ICASA Progress Report

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Communications and Digital Technologies

19 September 2000
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Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
19 September 2000
PROGRESS REPORT BY ICASA
 

Documents handed out
Presentation by ICASA (see Appendix 1)

SUMMARY
The merger between IBA and SATRA in order to forge the independent Communications Authority of South Africa has been on the cards for some time but it is fraught with problems. Upon establishment in July 2000, ICASA was confronted with two different structures and practices governed by two different Acts. There are still two different budgets, phone numbers, policies and practices. Some personnel have resigned because of merger difficulties. It is crucial that the two sets of laws which applied to the two authorities in the past are streamlined.

A third cellular operator is desirable because it will bring increased competition and possibly lower prices. Accomplishing this should be put on the fast-track. As Nextcom has withdrawn its review application against the Regulator there are now no obstacles to granting a licence to a third cellular operator.

 

The importance of the Initial Public Offering of Telkom in the fourth quarter of next year was stressed by the Committee chairperson.

The three ICASA councillors who will be relieved as members of the Council in two years time are Ms Libby Lloyd, Ms Yasmin Carrim, and Mr Willie Currie. The decision was reached by drawing lots.

MINUTES
General introductory comments
Chairperson Ned Kekana said the Committee should focus on the community media sector as a whole. They have a responsibility to ensure that the Media Diversity and Development Agency is launched and it must introduce new voices and new media at a community level. It will be a good idea for ICASA and GCIS to have hearings on this. They must focus on the challenges in this sector.

ICASA must try to introduce a stable regulatory environment. The Telkom IPO (Initial Public Offering) next year is a test. ''We fall or succeed according to the IPO''. For this reason the Committee has a huge responsibility to ensure that the product is unassailable. Telecommunications will have to work with the Minister of Public Enterprises in this regard.

ICASA must ensure the restructuring of the SABC Charter. The Chairperson said that he was not happy with the current pace of restructuring the SABC.

The Committee must also focus on the issue of the Internet next year. The green paper on e-commerce is underway. They also need to increase their understanding of issues like pornography, and computer crimes in respect of the Internet. They could have some kind of hearings on this.

Broadcasting and violence on television is also an important issue. The IBA has focused on this in the past [and ICASA should continue to do so].

Members' response to Chair's introduction
Ms Smuts (DP) said that community broadcasters were voicing extreme frustration. [She was referring to the fact that community radio stations were having a march that day to protest about the slow pace of licencing community radio stations.] She commented that the protestors had a valid case because the Committee said that they would talk to the IBA about the problem, but they did not. She asked if the marchers were going to bring a petition.

She continued that the Telecommunications Act in SA needs to be reviewed. SA is falling behind in the telecommunications field. The Committee should hold public hearings with telecommunication players and the internet community. She asked when the new draft of the Telecommunications Act was going to be drawn up, and if there is no such thing on the horizon then could the Committee start hearings anyway to get the process started?

The Chairperson responded that the community broadcasters were having a march but the march was not confrontational. They are not unhappy with the Committee they are merely registering their protest. There is however pressure on the Committee to do something. They must hear from the players and they must take the community media seriously. They might have to amend laws.

The State Law Advisors had indicated that the Telecommunications Act is not going to be fast-tracked. Therefore the Committee must not expect it to come before them this year. They can line up community hearings for the first quarter of next year.

The Chairperson noted that they can send a message to the marchers now that the Committee will receive their petition and meet with them.

An ANC member said that the Committee should rather receive a memorandum from them and then the memorandum can be forwarded to ICASA. The Chairperson said that ICASA was present and if they wanted to, they could meet with the marchers.

Mr Mandla Langa (the Chairperson of ICASA) said that they would prefer to meet with National Community Radio Forum (NCRF) and the Freedom of Expression Institute (FXI). They could then meet under mutually beneficial circumstances.

The Chairperson said that if ICASA was not ready to meet with the protestors now then they did not have to. He added however that the regulator must address this issue (especially if the community broadcasters have a case). The Committee wants to encourage contact between the community and the regulator. The regulator must pay attention to this issue. As ICASA is not ready to talk to them now, the best that the Committee can do is to receive a memorandum from the protestors and they will have to wait for a response.

