Convergence Bill [B9-2005] Presentation to Parliamentary Portfolio Committee on Communications

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Convergence Bill B9-2005 Presentation to
Parliamentary Portfolio Committee on
Communications

• 24 May 2005

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Opening Remarks

• ICASA supports central purpose of Bill
• The Bill is a substantial revision to current
  legislative framework
• Most important legislative development since
  Telecommunications Act, 1996 and IBA Act, 1993
• ICASA hopes legislation will assist in creating
  increased certainty and confidence in regulatory
  environment

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Opening Remarks (2)

• Bill presents golden opportunity to correct
  problems and remedy past defects with sector
  legislation
• Consolidation of legislation and convergence of
  networks should not be conflated
• In consolidating, the higher standard of
  constitutional protection applicable to
  broadcasting should not be diluted
• ICASA requires a higher degree of discretion
  in operations

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Opening Remarks (3)

• Current timeframes proposed in Bill are onerous
• Convergence Bill and ICASA Act Amendment Bill are
  inextricably linked and need to commence
  simultaneously
• ICASA is at the coalface of communications sector
  regulation in South Africa and is responsible for
  implementing the Bill
• Our submission should therefore be viewed in this
  light and since we are the custodian of
  communication regulation in the Republic

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Chapter 1 Definitions Objects

• Definitions are the cornerstone of effective
  legislation
• Objects of the Act
• We support expanded list of objects
• Needs of people with disabilities must be taken
  into account
• We have made proposals on enforceability of the
  objects of the Act

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Chapter 2 Policy Regulation

• Ministerial policies and policy directions
• Entrenches co-regulatory system between Minister
  and Authority
• Involves diminution of Authoritys existing
  powers
• Could provide serious in-roads into Authority's
  functional independence

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Chapter 2 Policy Regulation (2)

• Ministers power to make policy and issue
  directions far broader in both scope and form
• Matters overlap with Authoritys powers and
  function
• Need a clear separation of powers between
  Minister and Authority
• Subsection 2 does not provide the same
  protections as set out in the IBA Act

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Chapter 2 Policy Regulation (3)

• Proposed remedy - insert section 13A(5)(c) (d)
  of IBA Act
• (c)  No such direction may be issued regarding
  the granting of a licence or regarding the
  amendment, suspension or revocation of a licence.
• (d)  No such direction may be issued which
  interferes with the independence of the Authority
  or which affects the powers and functions of the
  Authority.

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Chapter 2 Policy Regulation (4)

• The Bill departs from the current legislation
  that requires the Minister to consult with the
  Authority before making policy directions
• In order for proper planning, budgeting and
  regulation, it is important that the consultation
  requirement is maintained and enhanced

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Chapter 2 Policy Regulation (5)

• Propose that the regulation making powers are
  moved to the ICASA Act
• Propose that the regulation making powers be
  broadened to include any matter that is necessary
  or incidental to the exercise of the Authority's
  powers and functions and consistent with the Act
  and related legislation

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Chapter 3 Licensing

• Chapter 3 is the engine that drives the Bill, if
  the engine does not work the rest of the Bill
  will not work
• The licensing framework set out in this chapter
  is not workable
• New proposal on individual and class licensing

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Regulation
Generic provisions of the Bill apply to all
relevant activities
Standard licence conditions common to Individual
and Class licenses
Standard Licence Conditions common to Individual
Licenses
Special conditions
Undertakings
Exempt
Individual
Class
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• Malaysian Model

Less regulation
Licensees can compete in any of four markets
within the sector, i.e. Facilities, Connectivity,
Applications, and Content Applications
Individual
Class
Exempt
Licensed
Unlicensed
Two types of licenses are issued for each
category Individual Class. Only activities
with significant economic or social impact are
individually licensed.
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Chapter 3 Licensing (2)

• The Bill has the unintended effect that large and
  small communications networks services will be
  dealt with as individual licensees
• Propose that individual and class licences be
  granted in all licence categories
• Need authority to exempt certain activities from
  licensing

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Proposed Model
4 licensable activities or markets
Individual
Class
Exempt
Licensed
Unlicensed
Two types of licenses are issued for each
category Individual Class.
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Chapter 3 Licensing (3)

• National economic policy may require Minister to
  retain control of market entry for large
  communication network services
• However, section 5(4) (5) need to be amended to
  prevent the consequence of limiting small
  operators e.g. self provision of broadcasting
  signal distribution

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Chapter 3 Licensing (4)

• 25 years for communication network services, but
  Authority to be given discretion to set different
  terms for other categories

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Chapter 3 Licensing (5)

• Section 9(2)(e) requires the Authority under
  individual licences to submit proposed licence
  conditions to the Minister to approval
• This involves more Ministerial involvement than
  currently envisaged under the Telecommunications
  Act
• Unconstitutional in relation to broadcasting
  services
• Recommend deletion

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Chapter 3 Licensing (6)

