Representations by M-Net, MultiChoice and Orbicom on the Electronic Communications Amendment Bill

1. Representations by M-Net, MultiChoice and Orbicom on the Electronic Communications Amendment Bill 31 October 2007

2. Panel Aynon Doyle : Regulatory Affairs Manager, MIH Group Karen Willenberg: Director of Regulatory and Legal Affairs, M-NET Amanda Armstrong : Director, Werksmans

3. Support objectives We support Government’s objectives: • to expand availability of access to information, communications and technology infrastructure and services; and • to make strategic interventions in infrastructure investments

4. EC Act already allows these objectives to be met • EC Act in its current form allows any person, including a state-owned entity, to apply to ICASA for any one of these licences: • electronic communications network services, subject to s5(6) • broadcasting services • electronic communications services • s5(6) of EC Act provides that in the context of managed liberalization, ICASA may only accept and consider applications for individual electronic communications network service licences in terms of a policy direction issued by the Minister in terms of s3 of EC Act

5. Minister’s power • Thus, EC Act in its current form empowers the Minister to issue to ICASA a policy direction that it may accept and consider applications for individual electronic communications network service licences • The combination of liberalising the electronic communications sector, the application of the competition provisions of EC Act and of Competition Act, and market forces, will result in objectives of Government being realised

6. Implications of Bill • Bill proposes insertion of new subsection (13) into s5 to provide for a separate framework for the licensing of “public entities” by ICASA • “Public entity” has meaning as defined in PFMA • Public entities within the communications sector include SABC, Sentech, Telkom, Telkom Media, possibly Vodacom, Eskom (Easitel) and Transnet (Transtel)

7. Implications of Bill • To suggest that these public entities, who in many cases are dominant operators in the sector, be licensed in any manner different from other entities conflicts with Government’s policy of managed liberalization of electronic communications sector • These public entities compete directly with private entities in electronic communications sector • For there to be fair competition between competitors within a category of service, those services must be licensed according to identical processes and subject to identical substantive considerations and conditions

8. Constitution, ICASA Act and EC Act • s192 of Constitution: National legislation must establish an independent authority to regulate broadcasting • ICASA Act establishes ICASA as an independent body • ICASA Act enjoins ICASA to be impartial

9. Constitution, ICASA Act and EC Act • It is for this reason that ICASA must deal with all matters pertaining to the licensing of services, and that all persons requiring a licence are treated equally • Hence, s3(3) of EC Act • Thus, the Bill, as currently drafted, would be in contravention of Constitution, and relevant provisions of ICASA Act and EC Act

10. Proposed solution • In order to avoid these difficulties, but still achieve Government’s objectives, amendments to EC Act ought to be limited to an amendment to paragraph (d) of s2 of EC Act: “(d) encourage investment, including strategic ICT infrastructure investment, and innovation in the communications sector”

11. Proposed solution • This amendment will enable Minister, in terms of s3 of EC Act, to issue to ICASA a policy direction to achieve Government’s objectives • If this proposed solution is adopted, consequential amendments required to • title of Bill • Preamble • item 1 (the insertion of the definition of “public entity” would no longer be needed) • item 2 (along the lines of our written proposals)

12. Conclusion • We therefore propose that the EC Act be amended in line with our proposal stated above Thank You