ICASA councillors who will be relieved of their duties in two years
In terms of the rules, three councillors of ICASA will be relieved from being a member of the Council after they have served the council for two years. The decision as to which councillors would leave was done by drawing lots. The Deputy Speaker and the Secretary of the National Assembly arrived to do this. The names of all the councillors were placed into a box and three names were drawn. The councillors who will be relieved after two years are:
Ms Libby Lloyd, Ms Yasmin Carrim, and Mr Willie Currie.

ICASA presentation
Mr Mandla Langa observed that there are now fewer councillors fulfilling the same mandate as IBA and Satra had done in the past. ICASA has to integrate the previous authorities into one strong regulatory body. In light of the fast changes in the broadcast environment, this is an important task. In making its decisions ICASA is influenced by socio-political interests, profit in the industry, and the expectations of communities. Mr Langa noted that ICASA spends more time on the community radio industry than any other regulatory function.

The regulations of the Telecommunications Act and the Independent Broadcasting Authority Act are different. Telecommunication regulations lie with the Minister while the IBA could make their own regulations. ICASA must ensure that the two are adhered to. Government must consider streamlining the Acts for the purpose of expedience. This is crucial. Mr Langa also noted that ICASA must be independent of government in accordance with the Constitution.

1) Vision for regulation in SA
ICASA must:
- establish new regulations.
- be effective, independent, and provide leadership in telecommunications.
- develop a competitive framework for the telecommunications industry.
- ensure that they empower the historically disadvantaged groups.
They want to be proactive.

2) Activities
ICASA was established on 1 July 2000. Upon the formal establishment of ICASA they were confronted with different structures and practices governed by the two Acts. There are still two different budgets, phone numbers, policies and practices. Many personnel have resigned because of merger difficulties.

The Auditor-General extended the 99/2000 audit of Satra to include the period until the end of June 2000.

A CEO has almost been appointed. There are 3 likely candidates. They are now in the process of making a final decision. Councillor Smuts is currently filling the position of CEO in the interim. The problem is that the councillors are spending too much time on administrative merger issues and less on policy matters.

By the beginning of the 2001 financial year they will need to have one structure. It is important to have the budget to do this. They have submitted a budget to the Minister to show what they will need in order to merge.

According to the Public Finance Management Act, they are aware that they will need an internal auditor and an audit committee amongst other considerations.

Backlog - They are dealing with a backlog from the previous authorities. The backlog work includes the following:
- They have completed most of the 4 year licences for community radio stations. However, this must still be done in KwaZulu-Natal, the Western Cape, and Gauteng. They are trying to expedite licencing applications. Some licencing had to be postponed while they handled a court challenge from Radio Pretoria. They have also experienced a problem in that there are sometimes many competitors for one frequency. This is a problem mostly in the more urban rather than rural areas.

Telecommunications - in this field there are a number of processes to be completed. One example is licencing the third cellphone operator. This was halted by litigation by Nextcom. However Nextcom withdrew their application for a review of the decision made by the Regulator so ICASA should be able to complete the third cellular licence process soon.

Vodacom and MTN made an application for access to the 1800 spectrum. This application was for competition reasons. Vodacom and MTN have now taken them to court challenging this decision. ICASA is considering the possibility of swopping some of the 900 spectrum that MTN and Vodacom are licenced to use in exchange for access to the 1800 spectrum.

ICASA is involved with many court cases which were inherited from IBA and Satra. They endorse the rights of players to challenge their decisions but their budget must cover litigation costs. Mr Langa noted that they need legal precedents on much of the work because regulation in many areas is new since the technology is new.

Future priorities
The Communications Bill could change processes they must adhere to. They want set time frames for this financial year.

Some priorities in terms of the IBA Act:
- restructure the SABC. This involves transfer of ownership and licencing.
- local content review
- resolve the issue around sports broadcasting rights
- ownership review (foreign/local ownership limit)
- regional/private television
- subscription broadcasting
- community radio broadcasting
- community television
- monitoring local government elections (they are getting legal advice on this)

Some priorities in terms of the Telecommunications Act
- Telkom
- Initial Public Offering (IPO)
- Introduction of second national operation
- Determine tariff policies
- Spectrum pricing
- Implications of e-commerce for regulation
- MTN/Vodacom Community Service Obligatory Authority

These responsibilities exist in addition to continual licencing and monitoring processes. The industry must be internationally competitive.

