Regulatory Framework for ICT and Postal Services in South Africa

1. SELECTED ICT LEGAL AND REGULATORY ISSUES PRESENTATION BY LUTHANDO MKUMATELA

2. INRODUCTION AND CONTEXT • Importance of the context. • Regulation of ICTs and postal services in the international context (ITU,UPU; interests of developed and developing countries, template for regulation. • “Domestic” factors influencing regulation of ICTs in SA. (SA history and its socio-economic legacy. A history of telecommunications before and after the establishment of Telkom (with fixed lines), a constrained Sentech with a multimedia licence, a legacy of the two cellphone operators, A protected SAPO. SABC and Multichoice. A history of ICTs and postal services for urban and rural, for the privileged and the disadvantaged. The intent to grow the industry and address the issues of access. The commitment to achieve the objective of realising economic transformation of the sector as envisaged in the statutes.

3. CONVERGED REGULATION VERSUS SINGLE- SECTOR REGULATION • SINGLE SECTOR REGULATION is pursued by stand alone regulatory entities which employ legal and regulatory instruments that are expressly sector specific. E.g. IBA, SATRA, and the Postal Regulator at DoC. • The regulatory environment reflects a very constrained, if any, appreciation of the advances made by the ICTs to bridge the yester year divide of services and markets. • Single sector regulation in the era of convergence of technologies creates many regulatory loopholes. Market players cross the traditional sector or industry demarcations. • It forces the regulator and the industries to engage in arbitrage, separating broadcasting from “telecommunications” or postal from “telecommunications”. Online/ecommerce transaction – product delivery by postal; TV set vs a cellphone. Single sector regulation tends not to optimised resources (duplication of skills and financial resources.

4. CONVERGED vs SINGLE SECTOR REGULATION cont. • CONVERGED REGULATION was introduced by ICASA Act when it established ICASA. • However, ECA, Broadcasting Act and Postal Services Act to a large extent maintain the traditional sectoral distinctions. In case of a conflict among the underlying ICT sector statutes the provisions of the ECA prevail. • An observation of the thinking of key role players with regard to convergence reveals continuing substantive debates: 1. Names of the government department/s that are administering communications and/or ICTs. (DPT, DoC, DTPS, recently DoC - for broadcasting and lastly Communications &Digital Technologies. 2. Operators and industry associations (NAB, SACF, BCCSA). 3.The ICT White Paper introduces a Content Regulator and an Economic Regulator. (The ICT White Paper anticipated that the broadcasting sector would deliver its own sector specific policy instrument. • The Domain Name Authority in a converged regulation.

5. THE DIMENSIONS OF REGULATORY EFFECTIVENESS • Setting of clear and measurable objectives of regulation – policy, legislation • Obstacles frustrating effectiveness (1.rigidity of rules, 2.contest of roles 3.lack of resources- HR and Fin. 4. weak monitoring and enforcement. (external factors -country & industry issues). • ENVIRONMENT: 1. Design/ organisational framework: Icasa Act:Policy vs implementation (clarity of roles); Accountability of the regulator – Parliament: independence of the regulator. • 2. Icasa processes, procedures and RESOURCES. (appropriation).

6. DIMENSIONS OF REGULATORY EFFECTIVENESS cont. • MEASUREMENT TOOLS: Policy, legislation, strat plans, annual plans, ICASA Act – Performance Review Panel / performance contracts (PMS). • OUTCOMES: (by reviews, reports and enquires): Investments, competition, universal service and access, transformation • i.e.(objects of the Act and delivery of the targets of the annual plans). • Significance of enquiries by other institutions! (Stats an Compt)

7. REGULATORY INSTITUTIONAL STRUCTURES • Icasa Act establishes the regulatory institutional structure/s and defines the roles of all key stakeholders playing a role in the regulation of the communications, broadcasting and postal services. FOLLOWING IS AN ANALYSIS OF ICASA: • Admin Structural Issues: addressing the issue of independence. 1.Accountability/Reporting – Ministry and legislature, 2.Financing – by appropriation. 3. Appointment of councillors (and tenure issues). 4. Jurisdiction i.e. institutions that can overturn the decisions of ICASA (none but the courts) • Relationship between Icasa and the Competition Commission (the

8. REGULATORY INSTITUTIONAL STRUCTURES (cont) • Regulatory responsibilities /Clarity of roles: • The regulatory framework is established by the Ministry (i.e. policy and legislation. ICASA performs the role of developing regulations • Implementation and administration is executed by ICASA. (licensing, spectrum, numbering, price regulation, universal service, quality of service. Objects of the sector statues - full spectrum.

9. SELF REGULATION VERSUS CORE REGULATION • CORE REGULATION: Objectives of core regulation – a). transforming the market new entrants for competition – (pricing and access); b). addressing ownership and content issues; • South African approach – Transformation through managed liberalisation: a) commercialisation of DPT to Telkom, SAPO, Sentech etc. b) introduction of competition (Telkom and SAPO protected). • 1. “The idea of a “mature” market and the reluctance to introduce self regulation (argument being - avoidance of market failure or continuation of managed liberalisation). • 2. Prevailing need for market reviews or assessments. to consider movement from core to limited self regulation of certain aspects. • NB all takes places under the established regulatory framework.

10. SELF REGULATION VERSUS CORE REGULATION • SELF REGULATION stakeholders regulate their activities using codes of conduct. broadcasters BCCSA, ASA. Situation of telecoms and postal. • Conditions of success for self regulation: a) Code of conduct be clear and be accepted by most stakeholders and by all the big industry service providers. b) the code must promote the common goals and interests of the service providers. • The regulator to be on the alert against the creation of cartels that form barriers against new entrants and /or new regulatory dispensation.

11. SELF REGULATION (cont) • Self regulation appears to lower the regulatory costs – (avoidance of regulatory hearings conduct through the regulator to solve disputes). • Therefore, maturity of the market and realisation of determined objectives allows movement from core to self regulation. • Combination of core and managed self regulation possible(BCCSA). • Self regulation ideal for fast changing markets but to avoid creation of cartels. • The codes to comply with the letter and spirit of the Statutes.