• Section 10 as currently phrased negates a public
  process for the amendment of licences
• We have made detailed proposals on substantive
  and procedural issues in this regard
• E.g. local loop unbundling

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Chapter 3 Licensing (7)

• Empowerment, Ownership and Control
• Authority needs mandate to deal effectively with
  empowerment, ownership and control
• Proposal on regulatory power to promote
  empowerment and limits on ownership and control
  together with statutory limitations on
  broadcasting services as in IBA Act

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Chapter 13 Transitional Licensing Issues

• Envisages a huge re-regulation and licence
  conversion project
• New regulation for implementation of Bill will
  also be required
• Will require the allocation of considerable
  financial and human resources
• This may divert the Authoritys attention from
  opening new markets and licensing new entrants

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Chapter 13 Transitional Licensing Issues (2)

• Bill requires all licences to be converted in 12
  months
• We propose that Authority set the timeframe for
  converting licences and regulations
• Licence commencement raises a number of policy
  and operational issues

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LICENCE CATEGORY INDIVIDUAL CLASS EXEMPT
Communication Network Services Common and private carrier networks for broadcasting signal distribution Carrier of carriers a telecommunication facility a local exchange facility a telecommunication system a mobile cellular telecommunication network a public switched telecommunication network an under service licence area network a radio apparatus a radio station any other similar facility or network prescribed as a communication network requiring an individual licence Broadcasting signal distribution Category III Self Help Stations Any other similar facility or network prescribed as a communication network requiring a class licence Wireless LAN
Communication Services Multiplex service Common and private carrier broadcasting signal distribution services International telecommunication services Local access telecommunication services Mobile cellular telecommunication services Mobile data telecommunication services National long distance telecommunication service Public switched telecommunication services Under service licensed areas and Any other services prescribed as communication service licences requiring an individual licence. Value Added Network Services Multimedia Services Any other services prescribed as communication services requiring a class licence Application services
Broadcasting Services Public, commercial and community television and sound broadcasting services Any other broadcasting service prescribed as a broadcasting service requiring an individual licence Low power sound broadcasting Any other broadcasting service prescribed as a broadcasting service requiring a class licence Internet content services (excludes cable subscription broadcasting)
Radio Frequency Spectrum 1800 MHz 3G 900MHz Spectrum which requires exclusive assignments and co-ordination with neighbouring countries and Any other spectrum licences prescribed as requiring an individual licence WiFi 2.4 GHz and 5.8 GHz Maritime ship station licences Radio amateurs Short range devices Citizen Band (CB) Radio Any other spectrum licences prescribed as requiring a class licence. Wireless LAN
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Chapter 4 5

• The Authority has made several technical and
  drafting amendments to Chapter 4 and 5
• We refer the Committee to our written submission

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Chapter 6 Technical Equipment Standards

• Re-title chapter Equipment Type Approval and
  Standards
• Communication equipment /facilities cannot be
  exempted
• Self declaration based on EU RTTE Directive is
  not applicable for SA

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Chapter 7 Interconnection

• Interconnection underpins successful competition
• Bill should remain at level of principle and
  given effect to by regulation
• More inclusive, subject to technical feasibility
  and efficient use principles

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Chapter 8 Communication Facilities Leasing

• Critical enabler of competition and lower prices
• Bill should remain at level of principle and
  given effect to by regulation
• Support definition of essential facility

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Chapter 8 Communication Facilities Leasing (2)

• Undersea cables / landing station to be declared
  essential facility
• Authority to be given the power to regulate
  activities which have an effect in the Republic
• Unbundle local loop

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Chapter 9 Broadcasting Services

• This chapter should consolidate the important
  policy and licensing provisions of the IBA and
  Broadcasting Act
• Omission of provisions could lead to regulatory
  vacuum
• e.g. SA content quotas
• Authority proposes power to encourage code on
  commissioning practices
• Definition of multiplexing

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Multiplex Service
Digital Broadcasting Value Chain (STB Set top
box)
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Chapter 10 Consumer Issues

• Harmonise code of conduct and customer service
  charter provisions in the Bill
• Propose specific provision for people with
  disabilities
• Establish a consumer advisory panel

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Chapter 11 General

• Proposals on re-organisation of chapter
• Offences and penalties Bill makes all
  contraventions a criminal offence, resulting in
  Authority losing jurisdiction over licensees
• Proposal submitted to remedy this concern

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Chapter 12 Universal Service Agency

• Broadcasting service licensees already make
  contributions to MDDA
• Bill would subject Broadcasting service licensees
  to double taxation

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Schedules

• An audit is needed to ensure that critical
  provisions of the Telecommunications Act and the
  IBA Act are not lost in the repeal and
  consolidation process e.g. e-rate
• Bill refers to provisions that do not exist in
  ICASA Act
• As we are not aware when an ICASA Act Amendment
  Bill will be tabled, we have proposed necessary
  amendments to the ICASA Act in the schedules to
  the Convergence Bill

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Concluding Remarks