Telecoms Industry under threat: What the media and public need to know

27 February 2017
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Free Market Foundation

Media Background Briefing Paper

February 2017

 

National Integrated *ICT Policy White Paper published October 2016

*Information and Communication Technologies

 

What the media and public need to know

 

Purpose of document

This document aims to provide a background and context on the National Integrated ICT Policy White Paper, for the media to understand what is at stake, inform the public and other stakeholders and ask the right questions of government. Everyone needs to be aware of the contents and implications.

 

Contents: ICT Policy / Media Q&A

1.             Free Market Foundation (FMF) interest in ICT Policy

2.             Context

3.             What’s happening in ICT?

i.               What is ICT?

ii.             Why is ICT policy important?

iii.           Policy in a nutshell

iv.            Headlines

v.              The big issues

4.             Contents of the White Paper (WP)

i.               What is WOAN and why is it significant?

ii.             Open Access – what does this mean?

iii.           What is spectrum and why the big deal?

iv.            Expanded role of government

5.             Consultation

i.               What has been industry reaction?

ii.             What about public and industry consultation?

iii.           What is a SEIA and why so critical?

6.             Industry bodies and new fund

i.               What about ICASA and others?

ii.             What about the new fund?

7.             Is competition lacking in the mobile industry?

8.             So what’s good in the White Paper?

i.               What are the “stated intentions” that are “good”

9.             So what now?

10.         Key questions for the media

 

Appendix 1: Socio Economic Impact Assessment (SEIA)

Appendix 2: Glossary

 

1.       Free Market Foundation (FMF) interest in ICT Policy

The FMF is a policy analysis institute primarily dedicated to (a) preventing counter-productive government intervention, taxation and spending, and (b) constitutionalism, due process and the rule of law. As such we are concerned with all new policy. We are responding to threats of mobile data price control and, more importantly, to the far-reaching implications of the White Paper which introduces greater state control and fewer independent institutions. It also proposes what amounts to nationalisation of the vital communications infrastructure and expropriation of private assets.

 

The FMF is particularly concerned with the lack of the Cabinet mandated Socio Economic Impact Assessment (SEIA) required to precede all new policy. Despite calls for a SEIA, the Department of Telecommunications and Postal Services (DTPS) has yet to produce this and it appears unlikely that it has been done.

 

We are also concerned about whether the Policy followed due process, has complied with the Constitution and followed the rule of law.

 

 

2.       Context

           “This Policy has the potential to eradicate the advances of SA’s Internet success story”

 

The National Integrated ICT Policy White Paper is bad policy. It places government in control of a critical economic sector, effectively nationalises a private industry, creates a government monopoly, proposes to expropriate private property, introduces a new fund raised from private companies into government hands, scraps existing independent regulator ICASA, introduces regulatory complexity and new government controlled institutional bodies, lacks clarity and essential detail, failed to consult properly on key proposals, lacks a mandated Socio Economic Impact Assessment, and opens the door to more corruption and patronage.

 

Although a variation is being piloted in one African country and under different circumstances, in its current form the proposed model is untried and untested anywhere in the world. There are questionable backroom dealings and vested interest agendas. If enacted as it is, the policy will damage, if not destroy, a successful private sector industry and create another SAA, Eskom and Post Office. Mobile consumers will face deteriorating coverage and quality of access and miss out on new technologies and developments. Data prices are likely to rise, not fall. The industry is stunned.

 

Information Technology (IT) in South Africa

IT is arguably the greatest playing-field-leveller the world has known. It is hard to think of anything which has done more to reduce inequality – virtually everyone can now afford benefits that never existed a few years or decades ago, and, when introduced, were accessible only to the rich. The world is headed for “the internet of things” – virtually everything will to some extent be data-driven and connected. It is crucial, if we are to keep up with the world’s most rapidly-advancing field, to “get it right”. The world’s experience shows that private competition is overwhelmingly better than rather bureaucratic monopolies. Yet, South Africa is set to move this critical sector towards a government-controlled monopoly. The new nationalized network is another SAA, Eskom, Post Office in the making.