Discussion
Dr Mulder (FF) asked if there was a time limit within which to appoint the CEO.
Mr Langa replied that they were reaching finality on this and the CEO should be appointed within one week.

A member of the ANC noted that key personnel were resigning. She asked if these positions were vacant.
Mr Langa replied that there were vacancies in both divisions. They have advertised these vacancies.

Dr Cwele (ANC) asked if mechanisms were in place to meet the requirements of the Public Finance Management Act.
Ms Lloyd replied that the CEO will be at the helm of the restructuring process. An internal auditor is needed for both organisations. The one from the IBA resigned before they took over. They are using the PFMA framework and they are looking at the requirements. The CEO's job is outlined partly in the PFMA. They are using this as a job description for the CEO. They are aware of the PFMA and do consider it.

A member of the ANC asked if they had some way to measure whether they were overstaffed or not. He asked if personnel would be retrenched.
Mr Smuts replied that they must make an assessment of the people they have and what they still require. They are trying to ascertain the capacity of the staff they have. Convergence is addressed in the new authority. Some areas such as financial control need to be collapsed into one. There will be a merger but this will be done gradually. He said that there is not necessarily too much staff. This is not a foregone conclusion. He admitted that there is a lack of capacity in many areas and training is required. There is also an imbalance in the funding. There is not enough money to do projects. Thus, they either need more money or they need to cut costs somewhere.

Mr Maserumule (ANC) commented on the large amount of litigation that they were involved in. He asked if they considered establishing a mediation mechanism to deal with this before matters went to court.
Ms Carrim responded that they inherited their litigation from the two previous bodies. The Authority made a ruling and one party was unhappy with the decision. The unhappy party took the Authority to court. The litigation they were involved in is not aggressive litigation on their part. They anticipate that they will always be taken to court because there will always be someone that is unhappy with their decision on a matter. They would however like to settle matters out of court. She added that they need general jurisprudence of the regulatory role.

The Chairperson asked for clarity on the Radio Pretoria court case and what the implications of this case would be.
The reply was that Radio Pretoria wanted simultaneous translation of hearings. IBA offered staff to do the translations but Radio Pretoria wanted professional translations on the grounds that it was their constitutional right. The IBA however did not have the budget to accommodate them.

Dr Mulder asked if frequency and licencing was the same thing [ie. can ICASA refuse a particular frequency but still grant a licence, perhaps for another frequency?]
Ms Carrim replied that the Authority identifies the frequency. People then apply for a particular frequency. They do not have the flexibility to simply award another frequency.

Dr Cwele asked what is envisaged in the Act in respect of subscription services.
The panel replied that the IBA drafted a position paper on this. This can only be finalised when the Communication Bill becomes an Act (it will take roughly 3 months).

Third cell operator - Ms Smuts asked what the factual position was with the third cellular rights. She commented that it seemed as though the competition had been bought off (referring to Nextcom's withdrawal of their review application in the Pretoria High Court). She said that there was a potential problem that the licence was allocated on the basis of other rules. She also noted that there had been reports of some kind of linkage with an arms deal in Saudi Arabia. She asked if this was true because if it was then it presented a great potential legal problem.

Mr Currie replied that they are still in the process of establishing facts. Nextcom withdrew its review application in the Pretoria High Court. He does not know if Nextcom and Cell C came to a settlement agreement. Because the review has been abandoned, the Minister can proceed with her decision. Now they can grant Cell C's licence. Granting a third cell operator is a positive step in terms of telecommunications. It is not clear if it will lead to legal problems. He said that he did not have any information on any arms deal therefore he had no comment on this. From a regulatory point of view, it is desirable to have a third cell operator.

The Chairperson commented that having a third player will mean a better telecommunications environment because there will be more services for the public. It will perhaps bring lower prices and it will increase competition. This should be put on the fast-track.

Spectrum issue - Dr Mulder asked if they refused MTN's application on the basis of fair competition. A member of the ANC asked if the 900 spectrum was already exhausted. The Chairperson asked if they were going to review the 1800/900 spectrum decision and whether they would perhaps allow access but oblige the incumbent to have conditions attached to the 1800 spectrum.

