Electronic Communications A/B: Response to Public Submissions; MDDA Board: Shortlisting

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
02 November 2007
ELECTRONIC COMMUNICATIONS A/B: RESPONSE TO PUBLIC SUBMISSIONS; MDDA BOARD: SHORTLISTING

Chairperson: Mr I Vadi (ANC)

Documents handed out:
Electronic Communications Amendment Bill [B 38B-2007]
Electronic Communications Amendment Bill [B 38A-2007]
Electronic Communications Amendment Bill [B 38-2007]
Electronic Communications Act No 36-2005

Audio recording of meeting

SUMMARY
There was consensus amongst the political parties on the four candidates who should be short-listed as Parliament’s recommendations to the Minister for the Media Development and Diversity Agency Board. These were: Mr Sizwe Minyi, Ms Gugu Msibi, Prof Guy Burger, Ms Nomonde Gongxeka.

The second part of the meeting consisted of the ANC proposing changes to the Electronic Communications Amendment Bill in the light of the public hearings. Most of the proposed amendments were accepted. It was decided to retain all of Clause 2 but this decision was contested. The debate centered on the need for intervention and whether or not it was the government’s role to intervene, and the role of a licensing regulator. The ANC believed that the government had a developmental role to play and that people incorrectly thought that the market was the answer to everything. Opposition parties contended that the state was there to ensure that fair policies and laws were in place and that its role was not to be a player as it caused too many problems.

MINUTES
Media Development and Diversity Agency (MDDA) Board: short listing
The Chairperson called on the ANC to put forward names of candidates for the MDDA board positions. Mr M Kholwane (ANC) nominated on behalf of the ANC.

The ANC nominated:
Mr Sizwe Minyi
Ms Gugu Msibi
Prof Guy Burger
Ms Nomonde Gongxeka

Ms D Smuts (DA) nominated:
Mr Sizwe Minyi
Ms Gugu Msibi
Prof Guy Burger
Ms Nomonde Gongxeka

Ms S Vos (IFP) stated that she agreed with all four nominations and that they were all on her list. The Chairperson read out the formal report naming the nominees which would be handed over to the Minister for approval.

Electronic Communications A/B [B38-2007]: response to public submissions
Ms Smuts asked if the Committee had heard back from ICASA concerning the use of old licences and any other submissions regarding ECA amendments.

Mr Edmund Baloyi (Advisor to the Chairperson: ICASA) said that currently, they were converting licences but unfortunately they did not have the licences on hand to consider. Submissions were also being considered.

The Chairperson stated that if there were no other issues, then they would get started on the amendments to the Bill. He reminded the Committee that ICASA members were present to answer any questions of clarity.

Ms Vos reminded members that constitutional issues had been raised and therefore there would be law advisors present to answer any questions.

The Chairperson asked if the law advisors wanted to respond to any of the issues that had been raised.

Mr Gideon Hoon (Principal State Law Advisor) informed members that there were no real issues that were raised that were deemed unconstitutional. He said that there were policy decisions still to be made and policy directions to do with ICASA, and that the directions could be aimed at specific strategic interventions and this could only act as a framework. Mr Hoon warned that they were not the Constitutional Court, it was just the opinion of the Office of the State Law Advisors.

Long Title and Preamble
The Chairperson called on the ANC for proposed amendments to the Bill.

Mr Kholwane said that the public hearings had provided the ANC with a great deal of assistance. After considering all the submissions, they had developed proposals.

Mr Kholwane said that they did not propose any changes to the long title. The ANC proposed inserting into the Preamble this phrase: “in order to reduce the cost of information, communication and technology infrastructure” after the word “sector” in the first paragraph.

The second amendment saw the insertion of “at wholesale rate” after the word “infrastructure” in the second paragraph of the Preamble. In the same line, Mr Kholwane proposed the insertion of “to operators” after “services”.

The ANC also proposed an adjustment to the third paragraph of the Preamble with the omission of the term “state-owned” and the substitution of the word “public”. According to Mr Kholwane, this amendment would deal with the ambiguities raised by ICASA.

Ms Smuts commented on the matter of the long title. She said that the title was not correct and this had been pointed out in various submissions. She stated that she liked all the amendments to the Preamble except the last one regarding public entities. She wanted to know if some of the adjustments should be included in the title and how binding they would be in the Preamble. Ms Smuts commented again that the long title was wrong.