 

3.       What’s happening in ICT?

-               In October 2016, the DTPS published the ICT Policy White Paper (the WP). This introduces radical new directives, which will have far reaching consequences for the ICT sector. Minister of Telecommunications and Postal Services Cwele intends to start work on a Bill to implement the policy in March 2017.

-               Time is short for action.

-               Everyone will be affected: consumers, business, schools, higher education and industry – the entire SA economy.

-               This is not just an IT issue. The media, the business sector and consumers need to pay attention to what is happening in the ICT space because the implications are dramatic.

 

What is ICT?

Information and Communication Technologies (ICT) provides the framework and infrastructure for every aspect of mobile technological communications in society including business, education, media, broadcasting, government and much more.

 

ICT (Information and Communication Technologies) is an umbrella term that includes any communication device or application, encompassing: radio, television, cellular phones, computer and network hardware and software, satellite systems and so on, as well as the various services and applications associated with them, such as videoconferencing and distance learning. ICTs are often spoken of in a particular context, such as ICTs in education, health care, or libraries.

 

Why is ICT policy important?

-               SA’s Internet success story is one of the few since 1994 in terms of coverage, quality and access to mobile devices and out performs many of its developing country peers. It ain’t broken!

-               The National Integrated ICT Policy White Paper (the WP) sets out the framework for the development of South Africa’s ICT industry.

-               This industry provides the infrastructure, technologies, products, services and expertise that run the country’s access to and use of the Internet and mobile communications of any sort.

-               The WP sets out how high demand spectrum will be allocated.

-               It is an essential part of the economy.

-               What happens in the ICT space affects every citizen.

-               It is likely to be challenged in court meaning even more delays.

 

Anything else? Yes!

-               The industry and the economy as a whole is in urgent need of clarity and certainty on how ICT policy will unfold and be implemented.

-               The industry has been waiting for four years to receive clarity on government policy, meanwhile technology advances at an ever-faster rate.

-               However, the WP sets out what amounts to a wish list without providing the desperately needed clarity and finality on what will happen. The “how” is missing – even for a white paper.

-               Also, the government, via the DTPS, is taking control of what has been a successful private sector, but the DTPS is the same department that has failed to deliver on a single SA Connect goal and gave us the Postal Services.

-               If implemented in its current form, data prices are likely to rise, not fall, as competition will be curtailed among the essential infrastructure.

 

Policy in a nutshell

1.             Government move to centralise and control ICT sector.

2.             Another state-owned enterprise in the making.

3.             Nationalisation and expropriation of private assets.

4.             Another government created disincentive for essential investment.

5.             Disruption and damage to a successful private industry.

6.             Creates another opportunity for corruption and patronage.

7.             Dubious backroom dealings and agendas.

8.             No sign of Cabinet-mandated Socio Economic Impact Assessment (SEIA).

9.             Industry stunned by the Policy.

10.         Cannot separate the cost of data from ICT Policy. In current form likely to push costs up.

11.         South Africa is getting a model untried and untested anywhere in world.

12.         May be unconstitutional and contrary to the rule of law.

13.         Legal challenge likely.

14.         Essential investment is threatened: certainty and incentives absent.

15.         The White Paper is 180 pages of often incomprehensible language.

 

Headlines

-               Another state owned enterprise is in the making when the government effectively nationalises the network infrastructure and expropriates the private assets of the big players – MTN and Vodacom. Look out for WOAN – Wireless Open Access Network.

-               Essential investment will dry up as private sector incentive to improve and maintain infrastructure will be removed under open access (WOAN). Say goodbye to fast, reliable – and cheap – mobile access and new technologies.

-               A new fund to be created to drive access in rural areas – funded by the private sector and managed and controlled by – yes – the government – another opportunity for corruption and patronage.

