Telecommunications Amendment Bill: deliberations

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
16 October 2001
TELECOMMUNICATIONS AMENDMENT BILL: DELIBERATIONS

 

Telecommunications Amendment Bill [B65- 2001]
Document D: Telecommunications Amendment Bill [B65-2001]
Proposed Amendments by the Department of Telecommunications [Document C]
Service Operators’ proposed definitions of Mobile Cellular Telecommunication Service (awaited)

SUMMARY
The Chair allowed political parties to make comments before the start of formal deliberations. All the parties agreed that the interests of the consumers have to be balanced with those of the investors.

With regard to the issue of multimedia the Democratic Alliance felt that the entire provision should be omitted from the Bill, as it is not even certain that this issue should be dealt with under the Telecommunications Act. They cautioned that there were constitutional implications in dealing with the issue in this Bill.

The Committee debated whether the issue of resale should apply to public switched telecommunications services only or if it should apply to local access service licencees as well.

Members of both the Committee and the industry discussed the definition of Value Added Network Services, which had been suggested by the Authority. Members of Telkom and the South African VANS Association opposed the 'shopping list' approach suggested by the Authority.

The definition of "Value- Added Network Services" in clause 1 of the Bill was considered, and the proposed definition in Document C was accepted.

The proposal in Document C dealing with "Virtual Private Network" was accepted.

The "Fixed- Mobile Service" definition in clause 1 was revisited, and was amended to include a reference to "under- serviced areas" and its handling of "base station cells", "local exchange" and "call handover" were clarified.

The proposal in Document C regarding the clause 1 definition of "Mobile Cellular Telecommunication Service" was evaluated, and subsequently amended to incorporate the proposed definitions of the service providers.

The definition of "Resale" in clause 1 of the Bill was amended to include a reference to "under- serviced areas" and to accommodate the amendment proposed in Document C.

MINUTES
The Chair explained that Document D is a working document of the Bill. The Committee would be referring to Documents C and D. As the Committee had reached the formal stages of their deliberations, the input by industry would be limited. The Chair invited parties to make comments before the start of the formal deliberations.

Comments by the UDM
Mr S Abram (UDM) stated that any legislation produced by the Committee must improve on existing legislation. The Committee should consider the following:
- One has to safeguard the interests of the investors who have invested large amounts of money in the industry.
- Historically disadvantaged persons have to be catered for.
- Transformation has to take place (in practice and not just in legislation).
- One has to eliminate unnecessary delays in decision-making.
- The Committee should attempt to create a competitive environment.
- The interests of the consumer are central to the Bill.
- The independence of the Regulator has to be ensured.

Comments by the IFP
Ms S Vos (IFP) stated that the IFP still has many problems with the Bill. They will however attempt to move forward in a constructive manner. It is important to take into account national interests on the one hand, and the interests of industry (who have invested billions of rands) on the other.

Comments by the ANC
Mr E Magashule (ANC) stated that the UDM and IFP have addressed the issues well. The ANC will also focus on following a constructive approach, taking into account national interests. It is important to take into account differing views although one should attempt not to waste too much time. One should at all times be mindful of policy directives and the World Trade Organisation agreement. Finally, it is important to ensure that the final legislation will be constitutional.

Motion of Desirability
The Chair read the Motion of Desirability and the Committee adopted it.

The Chair referred the Committee to Documents C and D.

Clause 1
Ms Mtsweni proposed the following changes to the proposed Clause 1.
Clause 1 (a) (a),
- The term 'carrier's carrier' should be omitted and 'carrier of carriers' should be retained.
- The commas should be replaced by the word 'or'.
- At the end of Clause 1 (a) (a), after the word 'or', the words 'vice versa' should be inserted.

Clause 1(a) (b)
- The words 'in the Republic' should be inserted at the end of the words 'end-users directly' (page 3, line 2)

The Chair stated that the use of commas was not serious.
The Committee accepted the proposals.

Ms M Smuts (DP) asked why carrier selection had been omitted and only carrier pre- selection had been included.

The Chair said that the member could suggest a definition for carrier selection. The Committee would then return to examine that issue.

Mr Magashule agreed with the definition for carrier pre- selection, but suggested that 'operator' should replace 'service'.

Clause 1 (c)
The Chair stated with reference to Document C, number (6), that the reference to Esi- tel would now be replaced with 'Eskom (as defined in terms of the Eskom Act) and subsidiaries'.

