Convergence Bill [B9-2005] Presentation to Parliamentary Portfolio Committee on Communications 24 May 2005

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

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

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

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

Chapter 2: Policy & Regulation Ministerial policies and policy directions Entrenches co-regulatory system between Minister and Authority Involves diminution of Authority’s existing powers Could provide serious in-roads into Authority's functional independence

Chapter 2: Policy & Regulation (2) Minister’s power to make policy and issue directions far broader in both scope and form Matters overlap with Authority’s 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

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.” Chapter 2: Policy & Regulation (3)

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 Chapter 2: Policy & Regulation (4)

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 Chapter 2: Policy & Regulation (5)

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

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 IndividualClass Exempt Regulation

Malaysian Model Network Facilities Network Services Applications Services Content Services IndividualClassExempt LicensedUnlicensed Less regulation Licensees can compete in any of four markets within the sector, i.e. Facilities, Connectivity, Applications, and Content Applications Two types of licenses are issued for each category – Individual & Class. Only activities with significant economic or social impact are individually licensed.

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 Chapter 3: Licensing (2)

Proposed Model Radio Frequency Spectrum Broadcasting Services Communication Services Communication Network Services IndividualClassExempt LicensedUnlicensed 4 licensable activities or markets Two types of licenses are issued for each category = Individual & Class.

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 Chapter 3: Licensing (3)

25 years for communication network services, but Authority to be given discretion to set different terms for other categories Chapter 3: Licensing (4)

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 Chapter 3: Licensing (5)

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 Chapter 3: Licensing (6)

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 Chapter 3: Licensing (7)

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 Authority’s attention from opening new markets and licensing new entrants

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 Chapter 13: Transitional Licensing Issues (2)

LICENCE CATEGORYINDIVIDUALCLASSEXEMPT 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

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

Chapter 6: Technical Equipment & Standards Re-title chapter : Equipment Type Approval and Standards Communication equipment /facilities cannot be exempted Self declaration based on EU R&TTE Directive is not applicable for SA

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

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

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

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

Multiplex Service Digital Broadcasting Value Chain (*STB = Set top box)

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

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

Chapter 12: Universal Service Agency Broadcasting service licensees already make contributions to MDDA Bill would subject Broadcasting service licensees to double taxation

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

Concluding Remarks