-               ICASA and other independent industry bodies to be scrapped and their roles and responsibilities managed by new government bodies and the DTPS.  Government through the DTPS will control this critical sector – the department that brought us the success story of the SA Postal Services.

-               Questionable behind the scenes dealings and political agendas at play; vested interests appear to be driving the policy.

-               This new WOAN infrastructure has not been successfully implemented anywhere in the world. And where something similar has been tried, it has failed. Yet the Minister insists it has. Where is the “evidence” he talks about?

-               Lack of proper consultation required by the Constitution and that three critical policies appeared only in the final White Paper – not in the Review Report, which followed the Green Paper.

-               Critical Constitutional questions around due process, the rule of law and separation of powers.

-               The Cabinet mandated SEIA (Socio Economic Impact Assessment) is missing and believed not to have been done. All new policies and laws require a SEIA.

-               The White Paper is a wish list of admirable intentions but absolutely no detail or thought of how to implement. Behind closed doors in December, the Minister told industry representatives that he had no implementation plan, but that the Policy was a “done deal” and that – they – should come up with a plan. Rather like asking turkeys to plan Christmas for the major operators.

-               While there are some good elements and no one can argue with the stated intentions, the policy in its current form will not deliver – and worse – is counter-productive in several key aspects.

 

The big issues

-               The ICT Policy White Paper contains proposals that will have a far reaching and mostly negative impact on the industry especially the mobile network operators (MNOs): Vodacom, MTN, Cell C and Telkom. These are the guys who pay for the infrastructure today.

-               The large MNOs invest billions every year to build, maintain and improve the network infrastructure. Mobile networks require huge investment. MTN and Vodacom spent R20 bn last year combined.

-               The Policy amounts to nationalization and expropriation of private assets (infrastructure, technology and spectrum).

-               The WP contains policies that will seriously impact the provision of this essential investment, which means that SA users will be negatively affected.

-               Forget fast, cheap, reliable mobile Internet access via cell phones, tablets laptops and other devices, SA will fall behind its peers and users will have to wait for the latest technological advancement.

-               Maintenance, upgrading and new infrastructure will all be impacted.

-               And – there is no precedent anywhere in the world.

 

Anything else? Yes!

-               It appears that politics, vested interests and private agendas may be behind some of the more radical policy elements.

-                Inter departmental and inter-agency power squabbles and power struggles appear to be at play and impeding effective policy.

 

4.       Contents of the White Paper

Most of the key contentious proposals are contained chapter 9 – Opening Access: Infrastructure and supply-side issues.

 

There are five key areas of concern in the White Paper:

1.             A significantly expanded government role – in the form of the DTPS – which brought you the renowned SA Postal Service!

2.             Fundamental government interference with wholesale private sector markets.

3.             The development of a nationalised wholesale operator – WOAN: Wireless Open Access Network.

4.             The involuntary return of spectrum currently under license to MNOs.

5.             A nationalised government managed fund to drive infrastructure spending in rural areas – a perfect opportunity for patronage and corruption.

 

Three of the most critically-important issues only appeared in final White Paper and had no public and industry consultation (see below):

1.             The move to implement WOAN: Wireless Open Access Network.

2.             Access must be offered at cost based pricing.

3.             Taking back spectrum already allocated to operators who have invested heavily in this infrastructure.

 

What is WOAN and why is it significant?

WOAN = Wireless Open Access Network.

 

Instead of the current situation where the MNOs own large chunks of the infrastructure for their own use to provide for their own customer base, the government proposes a new model in which the network will be “owned” by a “public / private” partnership. So the MNOs will be asked to donate their private assets in a government-controlled network in return for a consideration or share – and hey presto – a new nationalised industry.

 

Just what SA needs when the current crop spent R 47 billion on “unauthorised expenditure” in 2016. A whole new SAA / SABC / Eskom in the making.

And this means what?

