this would serve as a disincentive to their company to innovate in SA. They would then prefer to spend time and money innovating in other countries on the continent.

Ms Niewhoudt-Druchen (ANC) said that despite the advances in technology, little has been done to improve access to the deaf and the blind. She added that she would not buy DSTV because there was no captioning for the benefit of the deaf.

It was explained that Multichoice purchases channels, which already has its own content. However this was not an excuse and the company would see catering for the deaf as a new challenge.

Ms M Smuts (DP) stated that if ‘multimedia’ is redefined as a telecommunications and not a broadcasting service they could invoke case law, which supports their view that granting Sentech a licence was an infringement on their right to freedom of expression.

Ms Armstrong responded that a change in the definition would still not solve the constitutional difficulties raised.

Mr R Pieterse (ANC) said that the provision does not state that the licence would go the Sentech exclusively.

Ms Mack argued that one could not provide telecommunications or broadcasting services without a licence. This, if read with S39 of the Independent Broadcasting Authority Act, implies that Sentech would be granted exclusivity.

The Chair asked if there was anything in current legislation that prevented them from operating interactive multimedia if Sentech were to be granted a licence. Was it not normal for a dominant power to attempt to protect the market from newcomers?

Multichoice said that it welcomed the competition, as they did not wish to be seen as a monopoly. There has been very limited penetration at this stage and the playing field is therefore still very wide. The problem is that Sentech should not be singled out, especially not by statute.

The Chair pointed out that, unlike Multichoice, Sentech had been created by statute.

Ms Mack reiterated the fact that Multichoice welcomed the competition, as it would serve as encouragement for them to perform better. The more the sector grows, the more their business will grow. Sentech should be encouraged to expand their business but should apply for their licence like everybody else does.

MTN submission
Due to time constraints the presenter made a very short presentation in order to allow for discussion. MTN proposed that the term ‘ fixed wireless’ replace ‘fixed mobile’.

The Chair stated that Vodacom has agreed to unlock their phones in order to encourage consumers to switch from one operator to another. This means that the consumer would merely have to change the SIM card.

The presenter stated that MTN would also do so if this were the standard in the industry.

Ms N Mtsweni (ANC) asked if MTN was supporting the Bill because of the acrimony between Vodacom, Cell C and Telkom. She asked what the contents of the Interconnection Agreement were.

The presenter stated that the agreement had been entered into at the beginning of the mobile industry. It had been a ‘gentleman’s agreement’ containing no real substance. The new agreement was based on the experience of the last seven years and was much more substantial. It contained a much closer reflection of costs.

The Chair stated that it was obvious that they did not wish to share the contents of the agreement. The public has the right to the content of the agreement at some stage.

The presenter replied that the agreement has to be approved by ICASA first. It is currently being considered by ICASA.

Mr V Gore (DP) asked if there was scope for a default interconnection agreement between operators

The presenter said that there was no default agreement, as this issue has never arisen previously.

Mr Gore asked the presenter to comment on the suggested change of ‘fixed mobile’ to fixed wireless’.

The presenter stated that the fixed mobile service has to be limited to specific geographical areas. Someone has to regulate to which areas these services are limited.

The Chair commented that fixed wireless is already provided for in a 1996 Act. There is a qualitative difference between what they are saying about fixed wireless and what is already in the Act.

MCell submission
The presenter read from the presentation document. M-Cell’s concerns centred on the policy on infrastructure sharing, carrier selection and pre-selection and the Universal Service Fund.

The Chair asked what happens to someone who has an existing Telkom line and wishes to use the SNO. He asked if the SNO would function as from Day one.

The presenter stated that without carrier selection and carrier pre-selection, the SNO would not be able to offer the consumer anything. They would only be able to offer data services. The licence will only be issued on 7 May 2002. They cannot even roll out a fibre optic network before then.

Ms Smuts referred to a situation where there is facility sharing. She asked why carrier pre selection would then be necessary if the SNO has already signed up the customer.

