THE CONVERGENCE BILL (Combination / Merger of all ICT Acts) Presentation to PC on Communications Parliament in Cape Town 2 June 2005 Nhlanhla Jethro Tshabalala

Prepared by NJ Tshabalala2 PURPOSE OF MY PRESENTATION INTRODUCE MYSELF AND DEMOSTRATE TO THE PANEL MY ICT UNDERSTANDING AND COMPETENCIES DEMOSTRATE MY THINKING AND POSITION ON WAYFORWARD FOR ICT SECTOR. CONVINCE THE PANEL TO APPOINT ME TO LEAD ICASA WITH CONFIDENCE.

Prepared by NJ Tshabalala3 OVERVIEW Process followed Objectives of Convergence Bill Summary of Chapters Convergence Mapping Licensing Transitional Provisions Other provisions Observations Conclusions

Prepared by NJ Tshabalala4 PROCESS FOLLOWED Draft 1 for comment on 25 July 2003 Industry wants a single piece of legislation that would replace existing statutes, it seems the Ministry wants to amend underlying legislation only. Bill gazetted on 16 February 2005 Repeals IBA and Telecom’s Acts Bill could be enacted in 2005

Prepared by NJ Tshabalala5 OBJECTIVES OF THE BILL to promote convergence in the broadcasting, broadcasting signal distribution and telecom’s sectors and to provide the legal framework for convergence of these sectors to make new provision for the regulation of communications and network services to provide for the granting of new licences and for new social obligations to provide for the control of the radio frequency spectrum to provide for the continued existence of the USA, and to provide for matters incidental thereto

Prepared by NJ Tshabalala6 CHAPTERS 1:explains primary objectives of Bill, incl promotion of convergence, encouragement of innovation in the comm’s sector and promotion of competition 2:delineation of powers between Minister and ICASA whereby the Minister formulates policy and ICASA implements policy, issues licenses and oversees the comm’s sector through regulation 3:creates legal framework for issuing licenses and the attendant rights and obligations of licensees

Prepared by NJ Tshabalala7 CHAPTERS cont… 4: defines rights and obligations of comm’s network services licensees when entering upon public and private property 5: vests Minister with authority to manage the radio frequency spectrum used by security services and ICASA with authority to manage other spectrum 6: governs approval and use of comm’s equipment and facilities and radio apparatus in the Republic 7: requires comm’s network service licensees to ICX their networks and defines guiding principles that will govern licensees’ interconnection agreements

Prepared by NJ Tshabalala8 CHAPTERS Cont… 8: requires comm’s network service licensees to lease network facilities to other licensees and defines principles that will govern leasing agreements 9: establishes legal framework allowing broadcasting services to participate in convergence of comm’s and broadcasting services while retaining critical policies 10: directs ICASA to prescribe regulations to protect consumers, including consumer code of conduct

Prepared by NJ Tshabalala9 CHAPTERS Cont… 11: (a) provides for establishment of an ICT for government initiatives. (b) designates ICASA as ‘‘regulatory authority’’ iro the comm’s sector under the Competition Act (c) empowers ICASA to take certain actions to ensure fair competition in the sector (d) sets maximum penalties and fines and, (e) carries forward from the Telecom’s Act the application of NP & CPS, directory services and 112 Emergency Centres to the new converged services

Prepared by NJ Tshabalala10 CHAPTERS Cont… 12: provides for the continued existence, financing, administration and management of the USA 13: provides for transition and conversion of existing regulations and licenses to ensure that they conform to the provisions of the Bill

Prepared by NJ Tshabalala11 CONVERGENCE MAPPING: Pre-Convergence BroadcastersSignal Distribution (Sentech, Orbicom, etc.) End Users TV & Radio Sets VANS, ISP, etc. Telecommunication Networks (Telkom, SNO, Sentech, USALs) Computers & Data Terminals Voice Data Voice/Data Terminals Broadcast Content Information Services End Users End Users Fixed Networks (Telkom, SNO, USALs) End Users Mobile Networks (MCOs, USALs) BROADCASTING (Broadcasting Act, IBA Act, ICASA Act, Sentech Act) ENHANCED DATA SERVICES (Telecommunications Act, ECT Act, ICASA Act) VOICE/DATA CONVEYANCE SERVICES (Telecommunications Act, ICASA Act)