Mr Currie said that the Vodacom application was denied on the basis of competition and not on technical grounds. The 900 spectrum is full. MTN and Vocacom hold most of the 900 spectrum. (MTN and Vodacom have 11 megahertz each. The South African National Defence Force have 3. That covers all that is available.)
In addition to this they now also want access to the 1800 while a third (and possibly even a fourth cellular operator) has no access to the 900. Therefore the Regulator denied them access to the 1800 spectrum to create a better competition environment. However, the 1800 is better for an urban area because it has capacity for things such as the internet. The 900 spectrum is better for a rural area.

Ms Carrim said that they will consider allowing MTN and Vodacom to swop some 900 spectrum for 1800 spectrum. The public process invited representations on the swop of spectrum. The guiding principle is that they must ensure fair competition between the third cellular operator and formal operations. Licencing conditions for the third cell will revisit licencing for incumbent cells too. For the incumbent cells they can build in a different category of licences to the third cell and in this way they can vary the licencing regulations.

An ANC member asked if ICASA would not be opening themselves to litigation if they refused them from taking part in the 1800 spectrum.
The panel replied that they will not refuse, they will consider which licencing conditions must be attached to it. In any event they will often be taken to court because one party will always be unhappy with their decision.

A member of the ANC commented that every mobile operator should have access to the 1800 spectrum because it offers some services which the 900 does not.

VANS (Value Added Network Services) - a member of the ANC asked what VANS was and how Black Economic Empowerment fits in with VANS.
Mr Currie replied that defining VANS was complicated. VANS is something which arises from the use of computers over phone lines, for example Automated Teller Machines (ATMs) and internet service providers are Value Added Network Services. Value is added through manipulation of computers and protocol.

Telecommunications law - Dr Mulder asked if the technology was running at a fast pace, who must take the initiative to keep SA ahead?

Ms Smuts (DP) said that the 1996 Telecommunications Act was the basis of the problem. Satra and ICASA have made good regulations to get around the problem. The Ministry however is not doing its job. Therefore Parliament should take the lead by holding public submissions.

Dr Cwele said that Ms Smuts was oversimplifying a complex matter and asked her to withdraw her statement but she refused.

Transgressions - The Chairperson asked what the councilors were doing to ensure that operators complied with conditions.
Ms Lloyd replied that they monitor in terms of spot checks. Another check is the complaints which come from the industry. They have an annual monitoring report on all licences. Currently they are dealing with e-TV which may have breached regulations in terms of provisions regarding programming. They are in the process of looking at this. Ms Lloyd noted that there are no resources to monitor the SABC Charter when it comes into play.

IPO of Telkom - Mr Smuts observed that Telkom has had the advantage of exclusivity. Now it is coming to an end and a competitive future is envisaged.
Mr Langa said that in terms of IPO initiatives they are in communication with the Department of Communications. They need to deepen contact on this issue. Another councillor commented that people need certainty as to how the IPO is going to happen. The value of Telkom will be affected if one operator is coming in or if more than one operator is coming in.

The Chairperson said that they need more communication between roleplayers. They need a stable regulatory environment and clarity in terms of suitable policies. ICASA has a responsibility to stablilise the regulatory environment. They must ensure that there is confidence in what they do.

Future priorities -The Chairperson asked for comments on restructuring the SABC.
Mr Langa replied that the council has not discussed the implications of the Gemini Report. However there have been ongoing discussions (at staff level but not at council level) to deal with the policy of restructuring.

Ms Lloyd said that in terms of the Act they do not have to monitor the Charter yet. They must only do this once it is restructured.

The meeting was adjourned.

 

 

Independent Communications Authority of South Africa (ICASA)
Address to Parliament


September 2000

Introduction
It is a great honour to be addressing you. This is the first time that the Independent Communications Authority of South Africa is coming before you. After many years of debate about the merger of the IBA and SATRA we are all very proud to be standing before you as the first Council of ICASA.

Whilst it is an honour to have been chosen to accomplish this task, we are also very well aware of the immense responsibility we have - to integrate the previous Authorities into one strong regulator for both the telecommunications and broadcasting industries. There is no doubt that the judgement that this parliamentary portfolio committee used to decide on this council was informed by the understanding of the tasks ahead. The most important of these being to forge a strong regulator that would acquit itself well in the face of the quicksilver changes attending the broad communications landscape. As is well known, any regulator will inevitably find itself bracketed between the sociopolitical imperatives of government, the revenue obligations of industry and the expectations of communities. It's a little like being caught between the Union Buildings and the Johannesburg Stock Exchange, whilst having to minister to the needs of a community such as KwaMashu Township.