Well, for a start, there is no clarity on what basis this “return” might be. In proportion to what they put in? Their BEE status? Friends in high places? Political connections?

 

And in addition, since the MNOs will no longer own the network, this means the large operators will stop investing their billions and the infrastructure will deteriorate.  Why should they? Would you? This is a private business, not a charity.

And the WP introduces “cost-based” pricing?

 

What’s that? Is it important?

Currently the MNOs fund network infrastructure, provide services and make profits. In some cases, they allow Internet Service Providers (ISPs) to share their infrastructure on a commercial basis. Now that “commercial basis” will be replaced by “cost-based” pricing. Commercial and competitive investment incentives will be removed. Again, would you put your money in?

 

So why WOAN? Obviously it’s been a success elsewhere?

Far from it. Despite Minister Cwele’s assertions, there has been not a single successful implementation of a WOAN – anywhere. The only example is happening in a remote African country and is far cry from being rolled out. The Minister cites Mexico, Rwanda, and Russia, but not one of these examples is real.

 

Who will pay for WOAN?

A good question… government can’t. Ask Pravin Gordhan. And the private sector probably won’t.

 

Open Access – what does this mean?

Even industry experts are not sure what it means in the context of the WP. But, in general, it means the sharing of information, facilities and services on an equal basis. No one has an advantage.

  

And?

This means that the sector will be based on service competition rather than network competition – or more simply – it removes the incentive for network providers, MNOs, to provide the best network possible. Why should they? Would you – just so your competitors can benefit?

It stands normal business behaviour on its head.

 

Why do some players think this is a good idea?

Short-term thinking.

 

The idea of “open access” is predictably appealing to (some) ISPs because they hope it will give them enhanced opportunities for expansion and market share. This might be myopic because
(a) discretionary/administrative allocation might harm the best and reward the worst, and
(b) might entail short-term gain for long-term pain. In other words, they might find themselves stripped of the benefits of a dynamic, technologically cutting-edge world, and plunged into a static, stifling bureaucratic world.

 

What is spectrum and why the big deal?

Spectrum is the lifeblood of the mobile communications industry. MNOs cannot function without it and pay huge license fees to get it. The government is concerned that too much high demand spectrum is in private hands – the MNOs – and intends the WOAN to be a way to open up access to this lucrative sector for smaller players.

 

All wireless communications signals travel over the air via radio frequency, or spectrum. The TV broadcast you watch, the radio program you listen to, the GPS device that helps get you where you're going, and the wireless phone service you use to make phone calls and check Facebook from your smartphone – all use invisible airwaves to transmit bits of data through the air. Mobile phones work much the same way.

 

Wireless operators, such as MTN and Vodacom, cannot transmit wireless signals over the same frequencies in the same markets at the same time. This would be a little like KFC, Wimpy and McDonald’s serving takeaways via a single drive-thru’ window.

 

ICASA regulates the licensing and use of spectrum in SA in the mobile phone market and sells licenses to use the spectrum to mobile operators for huge fees.

 

ICASA also decides which frequencies of spectrum can be used for which purposes, within the international standards for spectrum usage agreed at the ITU (International Telecommunications Union). For mobile phones, it has allocated spectrum generally between 700 MHz and 2.6 GHz. Most of the spectrum in this range has already been allocated for use. This means that when a wireless company wants to add more spectrum to its service to boost its capacity, there isn't much more available spectrum that can be used and the companies have to re-farm existing facilities, but this is limited. Eventually the ceiling is reached.

 

And as more consumers buy smartphones and tablets, there is a greater need for spectrum. Much of the best spectrum for transmitting mobile signals has already been licensed to wireless carriers or it's being used by TV broadcasters or government agencies, hence government desire to control further allocation.

 

As a result, the industry says there is a spectrum shortage in urban areas. Any shortage in any industry leads to increasing prices and data is no different.

