1. SUBMISSION ON CONVERGENCE BILL
(Bill No 9 of 2005)
Prepared for:
Parliamentary Portfolio Committee on Communications
27 May 2005

2. Team
Zubair Munshi
Linden Petzer

3. Opening Remarks
Orbicom welcomes the introduction of Convergence in South Africa
Convergence represents significant opportunities for the country in general
Orbicom is very keen and eager to participate in the convergence opportunities
Orbicom commends the DoC on the initiatives that have been taken in the process as evidenced in the Convergence Bill
Purpose of this presentation is not to repeat our written submission, but to emphasise certain aspects of principle and to clarify certain important matters
We refer the committee to our written submission wherein we have made specific recommendations to the Bill

4. Orbicom’s View of Convergence
Before we begin we deemed it appropriate to first begin by defining what we believe Convergence actually is
CONVERGENCE IS THE CONVEYANCE OF ANY CONTENT OVER ANY NETWORK
By implication it would therefore require a separation of Content from Carriage
Reflected in the EU directive on Convergence
“It is necessary to separate the regulation of transmission from the regulation of content…”

5. SA Constitutional Considerations
S192 of the Constitution provides for the separate and independent regulation of broadcasting
In a truly converged scenario, it is difficult to separate broadcasting from other forms of content
Consequently - All content, including broadcasting services, should be regulated in accordance with the principles of s16 and s192 of the Constitution

6. Objects of Act
Orbicom supports the objects of the act (Section 2 of the Bill) in general, but in particular would like to draw attention to the following:
Encourage investment and innovation on the communications sector
Promote competition within the sector
Promote an environment of open, fair and non-discriminatory access to communications networks
Promote a clear allocation of roles and assignment of tasks between policy formulation and regulation within the communications sector
Ensure the provision of a variety of quality communications services at reasonable prices

7. ITU Principles on Convergence
Balanced, clear, consistent, predictable, comprehensive and transparent;
Consistent regulatory treatment of similar issues;
Be pro-competition;
Flexible to adopt new developments;
Promote multimedia delivery;
Ensure reliability and interoperability of networks;
Promote efficient infrastructure development;
Promote open and efficient use of spectrum;
Prevent abuse of market power;
Clarify and allocate content liability;
Protect consumer interests

8. EU Regulatory Framework
Common regulatory framework for electronic communication networks and services
Directive on the authorisation of electronic communications networks and services
Directive on access to, and interconnection of, electronic communications networks and associated facilities
Directive on universal service and users rights relating to electronic communications networks and services
Directive on the processing of personal data and the protection of privacy in the telecommunication sector

9. Principles to Achieve Objectives
We believe that in order to achieve the objects the following principles need to be applied to the bill:
Balanced, clear, consistent, predictable, comprehensive and transparent
Pro-competition
Promote efficient infrastructure development
Prevent abuse of market power
Clear distinction between the powers of the minister and the powers of the regulator
Definitions need to be clear and unambiguous
Transitional procedures must be fair and equitable particularly i.t.o timing

10. Licensing Model Applications Content Service
Communications Service/ Broadcasting Service
Communications Network Service/Spectrum Licence
Increasing Level of Regulation

11. Digital Broadcasting Value Chain
Communication Network Service
Content Services
Application Service
Content
Programming Supply
Channel “Supplier”
Needs Authorisation ONLY
Very Light Touch enabling regulation
Content Publisher
Equivalent to a Broadcaster as defined in the Broadcasting Act
Content / Broadcasting License Required
Multiplex Operator
UNREGULATED ACTIVITIES
NO LICENSE REQUIRED
CA & STB
EPG
SMS
API
Equivalent to a Signal Distributor in terms of the Acts
Communicatio n Network Service License Required
Spectrum user
Must be licensed
Network Operator
Consumer
Cannot and should not be regulated
Has the right to freedom of choice
Subscriber