The presenter replied that in the case of infrastructure sharing, the customer may be expected to move all his business to a particular operator. With carrier pre-selection, the customer would be able to choose an operator on a call-by-call basis. Within two years, the SNO must have duplicated Telkom’s infrastructure. This would mean actually digging up lines leading to the home of a consumer. The duplication of infrastructure is therefore wasteful. The SNO should instead have the responsibility of accessing areas where there are no lines.

The Chair asked how much carrier selection and carrier pre selection would cost.

The presenter stated that the cost was not insignificant. If it was implemented over a longer period the cost would be more manageable.

Ms Mtsweni asked if they have considered the environmental impact of the duplication of infrastructure.

The presenter admitted that they had not done a study on this. There is however overarching legislation governing this issue.

South African Vans Association submission
The presenter referred to the defects in the current legislation. These include the definition of VANS (Value Added Network Services) and the attempt to equate Virtual Private Networks with Private Telecommunications Networks.

Ms Smuts commented that Telkom should not attempt to shut down a service on which the global economy rests. They should not provide all the VANS services. This could have serious legal implications.

The presenter stated that it is better to deal with such issues at this stage, instead of such matters appearing before judges and regulators.

Communication Workers Union (CWU) and Congress of South African Trade Unions (COSATU): Joint Submission
CWU’s Policy Objections
The Deputy-President of CWU, Mr Pillay, indicated the Union’s dissatisfaction with the general policy directives which pander to big business at the expense of the working class. Private companies who will be interested in profits and not in rural development will not resolve the problem of the low tele-density in South Africa. The Union felt that its previous submissions at the Colloquium had been completely ignored and that the Bill failed to adequately provide for black empowerment and universal service (US), and that it would simply perpetuate the telecommunication divide. They opposed foreign ownership of local telecommunication and argued for block-tariffs and cross-subsidisation.

COSATU’s Policy Objections
Ms Fiona Tregenna outlined COSATU’s vision for the future of telecommunication in South Africa. The COSATU submission focused on broad concerns and fundamental objections to the Bill. COSATU indicated their opposition to the policy of privatisation and listed four fundamental objections to the Bill:
The outright sale of Telkom
Foreign management of South African telecommunication
The commercialisation of Telkom
The liberalisation of the telecommunications market
Ms Tregenna stressed that US is a basic need and right of all South Africans and that access to telecommunication was a precondition for participation in a democratic society. Only 7% of black people in rural areas have access to telecommunication and a falling proportion of urban African householders have access to telecommunication. These figures were directly attributable to the high charges of telephone calls. Countries that were lagging behind South Africa in roll-out have now overtaken South Africa in the last 10 years.

Universal Service (US)
COSATU acknowledged that US would not be feasible if users cannot afford it, and that with the current problem of unemployment and low wages US would therefore be meaningless to the poor. COASTU objected to the high cost of line rental and local calls, while foreign and long distance calls were reduced in price, a tariff structure that favoured high income households. Ms Tregenna stressed the need for state funding and cross-subsidisation to make US a realistic proposition.

COSATU argued that competition would only worsen the high costs for the low income market while favouring high income households and businesses. Genuine US would be unattainable under the existing cost structure. COSATU favoured ongoing state ownership and regulation of Telkom. In a competitive market cherry-picking by the competitors would lead to the low tele-density majority being neglected.

COSATU supported the 50% discounted e-rate for public schools but argued that US should include the obligation to provide schools with internet access.

Concerned was also expressed at the scant attention paid to the issue of employment as roll out and expansion would only be possible if employment is growing and investments being made in training.

Monopoly on Basic Services
COSATU were not convinced that the proposed market structure would meet the needs of the majority of South Africans. While high-level service is important, they were opposed to competition in basic telephony. Ms Tregenna submitted that Telkom should have the sole responsibility for basic telephony and that there should be tight licensing conditions and ongoing monitoring and regulation. Foreign investors would have no interest in local development, but only in profits, and COASTU therefore objected to the Bill dropping the restriction on foreign ownership of the second national operator (SNO).