 

Spectrum allocation

-               Lack of spectrum is a direct result of government failure to allocate spectrum efficiently. This raises costs for network operators, which costs are passed-on to consumers. The White Paper proposes nationalisation of all spectrum and discretionary allocation instead of competitive allocation.

-               The government has not accepted responsibility, or even acknowledged, its role in the lack of available spectrum. Instead, it proposes to take back spectrum already allocated to MNOs and paid for by them.

-               Last year the Minister and industry regulator went to court. ICASA wanted to put the available spectrum up for competitive auction. The Minister sought to prevent it.  A decision is expected soon. ICASA recently announced that they will delay their auction.

 

And?

-               The WP will mean that the government gets to decide which companies get this valuable resource.

-               This is discretionary allocation – and an opportunity for yet more corruption and patronage?

-               Essentially, this is the nationalisation of spectrum in South Africa.

 

Expanded role of government

-               Government’s scope of oversight and its role are significantly expanded through the establishment of committees and the transfer of functions from statutory bodies to the DTPS.

-               All policy related functions are to be centralised within the DTPS.

-               There will be a range of new committees established.

-               The scope of government oversight and interference across the ICT sector will dramatically increase.

 

5.       Consultation

 

What has been industry reaction?

-               The move away from a competition-based market to one controlled by government via a monopolistic structure, which will threaten existing successful business models.

And

-               The intention to take back previously allocated spectrum from license holders who have paid out huge sums. See above on spectrum.

And

-               The lack of consultation – despite what the Minister says.

           

What about public and industry consultation?

The DTPS insists all proper consultation has taken place – but the industry says not, and that key policies were not included until the final White Paper.

 

The facts speak for themselves.

Publication dates of ICT Policy Public Documents

-               Publication 1:

o      24 January 2014, the National Integrated ICT Policy Green Paper

-               Publication 2:

o      14 November 2014 the ICT Policy Discussion Paper.

-               Publication 3:

o      20 March 2015 the Policy Review Report

 

Between 20 March 2015 and 3 October 2016 three critical policies were inserted into the final WP and had no public or industry consultation that insiders are aware of. But some say, as with all consultation, government can pick the bodies to suit its needs and which will deliver the desired result. Therefore, government is able to say all proper consultation has taken place.

 

1.             The move to implement WOAN: Wireless Open Access Network.

2.             Access must be offered at cost-based pricing.

3.             Taking back spectrum already allocated to operators who have invested heavily in this infrastructure.

 

-               Final publication 4:

o      Approved by Cabinet 28 September 2016 and published 3 October 2016.

 

Isn’t public consultation required by the Constitution?

The White Paper has several provisions, which were not raised in the Green Paper or the public participation process (above).

 

They may therefore not be in compliance with:

1.             The constitutional requirement that policies must be informed by public participation.

2.             All new policies must be preceded by a properly conducted socio-economic impact assessment (SEIA) (see above) in accordance with the strict requirements of the Presidency’s guidelines.

3.             The constitution requires a separation of powers. Elements of the White Paper might envisage an unconstitutional allocation of powers.

 

So – was this process “proper consultation”? No.

It may yet be decided in court which would tie up the industry in many years of litigation – not good for South African consumers of mobile Internet.

 

Industry reaction

The industry is still stunned and the MNOs are in a state of shock. MNOs have built their business models on the basis of owning the license to spectrum and freedom to compete. On this basis, they invest in enhancing and maintaining the network infrastructures and introducing new technologies.

 

Now – the government wants it back.

 

The Minister says the industry has generally welcomed the Policy – not so?

Publically, most in the industry welcomes the WP as at least a start to move the industry forward and out the current log jam that cannot continue. Beyond this, interests and reaction differ. But the Minister appears to be using this general welcome as a green light from the industry. This is disingenuous to say the least.