I would like first to introduce the Council. With me are councillors Yasmin Carrim, Willie Currie, Julia Hope, Libby Lloyd, Mbulelo Ncetezo and Neel Smuts. My name is Mandla Langa and I am the new chairperson of ICASA.
While we are still in the process of planning, shaping and giving direction to this new creature, we would like to share with you our vision for regulation in South Africa.
During different Council and management workshops we have identified that our immediate major challenge is to establish this new regulator. We want this new regulator to be amongst other things efficient, effective, respected and independent. We hope that this new body will provide leadership in the area of broadcasting and telecommunications regulation and be innovative in its approach to issues facing all of us. We want above all things to be proactive and not reactive.

In fulfilling our mandates we want to ensure that we facilitate the continued establishment of a vibrant, dynamic and competitive communications industry. We want to develop the framework for the South African industries to be investor friendly, stable, and creative and at the forefront of new technologies. In addition we want to make sure that in doing this we not only ensure we empower historically disadvantaged groups and facilitate universal service/access, but that we provide services to enable all South Africans to have access to full and diverse information about their environment.

I will first give a brief outline of activities since the Authority was established, before going into detail about the challenges facing us.

Establishment
ICASA was formally established on 1 July 2000 - just over two and a half months ago. In that first week of July we held our inaugural meeting, which formally and legally established the new regulator.

July was a period of transition - both for the two organisations, the staff and for the new Council. As the formal establishment of ICASA was fairly rapid, many councillors were both extracting themselves from previous commitments and getting to grips with the requirements of their new positions. We were also confronted with two organisations with very different structures and practices governed by two Acts with not only different mandates, but also different legislative requirements.

Structure
A decision was taken at the first meeting of Council that for the interim period the structures of the previous Authorities would continue and ICASA would thus have two divisions - broadcasting and telecommunications. We have also established several Committees chaired by Councillors to ensure coordination and information sharing between similar units in the two divisions.

We believe we cannot start doing piece meal restructuring - and need to firstly employ a CEO and then contract consultants to assist in developing a new structure in consultation with staff.

We want to emphasise the urgency with which we are approaching this - as this interim period is a time of great uncertainty to staff. Although there is a formal merger, and there is now one Council, we have two different budgets, different phone numbers, different domain names, different salary structures, different policies and practices. The uncertainty has resulted in a number of key personnel resigning - depleting the resources of already stretched organisations.

We would also like to note that we have reached agreement with the Auditor General to extend the 1999/2000 audit of both the IBA and SATRA to include the period up until the end of June 2000.

CEO
We have nearly finalised the process of appointing a CEO. The post was advertised and we have conducted a second round of interviews with three candidates. We are now at the stage of making a final decision of who to employ. We hope that they would be able to join the organisation soon and assist us in establishing the new merged Authority.

In the absence of a CEO, Councillor Neel Smuts has been acting in the position. This has meant both an undue burden on him, and resulted in Councillors having to spend an inordinate amount of time on operational issues. This naturally impacts on the time we can devote to policy issues.

Restructuring
We are hoping to employ consultants to assist in developing a new structure for ICASA, and assist us in integrating for example, human resource policies, financial policies and systems. We have submitted a budget for this to the Minister, as we do not have the resources to for example link the IT networks of the previous IBA and SATRA or to employ the expertise we will need to merge these different systems and policies.

We estimate that the restructuring will take about six months to complete. This will include analysis and consultation with all stakeholders, decisions about new structures and policies, and implementation. Other requirements such as those contained in the Public Finance Management Act will be considered in this process. We have already prioritised the need to appoint an internal auditor and an audit committee.

We hope through this restructuring to address weaknesses that existed in the previous Authorities. It is crucial that we have an integrated organisation by the beginning of the 2001 financial year, when we are allocated one budget. We cannot overemphasise the importance of us receiving the necessary budget to accomplish this.

Backlog
We are also trying to deal with the backlog from both previous authorities. We believe it is important to focus on clearing the backlog while we strategise around how we will fulfil the mandates given to us. This has involved identifying uncompleted processes.