Clause 1 (d)
Mr Magashule favoured the definition of 'fixed line operator' provided in the Telkom submission.

Ms Smuts agreed, but stated that the following should be added, ' provided that the access shall be restricted to a specified base station cell and shall therefore not permit the end user to move the terminal equipment between cells or make use of call handover'.

The Chair asked members to put this clause in writing.

The Chair stated that it was important to distinguish between mobile operators and mobile cellular operators. One should not specify the frequency to be used by the mobile operators. Secondly, one should ensure that there is limited mobility within geographical areas. Thirdly, one does not want fixed line operators to create cells in a local exchange.

Clause 1 (g)
Ms Mtsweni asked if the provision in subsection (a) has not already been encapsulated in the definition of carrier of carriers.

The Chair asked if the words 'vice versa' in (a) are not catering for the situation in (b).

The DG explained that (b) refers to all countries outside SA using the South African system, e.g. where Telkom carries traffic from Cuba to Zambia. It is therefore different to (a).

The Chair asked if the clause should remain as is. Members agreed.

Clause 1 (c) - Local access telecommunications service
The Committee accepted the proposed definition.

Clause 1 (i)
Mr Magashule stated that there were two possible definitions for a 'mobile cellular telecommunications service'. These are:
- 'it is a service provided by a licensed mobile cellular operator as contemplated in S37'.
- the definition on page 3, number 11 (Document C)

Ms Smuts indicated that one should attempt to actually include a description of the technology. The Committee had decided that they would move away from simply referring to other sections in the Bill or to licenses.

Ms Mtsweni agreed, saying that the Department should come up with a definition.

Ms Smuts criticised the fact that the names of mobile operators were being included in the definition clause. It creates the impression that there will never be any others.

The Chair said that the Committee could return to this issue.

Ms Mtsweni suggested the following definition for 'multimedia': 'it is a communications service that combines various forms of media such as video, text and audio to communicate information or content in an interactive format including services such as (the services listed in (a) - (j) of the Clause).

Ms Smuts asked why it was necessary to repeat 'video', 'text' and 'audio' as it is already listed under in (a) - (j).

Ms Mtsweni agreed that it could be omitted.

The Chair compared the definition proposed by Ms Mtsweni with the definition in the Bill (Document D). He asked if members would settle for 'communications service' (as suggested by Ms Mtsweni) and were willing to exclude reference to 'a digital broadcasting service'.

Ms Smuts argued that 'communications service' was not really saying anything, as it could include broadcasting and telecommunications services.

The Chair asked if Ms Smuts had a suggestion.

Ms Smuts responded that the DA position is that the entire clause should be deleted, as it is not even clear whether the issue is being dealt with under the correct law.

Ms Vos offered to draft a clause in which she would attempt to reach a compromise on the two positions.

Ms Smuts cautioned that there were constitutional implications to retaining the clause.

The Chair referred to the definition of 'number portability' (in line 28 of Document D). He asked what a fixed/mobile telecommunications public network refers to. It seems that the deletion of the word 'public' would enable the term to make sense.

Mr Magashule agreed.

Clause 1(j)
Ms Smuts pointed out that the Independent Communications Authority of SA (ICASA) had referred to two or more separate, non-contiguous premises in their submission. She asked why the Bill now referred to 'one or more'.

The DDG stated that it should refer to 'two or more' and the Chair said that this change would be effected.

The Chair referred to the definition of 'public switched telecommunication services'. He pointed out that the words 'for a fee' replace 'on a subscription basis'.

Ms Mtwseni argued that the clause should state 'provision of telecommunication services to the end user on a subscription basis’.

The Chair stated that reference to the end user is not really necessary.

Ms Smuts argued that although they do provide services to the end user on a subscription basis, they do many other things as well.

The Chair suggested that the amendment (in Documents C and D) should be accepted.

Ms Mtsweni said that the definition of 'public switched telecommunication service licence' is of no use as it merely refers one to another section in the Act, i.e. S34 (2) (a) (i). It should therefore be deleted.

Mr Smuts said that it allows for easy reading, as the term may have been referred to in other sections of the Act.

Ms Smuts argued that the definition was not really saying anything.

The Chair said that the definition should be deleted.

Clause (1) (k)
The Chair noted that in this definition of radio frequency one was again just being referred to another section in the Act, i.e. S30.

Mr Smuts explained that if one encounters an expression in the Act one should be able to refer to the definition. The definition very often has a cross- reference, which enables one to see where the expression is dealt with more fully.