Mr Hoon said that the long title just explained what the Bill did. The Preamble on the other hand, explained the reasons for the amendment. The Preamble was more valuable than the long title.

Mr Kholwane asked if members had any input with regard to the long title. He proposed the word “additional” be added after the words “policy direction”. Ms Smuts and Ms Vos agreed. The Chairperson asked the law advisors if the amendment was fine when it came to constitutional law. Mr Hoon agreed that it was.

The Chairperson stated that all the adjustments were acceptable to the Committee except the amendment changing “state-owned” entities to “public” entities. Ms Smuts agreed that it was problematic but stated that she wanted to postpone discussion until the amendment of some other clauses.

The Chairperson stated that he did not know what the problem was. He still did not know the difference between a “state-owned entity” and a “public entity”.

Mr Hoon explained that “state-owned entities” were not properly defined but that “public entities” were defined in the Public Finance Management Act. He stated that he did not think that there were state-owned entities anywhere except for entities owned by municipalities. Mr Hoon said that public entities were defined as national government business enterprises which are enterprises where the juristic person does not get any money. In terms of a national public entity, it is an entity that gets money from funding or taxes which is accountable to Parliament and established in terms of national legislation. Mr Hoon said that “state-owned” was a term with no real substance.

The Chairperson then asked if “public entities” would be included in the Preamble. Members agreed.

Mr Kholwane said that they had one more amendment to propose: the removal of the word “telecommunications” from the Preamble - as this word did not apply anymore - and replace it with “electronic communications”.

Section 2 of Electronic Communications Act (ECA)
Ms Smuts asked about the Multichoice proposal that had not been addressed. Multichoice had proposed an insertion into the Objects of the Act and the argument that they had put forward was very convincing. The Minister already had the power to give policy directions and all that was needed was an insertion in the Objects of the Act. The proposal should be taken into consideration because in the section of the Act which describes the Minister’s policy direction-making powers, it says that whatever the Minister does, must be consistent with the Objects of the Act. She agreed that all that was needed was to add: “encourage investments, including strategic ICT infrastructure investment and innovation in the communications sector”. The amendment would be inserted into Section 2(d) of the Electronic Communications Act.

The Chairperson called for comments on the proposal by Ms Smuts.

Ms Vos said that she agreed with the amendment.

Ms Mashila Matlala (DOC) said that ICASA approved of the proposed change.

Mr Kholwane said that the ANC would discuss it during the break and would inform the Committee of their decision.

Clause 1 amending Section 1 of the ECA
The Chairperson asked members for any adjustments or issues of controversy but no issues were raised.

Clause 2 amending Section 5 of the ECA
The Chairperson asked the ANC for any comments.

Mr Kholwane said that the ANC had developed a proposed amendment after taking into consideration the submissions at the public hearings. He proposed inserting the first half of Clause 2 into Section 3(1) of the ECA which read: “The Minister may, after having obtained Cabinet approval, issue a policy direction in order to initiate and facilitate intervention by government to ensure strategic ICT infrastructure investment”.

The Chairperson asked if the proposal meant separating half of the sub-clause and moving it to Section 3 dealing with Ministerial Policies and Policy directions.

Mr Kholwane agreed and informed members that the other part would be part of Section 5.

Ms Smuts agreed that it was a good idea to use only the first portion and argued that it was all that was needed in terms of change. She warned, however, that that section was moved to the wrong place. She agreed that it should be in Section 3 but that 3(1) referred to Policy and thus it should not have been moved there. She said that 3(2) referred to Policy direction and therefore that would be the right place to insert the amendment.

Ms Smuts said that it was her opinion that it should be placed under Section 3(2)(b) where the Minister already gives determination of priorities for the development of electronic communication networks and services.

Ms Smuts restated that all that was needed was to amend the objects. She said that section 3(2)(b) already directed priorities and that the ANC could add their amendment to it.

The Chairperson expressed confusion at what Ms Smuts had suggested.

Ms Smuts informed him that they were looking at Chapter 2 Section 3 of the Act. She told him that 3(1) looked at Policy while 3(2) referred to Policy direction.

Mr Hoon said that he wanted to comment on the amendment proposed by the ANC. He suggested that there should not be a split as both concerned policy direction and were in conjunction. Mr Hoon argued that, from a drafting perspective, the two be kept together and that all that was needed was a framework. Splitting the two could result in constitutional issues.