 

The industry is divided into those whose current business models are under threat from WOAN and the return of spectrum – the MNOs – and those who see opportunities to market their products and services on the back of existing infrastructure, specifically the WISPs – wireless internet service providers. This is a short term view – although they don’t seem to see it – if the MNOs stop investing in infrastructure then benefits will do dry up, as the network gets old and lack maintenance and development. Who will do this? Government? Not likely. No funds!

 

There is talk of major BEE players close to government who are eyeing up the spoils of a lucrative private sector and that this may be behind the move to WOAN.

 

Some quotes from industry figures – do these sound like a warm welcome?

-               Network providers, who provide nearly the entire population with network coverage, say they will not continue investing without relative freedom and security:

o          Vodacom’s Jannie van Zyl: “[Vodacom] would stop building base stations”.

o          MTN’s Mteto Nyati said they would have “to densify at the expense of existing and expanded services”.

o          Cell C’s Jose Dos Santos: “Consumers would be denied devices, products and services when launched globally”.

-               Adrian Schofield, Vice President IITPSA: “Like 25 years ago, government is trying to control, not facilitate, the communications sector.”

-               Democratic Alliance MP Marian Shinn deplored the policy as “monopolistic” and “unconstitutional”. It would not “bridge the digital divide or bring affordable, ubiquitous communications to South Africans.”

-               Dobek Pater, MD of Africa Analysis: “The policy hadn’t been “tested anywhere”, not even in Mexico and Rwanda as alleged by the minister.

-               Macquarie Group’s Richard Majoor: “Operators will invest only if “spectrum is treated as private property” warned.

-               Research ICT Africa: “The policy would ‘threaten investment and innovation’ and that spectrum should rather be ‘urgently released to operators.’”

-               Charley Lewis, a member of the ICT Policy Review Panel, called it a “far cry from what we recommended.”

There are many more.

 

What is a SEIA and why so critical?

Socio Economic Impact Assessments (SEIAs) deal with the costs versus the benefits of proposed legislation.

 

Since October 2015, a Cabinet resolution has been in place to the effect that all new laws and policies have to be preceded by a SEIA. A special unit has been created in the planning department to supervise and advise organs of state. SEIAs have to comply with Guidelines produced by the Presidency.

 

FMF executive director Leon Louw, one of South Africa’s leading experts on impact assessments and global best practice:

“SEIAs are not clearly a Constitutional requirement. However according to Section 33* all administrative action must be fair and reasonable. If this is applied to policy formation, it can be argued that there must be something amounting to a SEIA. It has been suggested in an informal counsel opinion that it would be unfair and unreasonable to adopt policies without proper consideration of costs and benefits, constitutionality, evidence and more”. 

 

More detail in Appendix 1.

 

6.       Industry bodies and new fund

 

What about ICASA and others?

All of the existing industry bodies are being replaced and / or taken over by other non-independent bodies and the DTPS. Current regulator ICASA’s independent role will absorbed into a new Economic Regulator under the DTPS and government via DTPS will perform other responsibilities. The recent and continuing spat and court case between ICASA and the Minister may be behind this move. Once implemented, ICASA won’t exist anymore and the spectrum allocation tussle will simple go away. It will be in government hands.

 

What about the new Fund?

The proposal is for a Digital Development Fund (DDF) managed by DTPS and funded by a much increased levy on all operators, not just licensed ones. (Currently a Universal Service and Access Fund (USAF) is managed by USAASA (Universal Service and Access Agency of SA), and funded by a levy on revenues of licensed operators.)

 

We know who will manage it – government. But who will fund it? Some analysts speculate that it will be network provider funds. Why would they provide funds if they are not beneficiaries? Maybe by charging high license fees? That would not defeat the stated objectives of the White Paper by driving up costs. SA’s economic realities are that the government will not be able to provide much funding from taxes.

 

Instead they should be encouraging private investors to provide all or most of the capital needed by opening rather than nationalising and monopolising entry and unleashing “market power”.