The Chair said that perhaps it makes sense to retain both the definitions of 'public switched telecommunication service license' and of 'radio frequency'.

Clause (1) (l)
Ms Smuts asked if 'resale' applies only to public switched telecommunication services (PSTSs) or if it applies to local access services as well.

The Chair referred to S32 (a) (ii), which provides that the SNO would provide services using Telkom's facilities for a period of two years.

Ms Smuts suggested that the term should include local access services as well. She therefore suggested the use of the term 'licencee', which would encompass local access services as well.

The Chair argued that 'licencee' was too vague. Also, resale should be read in the context of S32 (a) (ii).

Ms Smuts again asked what about local access services licencees in under- serviced areas who are able to provide Voice over Internet Protocol (VoIP). They should be included in the definition of resale.

The Chair pointed out that this matter also concerned the unbundling of the local loop within two years. When this happens the issue of resale can be revisited.

Ms Smuts asked on what basis the local loop would be operating until then. The under- serviced will then only have access to the local loop after the two years.

The Chair explained to the Committee that the DP's argument is that local access operators should have the right to resale until they have their own infrastructure.

The DG asked if there is anything preventing them from doing so now.

Ms Smuts pointed out that the definition of resale prevents them.

The DG agreed. He said that this could be remedied by changing the wording of the clause.

Ms Smuts suggested that 'local access operators' should just be included alongside the reference to PSTS licencees.

The Chair said that this could be done but one should not lose sight of the objective relating to under- serviced areas, i.e. that the licencees should roll out their own networks in areas with less than 5% teledensity. With regard to the formulation of the new definition, he pointed out that 'local access licensee' had never been defined. He therefore suggested the use of 'under- serviced area licensee'.

Clause 1 (n)
Ms Smuts suggested that the amendment in (n) be omitted. The Chair stated that this means that they would revert to the original provision.

Clause (1) (q)
Ms Smuts said that it had been wise to adopt ICASA's definition of Value Added Network Services (VANS), which had been suggested by the Authority. Under the heading "Such added value can consist of:' she pointed out that their third point had been omitted. This provision as proposed by ICASA had stated, 'the application of technical resources and managerial skills that would increase the efficiency of the telecommunication facility and achieve the service objectives of the customer(s)'. This could be inserted after the word 'data' (as it had been in ICASA's definition). Including this provision would provide clarity in an area where there had been so much dispute.

The Chair asked if the third point (c) had not been covered in their first point (a).

Ms Smuts said that this was not the case. (c) deals with managerial skills and technical resources, which may present problems in future disputes.

Ms Mtsweni pointed out that Telkom had also submitted a definition.

The Chair asked for Telkom and the South African VANS Association's (SAVA) positions regarding the inclusion of (c).

Mr M va den Bergh (SAVA) suggested that if one were going to use a 'shopping list' it should be inclusive. Thus it should state at the top, 'Such added value may consist of'. With regard to (c), he stated that it gives a last bit of clarity to what has been a long-running dispute.

Dr Cielli (Telkom) was opposed to the use of a shopping list. It raises the problem of whether the list is inclusive or not. It is not clear what (c) adds to the clause. Instead of (c) the following could be used, 'management on behalf of the customer of the PTN operated by that customer'. However, in principle he did not support the concept of a shopping list.

The Chair suggested the removal of the shopping list [(a) and (b)], i.e. and therefore the retention of the first paragraph only.

Dr Cielli argued that the definition could not just be left at the first paragraph. If this was to be the case, then even the provision of cheaper service to a customer would be a VANS, i.e. a value added to the customer).

The Chair asked if the shopping list should therefore remain.

Mr M Karabu (Telkom) stated that the problem is that 'value' has not been defined.

Mr Smuts pointed out that the courts would interpret (a) - (c) generically. Thus (a)- (c) could assist with the interpretation of the rest of the clause.

The DG argued that Telkom and SAVA agreed with the clause until (b). He therefore suggested that they should attempt to craft (c).

"Value- Added Network Service"
The Chair noted that no agreement has been reached on the precise definition of a Value- Added Network Service (VANS). The initial proposed definition in clause 1 of the Amendment Bill referred to section 40 of the Telecommunications Act 103 of 1996 (the principal Act) for further explanation and content. Yet this section 40 does not contain any satisfactory definition of VANS, and it therefore the directive of this committee to ascertain a feasible definition that accommodates the interests of all involved.

