Media release: National Integrated ICT Policy White Paper

19 January 2017
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The South African media and public need to pay close attention to the progress of the National Integrated Information and Communications Technology (ICT) Policy White Paper. If implemented in its current form, ICT policy may damage the success story of universal access and use of the Internet and ICT services since 1993. Critical investment will be deterred and innovation through competition will be stifled. Instead of looking forward to new and improved access and technological advancement, South Africa will fall behind its peers. 

Questions have been raised whether due process has been followed in the formulation and adoption of the White Paper. This has profound constitutional and rule of law significance and is of great concern to the Free Market Foundation.

Several proposals of particular importance appeared only in the final Policy White Paper to wide spread alarm and concern in the industry. The policy proposals remove the certainty, confidence and incentive for essential investment to happen.

Industry players and the public have had no opportunity to consider and make proper representation to government on the controversial additions to the final White Paper. This contravenes the constitutional requirement that all policies must be informed by public participation. In addition, all new policies and laws must be preceded by a properly conducted socio-economic impact assessment (SEIA) in accordance with the strict requirements of the Presidency’s guidelines. The ICT SEIA, if it exists, has yet to be made publically available. These checks are intended to prevent bad policy and bad law.

A key contentious policy is the introduction of a single wholesale wireless operator, a monopoly consortium, and the setting aside all high demand frequency spectrum bands into a wholesale wireless open access network (WOAN) for South Africa. Another is the return of existing license holders’ assigned high value spectrum. The regulator will be directed to determine the terms and conditions as well as the timeframe under which this will happen. Not only do these act as a disincentive for ICT industry development, but also amount to the expropriation of private assets.

The new cost based pricing directive provides no incentives for new investment and innovation. At a time when the deployment of modern converged services in South Africa is dependent on continued new capital investment, to introduce an open access directive at cost based pricing pretends that these investments have already been made. The inherent trade-off between cost based access regulation and investment incentives means the incentive for required capital investments no longer exists for operators.

The creation of a wholesale monopoly wireless provider is counterintuitive to the White Paper policy objective of stimulating innovation in the sector. The Policy has completely rejected the idea of infrastructure based competition between mobile operators, which created the mobile sector success story in South Africa and provided the extremely successful population coverage statistics – 99% coverage of 2G and 3G.

Before the final White Paper, these two critical proposals had not appeared. Previously the consultations talked of a new state owned National Broadband Network Company (NBNCo) to provide rural broadband connectivity but made no mention of the creation of a national wholesale wireless monopoly. The Minister’s assertion that there has been full public consultation and industry participation in the policy development process is disingenuous.

On 24 January 2014, the National Integrated ICT Policy Green Paper was published. The second publication came on 14 November 2014 with the ICT Policy Discussion Paper. The Policy Review Report followed this on 20 March 2015, then the fourth and final publication came with the White Paper on 3 October 2016 and was signed by Cabinet the following month.

The Free Market Foundation 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.

To these ends, FMF is responding to threats of mobile data price control and, more importantly, to the far-reaching implications of the White Paper. 

More state intervention is not advisable in an economy already reeling under the burden of excessive red tape, regulation and irregular government spending. 

Ends


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