Ms Tregenna stated that COSATU was opposed to the privatisation of Telkom, as Telkom would be less able to provide basic services as more of it was sold. The fact that such large portions of South Africa have a tele-density of less than 5% is already an indictment against Telkom but is no reason to outsource. Small/Medium/Micro Enterprises (SMMEs) would be less accountable in providing basic services than a single national operator. In COSATU’s opinion it would be realistic to set a target of access to telecommunication by all South Africans within 5 years. In order to give everyone access to some use, a system of blocked tariffs must be introduced whereby the price increases with the level of use. This would enable cross-subsidisation, which is a recognised means of funding telecommunication internationally.

Regulating Authority
Ms Tregenna submitted that for the regulator to perform its functions effectively the Independent Communication Authority of South Africa (ICASA) officials should be appointed in a transparent and democratic manner and that Parliament remained the best forum for this process. The creation of a Commission for Conciliation, Mediation and Arbitration (CCMA) would simply lead to forum shopping.

Ms Smuts (DA) asked whether COSATU had considered studies conducted overseas on the effect of liberalisation of the telecommunications market and indicated that it seemed that COSATU wished to return to old-fashioned technology such as manual exchanges.

Ms Tregenna replied that COSATU had in fact considered overseas studies but were sceptical of such research as studies could be used to prove "almost anything," especially when funded by big business. COSATU did not believe that there were any countries in a situation comparable to South Africa’s that had succeeded in extending access and increasing tele-density except where the initiative was state-driven. COSATU indicated that they were willing, however, to make such foreign studies available to the Committee at their request.

Mr Pieterse (ANC) asked what effect the SMMEs can be expected to have on job losses. He also pointed out that job losses were an inevitable consequence of technological advancement.

Mr Pillay responded that 17 500 CWU members had lost their jobs and that co-operation with SMMEs had only resulted in the re-employment of 2000 of those people. Those retrenched by Telkom can therefore not realistically expect to be employed by any of the new SMMEs. With respect to technology, Mr Pillay noted that the CWU did not want wasted technology dumped in South Africa. The appropriate technology should be introduced at a reasonable price.

Mr Kekana thanked COSATU and CWU for their submissions and stated that he would welcome more submissions from labour. He also pointed out that the Committee intended hosting Telkom before the close of discussions. In attempting to clarify COSATU’s position Mr Kekana said that he understood them to mean that they were not opposed to competition provided that it is regulated in such a way that prices can be kept down. But then they also advocated a state monopoly on basic services. Did this mean that private operators would then not be permitted to offer services in rural areas if they felt there were profits to be made there? The Chair also stated that he would welcome more input on COSATU’s proposed tariff structure.

Ms Tregenna stated that COSATU had interacted with ICASA in various ways on the tariff structure and they welcomed innovations such as the residential sub-basket. She re-iterated that when it came to basic telephony Telkom should have a monopoly. The introduction of private players would simply undermine low prices and roll-out. Regulation alone would not be adequate as is already evidenced by the problems experienced in regulating Telkom.

Communication Users Association of South Africa (CUASA) Submission
Policy Objections
Mr Ray Webber of the Western Cape Chapter of CUASA presented the submission. Mr Webber began by indicating CUASA’s dissatisfaction with the overall process that had led to the formulation of the Bill. Despite repeated submissions at several stages of the process CUASA was of the opinion that the current content of the Bill indicated clearly that their submissions had been ignored. Actions taken recently by Telkom had been heavy-handed, and this was especially true of their withholding of services to value added networks (VANs) and internet service providers (ISPs). CUASA’s main concerns were in the following three areas:
Number portability
Carrier pre-selection and carrier selection
Private telecommunication networks (PTNs)
Number portability affects all users of telecommunications and will be absolutely essential to the survival of SMMEs. The SNO will also be at a tremendous disadvantage if number portability is not provided for from day one. Carrier pre-selection and carrier selection is also essential if the SNO is to have any real chance of survival. Carrier selection at a minimum should be obligatory from May next year and carrier pre-selection obligatory from the latest May 2003.