7.       Is competition lacking in the mobile industry?

There is a mistaken belief that the number of players in an industry determines the level of competitiveness. It doesn’t. In basic economic theory, it is the ease of entry that matters.

That competition exists, is evident by the multitude of different prices / bundles / pre-paid / contracts special offers on offer from many different suppliers. Some of these suppliers piggyback on the main MNOs e.g. Afrihost.

 

The economic case for market-based competition in ICT – and everything else

As a rule, the interests of consumers and the country are best served by what the renowned SA economist, William Hutt, called “consumer sovereignty”. Having studied under him, Raymond Ackerman (Pick ’n Pay) coined the slogan “the consumer is king/queen”. What consumers and a country generally benefit from most is consumer-driven (as opposed to regulator-driven) selection through a “spontaneous market order” of products, services to and providers. Consumers include intermediaries such as ISPs.

 

8.       So what’s good in the White Paper?

Not much.

-               The desire to move the industry forward and connect all citizens and include them into the digital society?
Yet, the policies may in fact hamper this laudable objective.

-               Network neutrality* perhaps?
Yet, in its pure form this will mean the surgeon performing to remote heart surgery would have the same priority as your Uber request.  The consensus is that there will have to be some form of prioritizing traffic, and, inevitably, this will be based on price.

-               Rapid deployment?
Now this is a good intention – if it happens.
Rapid Deployment Policy is intended to:

o      Provide open access to all infrastructure.

o      Accelerate competitive service expansion.

o      Lead to the creation of a centralized GIS database that will provide a database on all infrastructure in SA.

 

What are the “stated intentions” that are “good”?

Overall, the intentions are worthy, however some of the policies are counter-intuitive to meet the intentions.

 

For example – the Minister wants more competition – so he is proposing a government-controlled monopoly structure.

 

Intentions

1.             Inclusion: open the sector to allow more SMEs, black entrepreneurs and BBB companies to enter and operate in this lucrative market.

2.             Allow better, cheaper access for rural and under-served areas and the poorer in society.

3.             Bring in more competition.

4.             Better and more fair allocation of scarce spectrum.

5.             Achieve the 2030 SA Connect goals (none have been implemented so far).

 

9.       So what now?

Minister Cwele says the Policy is a “done deal” and will not allow any further discussion on the Policy only on implementation. Yet, a plan does not exist and he asked the industry to provide one – rather like asking turkeys to plan Christmas for the MNOs.

 

He intends to move very quickly on drafting a Bill to enact legislation.

 

The media has a significant role to play and needs to hold the Minister and the DTPS to account and ask the right questions – see list below.

 

Otherwise, consumers of mobile data, mobile access to the Internet, SA’s role in the Internet of Things, SA’s Internet success story and the roll out of the newest, fastest latest technologies are all under threat. The rest of the world will leave us behind.

 

10.     Key questions for the media

1.             Where is the SEIA – has one been done?

2.             Why is SA adopting a model that has no proven success stories and no case studies anywhere in the world?

3.             Why usurp a successful model that has delivered almost 99% quality coverage and universal access?

4.             The model does not follow international best practice, especially in spectrum allocation

5.             There are no successful case studies only fledgling pilots – where is Minster Cwele’s evidence?

6.             Why was there no consultation on the three critical policies between the Green Paper discussion report and the final White Paper?

7.             Who wrote the White Paper?

8.             When will there be clarity on new spectrum allocation?

9.             On what basis will spectrum be allocated?

10.         Who will monitor this and will the process be transparent?

11.         When will spectrum currently used by broadcasting be fully utilized?

12.         How will the government ensure the financial efficiency and accountability of the new Digital-DF, which previous precedents (USA, USAASA) struggled with? Will merely reporting to the DTPS be sufficient? Should there be Parliamentary oversight over the new fund? Who will ensure the fund is not used to gain political support by allocating funds to project sponsors who support the government?