It is important to note that we have been studying ways to use the existing legislation to facilitate the process of fast tracking the backlog. We are for example looking into delegation powers to enable us to finalise issues and investigating whether or not we need to hold hearings into all applications or if we could decide on these based on the papers.

In the case of broadcasting, we need to urgently finalise the licensing of four-year community radio stations. Three provinces - KwaZulu Natal, Western Cape and Gauteng remain. In addition a number of decisions in other provinces had to be postponed pending resolution of a court challenge from Radio Pretoria.

The ICASA Council has reached agreement with Radio Pretoria on having interpreters for all hearings, subsequent to a Pan South African Language Board ruling. We would again like to note that our budget does not extend to providing translation services in all official languages. This process has thus been delayed while we seek the necessary budget to fulfill the agreement.
It should be noted that the majority of the 237 applications we received were from these Provinces. Expediting these applications is not just routine - there are for example many competitors for one frequency. The frustration exhibited by applicants is understandable. We are working on a strategy to expedite the process of licensing new stations.

The finalisation of a position paper on satellite operators and the subsequent licensing process was halted by the IBA due to the need for amendments to the Broadcasting Act. We believe that potential problems are being resolved through the Communications Amendment Bill and await this before publishing a final policy.

With regards to telecommunications, a number of processes have to be completed. Most obviously, the process of licensing the third cell phone operator has been halted by litigation. We are heartened by the latest developments which should enable us to complete the third cell licence in the near future, to ensure fair competition.

We have also had to decide on how to proceed with numerous issues, which were started, but not completed by the SATRA Council. For example, a decision on Vodacom and MTN's application for access to the 1800 spectrum has had to be made. We decided to refuse the application, primarily based on issues of fair competition, given the delay in the licensing of a third operator.

We have in the meantime commenced with a new public process regarding the possibility of MTN and Vodacom swopping some of the 900 spectrum they are licensed to use in exchange for 1800.

The issue of VANS licences is another example of an ongoing matter. Telkom is taking ICASA to court to challenge a decision by SATRA that they should provide certain services to VANS operators. The Vans operators in the meantime want ICASA to enforce the order, pending the outcome of litigation. In addition SATRA had commenced with a process of developing licenses for these services. We are currently evaluating how to proceed on this.

Icasa is also involved in a court case regarding the status of the interconnection and facilities leasing guidelines, which were withdrawn by the Minister after she had approved them. We hope that the case will provide clarity on jurisprudence in this matter.

There are other similar such issues, but we would like to emphasise more the need to draft and/or finalise several outstanding regulations. We have emphasised the need for ICASA to learn from the past experiences of both IBA and SATRA. It is crucial in this regard to ensure that the necessary regulations are in place. A number of telecommunications regulations are outstanding. Some of these have still to be drafted, others require Council approval, while still others are awaiting Ministerial approval. We want to meet with the Minister to find a way to fast track this process.

Ongoing licensing and monitoring
In addition to finding ways to complete the backlog, and dealing with the process of restructuring, we have also been deciding on ongoing licensing and monitoring issues.

We have issued numerous one year and special events community radio licences. We have also begun processing amendment applications to private radio licences. In doing with this we are grappling with issues such as empowerment of historically disadvantaged groups and the need to ensure viability in the industry.

Two Broadcast Monitoring and Complaints Committee hearings will be held during the next month into alleged transgressions by e-tv of its licence conditions. The first hearing deals with programming issues, while the second will focus on whether or not e-tv has contravened its ownership licence conditions.

Challenges
We have foreshadowed some of the challenges that we face in the above section dealing with our activities during the past two months. We would however like to highlight some of the issues we face in planning how we will meet the mandates you have given to us. We look forward to ongoing interaction with you to assist us in overcoming some of the challenges we face. We have held several Council and Council and management workshops around these issues.

We have to find ways to ensure that we can efficiently and effectively regulate the broadcasting and telecommunications industries in the public interest. Given the fact that we have fewer councillors fulfilling the same mandates of those of the IBA and SATRA, we have to find innovative ways to ensure that we meet the needs of both fields, while creating the environment for convergence. While this will be taken into account during the restructuring process, we are investigating legislative mechanisms such as delegation powers to ensure that we don't focus on one area and neglect the other. This might require amendments to the legislative framework.