Prepared by NJ Tshabalala12 CONVERGENCE: SERVICES Voice Broadcasting Data Communications Services Information Services

Prepared by NJ Tshabalala13 CONVERGENCE: NETWORKS Signal Distribution Mobile Fixed Packet Switched Circuit Switched Communications Networks

Prepared by NJ Tshabalala14 CONVERGENCE: CPE TV & Radio Sets Computers Data Terminals Communications Terminals Fixed Telephones Mobile Telephones

Prepared by NJ Tshabalala15 CONVERGENCE MAPPING: Post Convergence C0MMUNICATION SERVICES (Convergence Act) SERVICE PROVIDERS (Broadcasters VANS, ISP, etc.) COMM APPLICATION SERVICES COMM’S NETWORK SERVICES COMM SERVICES END USERS VOICE DATA CUSTOMER PREMISES EQUIPMENT END USERS END USERS

Prepared by NJ Tshabalala16 LICENSING REGIME 3 tier horizontal licensing regime Comm’s Network services Comm’s services Application services 3 types of licensing methods Individual Class exemptions

Prepared by NJ Tshabalala17 CONVERGENCE MAPPING: Licensing INDIVIDUAL LICENCES CLASS LICENCES COMM SERVICES APPLICATION SERVICES COMM NETWORK SERVICES SPECTRUM

Prepared by NJ Tshabalala18 LICENCES CONVERSION PSTS Licence VANS Licence COMM NETWORK SERVICE COMM SERVICE APPLICATION SERVICE COMM NETWORK / COMM ?

Prepared by NJ Tshabalala19 TRANSITIONAL PROVISIONS All existing licences to remain valid for their full duration Vertical licences to be converted to horizontal licences with the agreement of each licensee: all existing rights preserved? Additional network service licences by invitation All existing network operators to be confined to their vertical markets until licences have been re- issued (12 months)

Prepared by NJ Tshabalala20 OTHER PROVISIONS Roles of Minister & Regulator ICASA has full responsibility for regulatory processes The Minister has policy-making powers Competition issues ICASA’s concurrent jurisdiction with the Competition Commission over general competition matters ICASA retains exclusive jurisdiction over sector specific competition matters

Prepared by NJ Tshabalala21 OBSERVATIONS There will be enormous regulatory load stemming from converged legislation. Encroachment of rights will increase. Uncertain regulatory environment Weak statutory protection Change will encourage opportunistic market behaviour Convergence as a cover for rapid liberalisation

Prepared by NJ Tshabalala22 OBSERVATIONS Cont... Raised expectations (VANS, Sentech, etc.) may cause further disputes in the market. How independent is the Regulatory. How effective is the Regulatory in influencing the policy.

Prepared by NJ Tshabalala23 CONCLUSIONS Ability to compete is the preferred solution Convergence is for rapid liberalisation ICASA to enable the sector to increase GDP contributions from 4% to 20% in 5 yrs. ICASA to prescribe additional terms and conditions where licensee has SMP, control over essential facilities or vertically integrated Communications network services licensees must interconnect and lease facilities ICX & FL Agreements still to be filed with ICASA

Prepared by NJ Tshabalala24 CONCLUSIONS cont... Post-convergence presents threats and opportunities Manage already raised expectations (VANS, Sentech, etc.) which may cause further disputes in the market Non-compliance with Convergence Act should have a fine of up-to 10% of annual turnover

Prepared by NJ Tshabalala25 Questions?

Prepared by NJ Tshabalala26 Concluding thought for the day “ If you are not confused by what`s going on around you, you`re obviously not in touch” - Dr Tom Peters THANK YOU