antitrust.co.za - Drawing the battle lines

The thorny issue of who gets to regulate and license what in South Africa’s broadcasting and telecommunications industries has been put up for debate with the release of the third draft of the Convergence Bill. By Ana Monteiro, Moneyweb, 30 May 2005

The thorny issue of who gets to regulate and license what in South Africa’s broadcasting and telecommunications industries has been put up for debate with the release of the third draft of the Convergence Bill.

While the bill maintains the need for the communications minister to approve certain licences, it also grants the minister more power in that he or she is not obliged to consult with the industry’s regulator, the Independent Communications Authority of SA (Icasa), when issuing policy direction. The telecommunications industry has already seen the confusing consequences of policy non-alignment between the minister and the regulator. While Icasa was of the opinion that Minster Ivy Matsepe-Casaburri’s September 2004 determinations meant that value-added network service (Vans) operators could provide their own networks and were not obliged to use Telkom’s infrastructure, the minister’s second statement on the matter – made on the eve of when the initial determinations were to come into effect – backtracked on this, saying that only mobile operators could self-provide. In his oral submission to the parliamentary portfolio committee on communications (PPCC) last week, Icasa chairman Mandla Langa said that while section three of the bill entrenches the co-regulatory system between the minister and the authority, it also involves a “diminution of the authority’s existing powers, … and could provide serious inroads into the authority’s independence as set out in section 192 of the constitution.” Icasa is not the only entity voicing concerns about its regulatory muscle; mobile cellular company MTN supports granting Icasa exclusive powers to promulgate regulations, saying: “this will effectively eliminate the dual regulatory powers that existed between the minister and Icasa and hopefully help to strengthen the efficiency and regulatory certainty in the industry.” Another cellular operator, Cell C, says it supports ministerial involvement to a certain extent: “…the independence of a regulator is of significant importance to the industry, particularly as it assures its impartial management and provides the necessary credibility to its decision-making.” However, it says the minister must (as opposed to ‘may’ in the bill’s current wording) consult Icasa when issuing policy direction, as “the independence of a regulator is of significant importance to the industry, particularly as it assures its impartial management and provides the necessary credibility to its decision-making”. The second network operator (SNO) contends that “while the minister will undoubtedly be playing a critical role in determining key policy for the communications sector, including when additional licences ought to be introduced, (it) questions whether the actual approval of licence conditions ought to be done by the minister, given that the objects of the Convergence Bill require a separation between policy formulation and policy implementation, and given international regulatory best practice on the issue. Another gap highlighted by Icasa, the SNO and the cellular providers is that without the Icasa Amendment Act has not yet been published. As Cell C says: “Without having had sight of the Icasa Amendment Act, it will not be possible to assess whether transparency, legitimacy and credibility will be achieved in the new dispensation. …The bill, at the very minimum, must be read with the Icasa Amendment Act in order to provide certainty, avoid any ambiguity and facilitate its implementation.” http://www.moneyweb.co.za/