Mr R Pieterse (ANC) suggested that the Committee let Mr Kholwane finish his amendments after which they could comment. The Chairperson agreed.

Mr Kholwane said that they wanted to propose an amendment to the principal Act by substituting subsection 3 for paragraph 2 which would read as “any electronic communication network service, broadcasting service or electro-communication service including public entities” and then have Clause 2 amending Section 5(13) read: “The Minister may, after having obtained Cabinet approval, issue a policy direction in order to provide for a framework for the licensing of a public entity by the Authority”.

The Chairperson informed members that there was a proposal from the ANC to split Clause 2 between Sections 3 and 5 of the Act and a proposal from the state law advisor not to separate anything. He said that they would resume discussions after the tea break.

After the break, Mr Kholwane informed members that the ANC did not oppose the amendment put forward by Multichoice and that it would strengthen their case.

The Chairperson then asked about the amendment put forward by the ANC to remove the last sub-clause of Chapter 3 Section 5(13) and create a new section elsewhere. The law advisors had suggested that it stay as it is in the Bill. The Chairperson asked if the ANC would accept Mr Hoon’s proposal that Clause 2 stay as is.

Mr Kholwane said that they would accept it.

Ms Smuts stated that the amendment proposed by the ANC would create a very broad parallel licensing regime when the Minister’s role should be separate. She said that the second half of the Clause 2 of the Bill was too broad and therefore problematic as the Minister would be able to intervene.

Mr Kholwane replied that the ANC’s submission was that they needed to ensure that what the government wanted was in actual fact a need for the government.

Mr Paris Mashile (Chairperson: ICASA) said that it would mean that they would take the lead and intervene and this would result in prices coming down.

Ms Smuts stated that Mr Kholwane had made some good arguments but that the second half of the clause was still a problem. Ms Vos agreed that the issue that Ms Smuts raised was very important.

Mr Kholwane said that he appreciated the issues that were raised but that they had made a decision that investment was needed. They had done everything possible but the investment was not forthcoming, specifically foreign direct investment until the government made a decision to invest in the infrastructure of the country. Mr Kholwane said that they wanted to invest in the infrastructure development of the country because it was their responsibility and that sometimes it was easier and cheaper to do when there was competition. He said however that it was the government’s responsibility to ensure that people had access to infrastructure.

Mr Kholwane said that the issue that he was trying to raise was one of strategic intervention and what it meant. He wanted to know how strategic intervention could be limited to a once-off thing? Infrastructure development was identified as something that they could strategically intervene in.

Mr Kholwane said that that the issue was unpredictable and that it was not definite that there would not be problems without intervention in the future and this would result in meetings being held to talk about intervention again. He said that if the government wanted to intervene there would be a policy directive where they would explain the need for intervention. The result would be an explanation for the strategic intervention. Mr Kholwane stated that limiting strategic intervention would not be progressive.

Ms Vos responded to Mr Kholwane’s argument, stating that the exact arguments had been raised in 1996 when discussions about the Telecommunications Bill were held. Ms Vos said that it had been a disaster as there were too many things happening behind the scenes within the departments. She reminded members that they were there because of the separation of powers and because they had oversight responsibilities and obligations.

Ms Smuts said that the problems were with subsection 13 of the Bill and that she hoped that the ANC would think about it as they did not need such issues. She also hoped that they could come back and vote on the issue without having that section. Ms Smuts argued that they did not need the second half of the clause as it opened up the scenario of the state getting too involved. She informed members that the state was there to ensure that fair policies and laws were in place and that its role was not to be a player as it caused too many problems.

Mr Kholwane stated that Ms Smuts had raised an important point but that there would be a debate on the role of the developmental state. He said that this debate came about because people thought that the market was the answer to everything.

Mr Pieterse stated that the ANC had made their positions clear and if a vote was not going to be taken then the Committee should reconvene another day.

Ms Smuts agreed but stated that she hoped the ANC would think about the issues brought about by the second half of the clause. She said that a proper licensing authority would decide on its own if there was a problem with infrastructure competition and would tailor their policies accordingly.

The Chairperson informed the Committee that they would reconvene on another day but warned that they would not reopen the debate, they would just get the final positions of all the parties and voting would take place.

Mr Hoon stated that the framework would not be open-ended and therefore could not be a parallel licensing issue.

The meeting was adjourned.