Mr Webber pointed out that CUASA had difficulties with several definitions in the Bill. "Voice" has not been defined in the Bill and requires definition due to the heavy restrictions placed on it. The use of the word "interconnected" in s41(1)(a) also requires definition. Clarification is needed on the subject of VANs licences as the current implication from the Bill is that a VANs licence ranks higher than a virtual private network (VPN) licence, and yet VANs is not permitted to carry voice. CUASA also questioned why the Bill focuses so exclusively on voice over internet protocol (VoIP). Mr Webber pointed out that VoIP is simply one type of technology and that other better types (such as voice over ATM and voice frame shift) remain unregulated by the Bill.

CUASA argued that the lack of definition of "inter-connected" in s41(1)(a) meant that the user of any network interconnected with Telkom in any way would then require a PTN licence. Mr Webber pointed out that not only would such a licence be pointless if everyone was required to have one, but that ICASA would also be flooded with PTN licence applications which they would be unable to process in a reasonable amount of time. CUASA was also of the opinion that PTN licensees should be exempted from paying US fees.

Mr Webber submitted that the stipulated maximum contribution of 0.5% of turnover would be excessive and would prevent the majority of SMMEs from being able to compete effectively. Clarification was required on the difference between voice transfer and video conferencing as it was currently unclear whether video conferencing would count as voice transfer if the picture function were not used while video conferencing.

Mr Pieterse (ANC) asked what effect CUASA felt the Bill would have on people living in the Karoo and what their position was on the CCMA.

Mr Webber replied that it was CUASA’s opinion that the more services and the more competition created the better the result for the market. ICASA needed to be empowered and regulated, but the introduction of another body such as the CCMA was not necessary. Mr Webber said that this would be the better position for the consumer as well, as any unnecessary structures would increase the cost to the consumer.

Mr Kekana urged the next parties who were making submissions to be as brief as possible and to summarise their salient objections.

Eurotel, Royal Africa Investments Holdings
Mr Kahn indicated that he acted for a black economic empowerment consortium consisting of Eurotel, a German company employing 40 South Africans, Royal Africa Investment Holdings (Pty) Ltd, Wandie Motlana, Yusuf Mullajee, himself and Richard Kawie. Mr Kahn wished to note the presence of this consortium and indicated their interest in the proceedings and their desire to provide a separate international telephone service in Southern Africa.

Mr Kahn indicated that their consortium required the Bill to make provision for service providers to link in with Telkom and the SNO for international telephony via a carrier system. As an alternative, the consortium proposed that the Bill make provision for the privatisation of the Telkom telephone exchanges and for VoIP in areas with a tele-density of more than 5%.

Internet Service Providers Association (ISPA) Submission
The submission was presented by Mr Frank Snickers of the Johannesburg bar. Mr Snickers indicated that the Bill raised two broad concerns, namely:
A grave disruption of existing rights held by ISPs
Serious freedom of expression concerns

ISPA submitted that the Bill entails nationalisation of property previously owned by ISPs in favour of Telkom in a way that amounts to expropriation without compensation. They felt that the broadening of the definition of "public switched telecommunication service" (PSTS) would result in exclusivity and the swallowing of services previously excluded from this definition. The definition of VANs also would have the unintended effect of placing them within the definition of PTN and depriving ISPs of previously lawfully provided VANs.

Freedom of Expression
The Act provided in certain forms for the restriction of the carrying of VoIP. Now, in terms of the Bill, Telkom and the SNO are permitted to provide VoIP in competition to VANs operators while the VANs operators may not provide VoIP. This amounts to an unjustifiable restriction of the Constitutional right to freedom of expression.