We are also aware that councillors bring different expertise into the Authority. We are finding ways to ensure we utilise this expertise while ensuring that we can all participate on an informed basis in decisions about which we might not all have the same levels of knowledge. We are currently finalising "industry inductions" so that those with broadcasting policy experience can understand issues confronting telecommunications and vice versa. Initially this means that for example all councillors participate in for example a private broadcasters amendment in order to ensure that in future we can delegate these hearings to different panels.

The requirements of the Telecommunications and Independent Broadcasting Authority Acts are very different. For example, while the IBA Act enables ICASA to make its own regulations, the power for approving recommendations in terms of the Telecommunications Act lies with the Minister.

In order to avoid litigation, we are developing safeguards to ensure the two different legislative regimes are adhered to - taking into consideration the need to meet the requirement for ICASA to act independently of government and industry in terms of the constitution. These different requirements not only govern our processes, but also affect the way the Minister relates to us. We are due to have a workshop with the Department of Communications and with the Minister to establish protocols and to develop a common understanding of our roles under the different Acts. This is particularly important given the Minister's position in the shareholding structures of licensees such as Telkom and the SABC - and the possible perception that might be created that she is acting in their interest rather than the public interest.
It might be necessary for government to investigate integrating the different Acts in order to streamline these processes - taking into account the need to ensure efficient regulatory policy development.

We have previously highlighted the need for additional budget allocations to ensure that we can free the Council as much as possible from operational issues arising out of the restructuring process. We would though like to emphasise the need for budgets to cover litigation costs. ICASA is currently faced with a number of court challenges with regards to both broadcasting and telecommunications issues. There are essentially two different approaches we have identified regarding litigation - both of which require resources to ensure we develop strategies to reinforce the role of independent regulation in developing the industries and our country. It is important to note in this context that we fully endorse the right of every player to challenge our decisions. We want though to ensure that we create certainty regarding the role and power of the regulator through such challenges for both all stakeholders and ourselves.

Firstly we face challenges due to alleged procedural problems. In terms of this, we need to ensure in future that we tighten procedures to avoid court challenges. In addition though, in certain circumstances, we can use these actions to develop jurisprudence in this relatively new terrain of regulation. For example, where we are being challenged on issues regarding admission of new information during an application process, we need to ensure that we get clarity for the future on what constitutes new information and whether we can consider it. This is an area that remains open to interpretation of the Acts.

Secondly, we are also challenged on the merits of our decisions. It is crucial that we are able to properly defend our decisions in court if we want to establish a credible and effective regulator.

It is important to note that certain industry players can essentially render the Authority ineffective by using litigation to delay the enforcement of our decisions and policies. It is pointless to have a regulator if we do not have the means to enforce decisions.

In this regard, we want to start a debate with yourselves and with government about how we can ensure we have the necessary capacity to develop a litigation strategy that will ensure a credible regulator. It is important to note that as regulation is relatively new, we need to establish legal precedents on much of our work and interact with the courts on the complementary roles between regulators and themselves.

We have also identified the need to develop channels of communication with all stakeholders - both internal and external. This we believe will assist in creating a stable communications environment. Internally, we need to take note of the histories of both our predecessors. We must ensure that whilst we encourage debate, we avoid damaging conflict between councillors, and between council and staff. In this way we can stem the leaks which have beset both previous Authorities at different times and avoid regulatory capture by industry. Through this interaction we can also try to ensure that the regulator is seen as an exciting place to work.

In our relationships with government and parliament, we need to clarify and streamline the different communication processes. We look forward to for example more meetings between us and the Portfolio Committee - both to ensure we remain accountable to the public for our actions and so that we can draw on your support and assistance in overcoming problems. It is important that clarity is reached through this interaction about the meaning of clauses regarding independence of ICASA from government.

In terms of industry stakeholders and civil society groups, we need to ensure communication that will strengthen both the regulator and these groups, while again guarding our independence from such stakeholders. We have for example identified the need for regular stakeholders meetings, to ensure transparency.

Finally, we recognise the central importance of the initial public offering of Telkom next year. For this to succeed we believe there has to be certainty in the market place as to the competitive framework governing telecommunications. Whilst creating this framework is not solely our responsibility, it is key to ensure there is a strong regulator in order to build investor confidence in the IPO. Telkom must also play its part by ensuring that its internal functioning is commensurate with that of the best international operators. The publishing of the government's framework for restructuring of state assets assists this process.