12. Convergence Licensing Matrix
ACTIVITY
EXTENT OF REGULATION
LICENSE REQUIRED
OBLIGATIONS
Examples
APPLICATIONS
Minimal No
None
Multiplex Operator i.e CA, SMS, EPG
CONTENT
Low
Yes - Class License
Yes
Broadcaster, Content Producer
COMMUNICATIONS SERVICE
Medium
Yes - Individual License
Sales Agent, Installer
COMMUNICATIONS NETWORK SERVICE / SPECTRUM LICENSE
High
Signal Distribution Services

13. Technology Neutrality Object of Act: Encourage investment and innovation in the communications sector
Bill is not technology neutral. Section 10(c)
If the licenses are technology neutral in the first instance there would be no need for amendments due to technological change
Technology neutrality is a fundamental principle that ought to be observed
Moreover innovation and investment in the sector is likely to be higher if service licensing were not linked to Technology
The Nigerian NCC has shown that technology neutral licensing can work and does work

14. Essential Facilities Object of Act: Promote an environment of open, fair and non-discriminatory access to communications networks
Distinction between “communications facilities” and “essential communications facilities”.
Orbicom submits that a distinction be made between competitive markets and monopoly markets.
Communications facilities - facilities required to provide a communications network service or a communications service.
Essential communications facilities are facilities that cannot be duplicated for economic, technical or environmental reasons I.e submarine cables, radio and broadcasting high sites, etc.
Communication facilities regulated in terms of competitive, commercially-based market principles.
Essential facilities require a duty to provide access at cost.

15. Radio Spectrum Object of Act: Promoting investment and innovation within the sector and provision of a variety of services
Orbicom would prefer that the committee refers to our written submission for a detailed position on the Spectrum Issues in the Bill
Numerous drafting changes have been suggested in our written submission
We strongly urge the committee and the drafters to please take due consideration of these recommendations
Orbicom is willing and hereby offers our assistance to the department in this matter if so required

16. Procedural Clarity Object of Act: Promote and Facilitate the convergence of Telecommunications and Broadcasting Signal Distribution
Orbicom would like to urge the committee to ensure that adequate care and consideration is taken to ensure that the necessary procedural provisions in the current legislation are carried over
In addition the amendment to the ICASA Act has not yet been made public
These amendments may have a substantial impact on the provisions contained in the convergence bill
Orbicom would kindly urge the committee to consider allowing operators to make written comment to the Convergence Bill once the ICASA Act amendments have been published.

17. Transitional Provisions Object of Act: Promoting investment and innovation within the sector and provision of a variety of services
Prejudice could be caused if different dates apply in respect of the issuing of new licences to the various licence holders.
a single effective conversion date should apply to the conversion date of all existing licences into the new categories of licence
single effective conversion date no later than 12 months from the date of commencement of the Act,

18. Transitional Provisions Object of Act: Promoting investment and innovation within the sector and provision of a variety of services
No provision in the Bill for amendment of existing licences during the transitional period between commencement date of the Act and the effective conversion date.
This has the effect of freezing the existing licence terms and conditions and is likely to inhibit convergence and the innovation of new services and facilities leading up to the effective conversion date.

19. Transitional Provisions Object of Act: Promoting investment and innovation within the sector and provision of a variety of services
ICASA should give priority to pending applications
in an analogue broadcasting environment, frequencies are assigned to a particular broadcaster,
In a digital environment, spectrum will have to be licensed to the network service licensee

20. Convergence Critical Success Factors
Clear, unambiguous definitions
Appropriate Licensing Framework
Technology Neutrality
Access to Essential Facilities
Efficient Spectrum Management
Procedural Certainty
Transitional Provisions

21. Conclusion
Convergence implies the conveyance of any content over any network
In Convergence, there needs to be a separation of
Carriage from
Content
There are some challenges in the current Bill that need to be addressed - however these are not insurmountable
The Bill is a critical milestone in the telecommunications and broadcasting legislation
Orbicom looks forward to the expeditious enactment of the Bill