The Chair drew members’ attention to page 37 of the White Paper on the principal Act that provides a definition that applied since 13 March 1996. This definition, however, does not provide any further clarity on the dilemma currently facing this committee as it only suggests a direction in which this committee should move.

The Chair inquired as to which route would now be followed by the committee, since no compromise has been reached regarding the definition. It seems this committee has only one of two options: either adopt the current formulation of clause 1 definition which makes reference to section 40 of the principal Act, or the proposed parts (a), (b) and (c) on page 3 and 4 of Document C are enacted and the proposed definition and reference to section 40 are deleted.

Ms S C Vos (IFP) suggested that this dilemma could easily be solved, because Parliament has enacted a regulator that it has bestowed with confidence and that has "produced the goods". If the parts (a) to (c) are not inserted into the clause 1 definition, this committee would be "back to square one" and would have a definition that would cause significant litigation. For this reason the definition proposed by the Independent Communications Authority of South Africa (ICASA) is recommended for inclusion in the clause.

Ms M Smuts (DP) turned the members’ attention to point 2.13 of the White Paper that does isolate the proposed parts (a) and (b). Furthermore, the regulator has already analysed this issue and has consequently submitted a recommendation based on the study to Parliament, and any refusal to acknowledge their recommendation would be nothing short of ignorant. It would indeed be non- sensical to require the body to conduct the study, allow them to invest that much hard work into formulating and subsequently submitting the report, only to then refuse to even consider their proposals. Moreover, if the proposed part (a) alone is enacted the definition would not explain what the "value" consists of, and thus all three parts need to be included in the definition.

Mr E S Magashule (ANC) suggested that the current formulation of the clause 1 definition be retained and that the proposed parts (a) to (c) be discarded, as these merely provide examples of VANS.

The Chair informed the committee that is has just recently come to his attentions that the precise problem of the industry representatives is with regard to the VANS definition is its handling of the term "managed data service" in clause 15(a) of the Bill. Had this concern been brought to the committee’s attention at the very outset, significant progress on this point would have been made by now. Furthermore, this issue was not discussed in the written or verbal submissions, but rather the definition and practical implications of Voice over Internet Protocol (VoIP) were focussed on.

The Chair acknowledged the relevance of Ms Vos’ proposal but responded that ICASA is not a law- maker, and therefore its recommendation is merely that and cannot be inserted verbatim into the Bill. The term "managed data service" could be included in the proposed definition, but this would not actually solve the problem. Its inclusion would at least provide a way forward, but the actual articulation of the term’s definition would have to wait for a later stage. Does Telkom and SAVA agree?

Dr Cielli (Telkom) and Mr van den Bergh (SAVA) agreed with this suggestion.

The Chair noted that all were in favour of the proposed VANS definition in Document C.

"Virtual Private Network"
The Chair called for any objections to the proposed definition of Virtual Private Network (VPN) in clause 1.

Ms N S Mtsweni (ANC) suggested that proposal 21 on page 4 of Document C be accepted, as this definition is now incorporated under the proposed VANS definition.

Ms Smuts agreed with this suggestion.

The Chair agreed, and called for the deletion of this definition from clause 1 of the Bill.

"Voice over Internet Protocol"
The Chair noted that no objections to this definition in clause 1 were voiced.

"Fixed- Mobile Service"
The Chair returned to the definition of Fixed- Mobile Service (FMS) contained in clause 1.

Ms Smuts suggested that the clause 1 definition was "missing" a reference to "limited to a specified base station cell" in proposal 7 on page 2 of Document C. The incorporation of this phrase would limit this function to a specified geographical area in addition to call handover. Consequently, the phrase "provided it is limited to a specific base station cell" should then be inserted after "local exchange".

Ms Mtsweni suggested that the phrase "between local exchanges" be inserted after "call handover" at the end of the same proposal in Document C.

The Chair inquired of the industry representatives whether it is possible for a cell designer to allow one local exchange to have a "super cell" within the local exchange area, for if so then Ms Mtsweni’s suggestion makes sense. But if not, then by implication a local exchange can have 2 or 3 cells within the same geographical area and then call handover would be a necessity in that local exchange area.

Dr P Doany, from Cell C, informed the committee that the intention of the connection is to provide a means of access to the network. Furthermore, if a local exchange contains a cell that covers a specific geographical area but a fixed wireless service is instead employed, then call handover would not be possible. Therefore, if the intention is to provide access to the network, mobility within the geographical area as well as the provision of this service at a reasonable cost, then call handover would not be possible.