Future priorities
We have begun the process of identifying future priorities and a three-year strategic plan. We have been guided in this process by amongst other things the requirements of the Acts and White Papers, directives from government, promises from our predecessors and interpretations of our mandates. These priorities exclude the backlog mentioned earlier.
We have not yet developed time frames for these processes - though some will be dictated by the processes themselves. It is also important to note that in some instances it is difficult to plan at this time as for example the Communications Bill could change the processes we would need to adhere to. The timing of these activities will also be affected by Council's capacity.

We hope to have set time frames and finalised our priorities for this financial year very shortly. We then want to hold a workshop with all stakeholders to discuss these and introduce the new ICASA formally to them.

I will list these issues:

In terms of broadcasting, the priorities include (note these are not listed in terms of importance).

The restructuring of the SABC
The time frame for this will be determined by when the application is received. We envisage that this will be a two-stage process, involving firstly the transfer of ownership and secondly the determination of licence conditions for the different stations. This also includes licensing decisions on former TBVC broadcasters such as Bop TV, Radio Ciskei etc.
Local Content Review. The IBA itself, the Broadcasting White Paper and the Broadcasting Act have identified the need to review local content as soon as possible.
Sports Rights. The Broadcasting Act outlines a process to resolve issues regarding broadcasting and sports rights.
Ownership review. This has several aspects to it. Firstly we need to review the impact of policies regarding empowerment and secondly there is a need to again investigate ownership requirements regarding foreign and local ownership limitations taking into account the viability of the industry.
Viability study into further private sound broadcasters. The IBA promised to conduct viability studies in secondary towns in the near future.
Regional private television. In the Position Paper on private television the IBA said it would look into the viability of regional private television stations during 2001.
Subscription broadcasting. There is a need to decide on licensing of further terrestrial and satellite subscription broadcasters.
Annual Frequency Plan Review. In terms of the IBA Act, the Authority must publish an annual frequency plan for review. We are in the process of finalising this.
Digital Terrestrial Broadcasting. There is a need for the Authority to investigate the facilitation of digital broadcasting - in order to enhance capacity and diversity, and meet universal service requirements.
Community Radio Policy. The Broadcasting Act requires a further inquiry into community radio after the current round of licensing is completed.
Community television. There is a need to investigate the framework for the licensing of community television.
Monitoring Local Government Elections. We are currently getting legal advice on ICASA's role in monitoring broadcast media during these elections. Previously local government elections were excluded from the requirements such as political advertising. The Elections Act has since changed and so we are getting opinions on whether this affects us. We will however have to ensure that political parties are treated equitably by broadcasters.

In terms of telecommunications, the priorities for ICASA include:
Telkom - IPO and the introduction of a Second National Operator. This will partly be determined by directives from the Minister and by the finalisation of the Communications Amendment Act.
Fixed Line Tariffs. In terms of the Telecommunications White Paper and Telkom's license, the Authority is responsible for determining tarrif policies from this year. We are currently finalising a discussion paper on how to regulate tariffs.
Numbering Plan. We need to finalise a numbering plan for telecommunications operators.
Spectrum Policy/Pricing. This needs to be done alongside the government review of spectrum pricing.
The question of a Public Safety Network
The implications of the E-Commerce Policy for regulation.
The audit of MTN and Vodacom's Community Service Obligations (CSOs) and the processing of the deemed licences.
The finalisation of the VANS regulatory framework.

In addition, the Minister has given notice of 43 policy directions covering different issues. The Ministry is currently engaging consultants to assist in this.

It should be noted that these priorities are in addition to continual licensing and monitoring processes.

Conclusion
ICASA has an enormous challenge facing it. We have both to establish a new regulator and to develop policies which will contribute towards ensuring vibrant and innovative industries which are internationally competitive.

In meeting these challenges, we hope to work together with all of you and with government as well as with all the stakeholders involved. We look forward to many constructive interactions with Parliament. You have to ensure that we meet our mandates and we will not be able to do so to the benefit of all South Africans if we do not together find mechanisms to ensure a meaningful relationship.

 

 

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