Impact on ICASA
The Bill moves away from established ICASA terms, definitions and jurisprudence and in doing so creates uncertainty and volatility which will affect foreign investment in telecommunications. For example the introduction of the undefined phrase "electronic transaction service" in the definition of VANs in s40 will create chaos. Furthermore the exclusion of VANs from PSTS appears to have been removed and yet the licence requirement for VANs remains.

ISPA also noted their grave concern with the complete destruction of the independence of ICASA in favour of domination by the Minister. This move would not only derail long term government policy but also violates South Africa’s World Trade Organisation commitments. No provisions exist aimed at preventing Telkom and the SNO from taking self-help measures in denying services to VANS without first having recourse to ICASA. The Bill therefore has a direct effect on s192 of the Constitution which mandates an independent broadcasting regulator.

Economic Effects
S32A(8) appears to limit resale by PSTS in a way that will have a devastating effect on VANs and ISPs. The definition of VANs is vague enough to allow its inclusion as an end-user and prevent VANs from purchasing from Sentech.

ISPA was also opposed to the use of the tern "discount" with reference to the e-rate as it implied that ISPs would have to pay out of their own pocket for the reduced rate resulting in double taxation. Clarity was also required as to the type of reciprocity envisaged by the Bill between PSTS and VANs with respect to interconnection.

WorldCom and UUNet Submission
WorldCom and UUNet were represented by Mr David Meintjes and Ms McKenzie. Ms McKenzie began by indicating the strong shift away from the existing policy that the current Bill introduces and noted that under the Bill’ provisions WorldCom stood to lose R1.25 billion that it had invested in UUNet on the basis of the existing policy. UUNet submitted that the Bill amounted to expropriation without compensation or arbitrary discrimination in the way it defined "telecommunication facilitiy", VANs, VPNs, and PSTS.

UUNet also objected to Telkom and the SNOs exclusivity with respect to VoIP and pointed out that the effect would be anti-competitive activity and a violation of the Constitutional right to freedom of expression. Similar difficulties were raised by the definition of resale.

Ms McKenzie submitted that the usurpation of ICASA’s powers would have a detrimental effect on foreign investment and that the undermining of the perception of ICASA as impartial and unbiased would similarly impact on other Chapter 9 institutions.

The net effect of the Bill would be to totally eliminate VANs providers from the telecommunications sector, which would not only have a large negative impact on economic development but would also constitute a serious violation of s16 of the Consitution.

Mr Kekana pointed out that many of the objections raised in these submissions had also arisen in other submissions heard earlier by the Committee and consequently some of these issues would not be dealt with again with the groups represented.

Mr Gore (DA) asked what Ms McKenzie’s position was with respect to ICASA jurisdiction versus that of the Competition Authority.

Ms McKenzie responded that ICASA has a detailed knowledge of the pricing and tariffs of services and these should therefore remain within ICASA’s jurisdiction. However, the Competition Authority should regulate the anti-competition aspects as it has the mechanisms and the ability to enforce anti-competition regulations and impose penalties.

Mr Kekana (ANC) asked whether there were any lessons to be learnt from the granting of the third cellular licence and whether that did not prove that there should be a tightening up of the regulatory authority. In his opinion, given the Cell C saga, to leave the law as it currently stands would be undesirable. The Bill now describes PTNs and provides for the conditions for licensing. Should s41(1) then be elaborated further in the light of competition?

Mr Snickers responded that South Africa had a workable and well-entrenched notion of independence and impartiality as being the absence of undue influence. If the Cell C licensing demonstrated anything it was that tightening up of the relationship between ICASA and the Minister would not help. The problem lies in the perception of a lack of independence. By bringing the regulator under the domination of the Minister this problem is being exacerbated and will taint the independence of all other institutions such as the Independent Broadcasting Authority (IBA). What would be useful would be to regulate clearly the role of each.
Ms McKenzie added that while policy directives were clear that VANs have the right to provide VPNs, this is not provided for expressly anywhere in the Bill.