The Chair inquired whether the local exchange design would have to be materially altered to successfully provide this service.

Dr Doany replied that a single cell currently handles 2 to 3 thousand users.

The Chair called for Telkom to respond.

Dr Cielli regretted to inform the Chair that Telkoms’ panel of technical experts is not present at this session, but stated that the proposed definition seems reasonable.

Mr T Beale, a representative from Vodacom, also confessed to not possessing the necessary technical knowledge to offer an informed opinion on this matter, but nevertheless agreed with Dr Doany’s that cell operators favour the use of a cell rather than a local exchange. The reason for this is that it allows handovers to be tracked with greater ease, and is therefore primarily a matter of comfort that cells are preferred.

The Chair noted that the cell operators agreed on this issue, but stated that the challenge now facing this committee is to reduce this into comprehensive and enforceable legal definition to capture these concerns exactly. The key question now is whether it would be possible to refer to "base station cells" and "local exchange" interchangeably, or does the provision have to be specifically worded to provide in the alternative.

Dr Cielli objected to the use of "base station" as this deals with a specific technological device rather than the description of a service, and it seems inappropriate for Parliament to dictate the precise practical implementation of these technological measures. Furthermore, if "call handover" were not allowed, the call would have to remain within the specific geographical area in which the service is provided by that particular transmitter or receiver.

Dr Doany agreed with Dr Cielli’s suggestion, because if the "call handover" definition is incorporated under the definition of FMS then a means of transference of calls is provided. If, however, the definition provides for call handover between local exchange areas then there is a problem as in this instance "local exchange area" could have an unrestricted meaning.

The Chair accepted these concerns and stated that the proposed definition of FMS would be accepted tentatively, but called for the formulation of a suitable definition that successfully incorporates all these concerns, and accommodates the interests of all involved.

The Chair inquired whether the definition FMS adequately accommodates the under- serviced areas.

Ms Smuts answered in the affirmative.

The Chair consequently called for the phrase "or under- serviced area licencee" to be inserted after "public switched telecommunications licencee" in the clause 1 definition. The State Law Advisor (SLA) is to furnish a polished formulation of this amended provision as soon as possible.

"Mobile Cellular Telecommunication Service"
The Chair drew the committee’s attention to the three definitions of this term proposed by the representatives from Telkom, Vodacom and Cell C contained in the submitted handwritten document.

Mr T Beale suggested that its definition of the proposed section 36B be included in the Bill as it defines precisely how Vodacom "does what it does", by detailing the services it provides. Furthermore, Vodacom’s definition of the proposed Section 36A should similarly be included in the Bill as it discusses the exact technology employed by Vodacom to provide the services detailed in the proposed section 36A. The rather lengthy definition in the handwritten document is preferred here, as protracted and awkward as it seems, as it "spells out" exactly what Vodacom has to offer. A shorter definition could also be adopted, but to effectively accommodate Vodacom’s interests it would have to include a provision incorporating "the services provided by Vodacom’s current licence", or something to that effect.

Dr Doany explained that the first lengthy definition defines "fixed mobile" and "mobile", and recommended that either the second or last definition be accepted.

The Chair urged for a concise a definition as possible to be accepted by this committee.

Ms Smuts suggested that the first rather lengthy definition be inserted into the proposed section 36B as it deals with "call handover", and that the two shorter definitions be inserted in the proposed section 36A as it seems to deal with the service provided. The clause 1 MCTS definition could thus be amended to read "[MCTS] means the making use of call handover between adjacent cells, as contemplated in section 37".

Dr Doany stated that section 37 of the principal Act does not, however, sufficiently cover ‘service" but would agree to its retention of the definition of the term "system" in that section were reformulated.

The Chair called for the clause 1 definition to be amended so as to include the first lengthy handwritten definition in terms of an "[MCTS] network", and then to provide for an "[MCTS] service as contemplated in section 37".

It was noted that all agreed to the proposed amendment.

"Resale"
The Chair considered to proposal 18 on page 3 of Document C dealing with the definition of "resale" in clause 1 of the Bill.

Mr Smuts, from the office of the SLA, suggested that the phrase "or under- serviced area licencee" be inserted after "public switched telecommunications service licencee" in the proposed clause 1 definition.

The Chair noted that the committee consented to these proposed amendments.