13.         Independent ICASA responsibilities appear to be taken over by the DTPS – is this wise when DTPS has not delivered on a single goal for SA Connect?

14.         Existing ICT institutions, including the regulator, are weak and don’t talk to each other – capacity is lacking. Will the new ones be any better?

15.         How will the government ensure that there is no duplication of effort between the new institutions and failure to coordinate activities as has existed in the past?

16.         When will essential detail and clarity be provided on roles, responsibilities and functions of the new institutions?

17.         There is scope for duplication of functions may arise between the proposed Economic Regulator and the Competition Commission. Who will monitor this?

18.         Is 100% net neutrality a good idea? What about essential services e.g. medical services?

19.         Why has the Minister publically stated that, while this Policy is a done deal and all consultation will now focus on implementation yet he stated that the DTPS has no idea how to implement it and asked the industry for help and ideas?

20.         Could it be that the muted response from some parts of the industry to the WP is because it is 180 pages of complex and inaccessible language? They can’t understand it!

21.         Are vested interests driving this policy? Who are they?

22.         Are Cabinet egos at play here? Seems all ministers need a “big idea”.

23.         Was policy rushed out because no action taken on SA Connect or other targets? Four years in the making.

24.         Minister Cwele says the industry has welcomed the policy – is this accurate?

 

 

Appendix 1: Socio Economic Impact Assessment (SEIA)

 

There are two aspects:

1.             There is a Cabinet resolution to the effect that all new laws and policies have to be preceded by a SEIA. A special unit has been created in the planning department to supervise and advise organs of state. SEIAs have to comply with Guidelines produced by the Presidency.

2.             The Guidelines are good. However, there are various implementation problems, such as the fact that (a) SEIAs are not published, (b) there's no public participation in their production and (c) they are not done by an independent agency.

 

This interpretation of the section has not been testing in court. Section 33 of the Constitution reads as follows:

 

Just administrative action:

33.    (1)  Everyone has the right to administrative action that is lawful, reasonable and procedurally fair.

          (2)  Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons.

          (3)  National legislation must be enacted to give effect to these rights, and must -

(a)     provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal;

(b)     impose a duty on the state to give effect to the rights in subsections (1) and (2); and

(c)     promote an efficient administration.

 

South African SEIA history

-               1998: Good Law Project research starts under acting executive director Leon Louw

-               ±2000: DTI briefs Leon Louw

-               ±2002: Department of Finance takes over

-               ±2003: Presidency (Mbeki) takes over

-               2007: Presidency approves RIAs (‘implemented’ 2012)

-               2010: Labour law RIAs (Regulatory Impact Assessments) (dismissed!)

-               2015: Mandatory SEIAs announced

-               2016: Secretariat says all new measure have SEIAs

-               June 2015-Mar 2016: 117 SEIAs

-               SEIAs not published (as required)

 

Appendix 2: Glossary

DDF – Digital Development Fund

DTPS – Department of Telecommunications and Postal Services

ICASA – Independent Communications Authority of South Africa

ICT – Information and Communication Technologies

ISP – Internet Service Provider

IT – Information Technology

ITU – International Telecommunications Union (United Nations specialised agency for information and communication technologies)

MNO – Mobile Network Operator

USAASA – Universal Service and Access Agency of South Africa, a State Owned Entity of government established through the Electronic Communications Act to ensure that "every man, woman and child whether living in the remote areas of the Kalahari or in urban areas of Gauteng can be able to connect, speak, explore and study using ICTs

USAF – Universal Service and Access Fund (was established under the Electronic Communications Act (ECA) to fund projects and programmes that strive to achieve universal service and access to ICTs by all South Africans)

RIA – Regulatory Impact Assessment

SEIA – Socio Economic Impact Assessment

WOAN – Wireless Open Access Network

WP – White Paper

 

Ends

 

Media Enquiries: Jayne Boccaleone | 011 884 0270 | 082 904 3616 | jboccaleone@gmail.com   


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