Mr Kekana said that the Committee would welcome further correspondence from all the parties and that what was required was specific proposals rather than broad policy objections. He indicated that it was the intention of the Committee to move the process forward rather than delay now.
Mr Snickers responded enthusiastically indicating that ISPA would continue to engage with the submission process.

SMME Submission
Mr Michael Silber of Evan Scop Attorneys indicated that his firm was representing a number of named and unnamed SMMEs that had investment interests in the telecommunications industry. Mr Silber began by stating that the Bill represented a blatant attempt to legislate what Telkom had thus far been unable to win in court. He also noted that although manufacturers were not represented amongst those making submission their interests would also be affected by the Bill’s provisions.

Mr Silber argued that the definition of "resale" would restrict the resale of bandwidth to Telkom and the SNO thus favouring monopolies over SMMEs. Clarity was therefore required as to who may be involved in resale. With respect to deregulation, Mr Silber saw the Bill as returning to the position under the 1958 Act.

Mr Silber indicated that their clients were so dissatisfied with the process by which this Bill had been formulated and that they took the matter so seriously that they would seek redress in the Constitutional Court if necessary if this Bill was passed in its current form.
Mr Kekana interjected and asked Mr Silber to explain what he meant by dissatisfaction with the process. Mr Silber replied that the policy debate had been completely ignored and the Bill had been placed before the country with a ridiculously short time period in which to respond with submissions. His clients felt that the public had had almost no opportunity to be heard.

Mr Silber proceeded to summarise the submissions on behalf of his named clients and said that Orion Telecoms sought the removal of the restrictions on least cost routing which was a very popular and common feature in South Africa. Multiserve objected to Telkom’s power under the Bill to determine who to grant bandwidth to. On the whole, the opinion of his clients was that the Bill created huge economic uncertainty.

Mr Kekana expressed concern at the threat of legal action. He stated that the Committee had allowed two weeks for submissions, which was the normal practice in Parliament. Advertisements had been put in the newspapers and all reasonable steps were taken to ensure that the public was aware of the process.

Development Bank of South Africa (DBSA) Submission
Ms Heloise Emdon apologised for the lack of a written submission and stated that the DBSA was wanting to invest in local ownership of telecommunications networks. She cited examples of farming families in the USA that had started very successful telecommunications organisations. She stressed the need for government security or state funding in order for the DBSA to invest in such ventures and argued that local ownership could boost the development of telecommunications in low tele-density areas. The DBSA had conducted a study which had listed more than 6000 towns in South Africa where the tele-density was less than 5%.

Ms Smuts (DA) pointed out that despite Telkom’s roll-out many lines to rural areas had been disconnected because users had been unable to afford the service. How would local owners overcome similar problems?

Ms Emdon replied that if Telkom had US for emergency services and the like, then rural communities would still be able to receive calls from relatives and friends in other parts of the country. Local ownership would also spark novel and creative funding schemes.

Ms Mtsweni (ANC) asked Mr Silber to clarify the objections to the process in formulating the Bill.

Mr Silber said that he wished to cast no aspersions on the Committee or on the Department of Communication. His clients merely noted that the product of the process was suspect. While the Department was to be commended for its admirable intentions the resultant Bill is questionable.

Mr Kekana responded positively to the submission by the DBSA and asked Ms Emdon to provide the Committee with a written submission. He stated that the Committee would now spend the following week studying the submissions and that they may call on some of the submitters to attend personally as they consider the submissions in detail. He encouraged those present to make written formulations rather than broad suggestions of policy. He expressed regret at the fact that the public were not aware of how important the submission process and the National Assembly was and said that Parliament was doing everything possible to bring the public into the legislative process including the use of radio and DSTV. He also assured the parties present that the Committee wanted to safeguard any existing investments in the telecommunications industry. The Committee valued and was grateful for the input received.



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