31 July 2007
Mr V Raomaano
Committee Secretary
Parliament of RSA
PO Box 15
Cape Town
8000
By e-mail:
Dear Sir
CELL C SUBMISSION ON THE BROADBAND INFRACO BILL 2007
Cell C would like to express its gratitude to the Parliamentary Committee for allowing it to supplement its submission of the 11th of June 2007. Cell C believes that it is pertinent that the Committee considers the broader implications of the introduction of Infraco in the telecommunications market.
Cell C believes that ensuring affordable availability and expanding access to broadband in underdeveloped areas is an important step towards bridging the digital divide. Cell C unreservedly supports these objectives and has, like most telecommunications operators, been an active party in their fulfilment. It is however important to ensure that in attending upon this goal all relevant factors are taken into consideration and that the correct procedures are followed as would ensure their achievement .
In this supplementary submission, Cell C will only make additional comments to the second publication of the Infraco Bill.
Please do not hesitate to contact the writer hereof, should you wish to discuss this submission in further detail.
Yours faithfully
______
Karabo Motlana
Executive Head: Regulatory Affairs
CELL C SUPPLEMENTARY SUBMISSION ON THE BROADBAND INFRACO BILL 2007
1. Introduction
Cell C maintains, as stated in its submission dated 11 June, that it is important to ensure an expansion of access to broadband in South Africa. It is however important that correct processes are followed. Cell C is still not sure what are the policy objectives which underpin the creation of Infraco. Cell C believes it would have been in a better position to make more informed comments if it had access to more detailed information. In this submission, Cell C limits its comments to matters not dealt with during its previous submission.
2. Objects and Powers of Infraco
In the creation of an extraordinary company such as Infraco, it is of utmost importance that the objectives of such company be clearly spelled out in the enabling legislation. Accordingly Cell C is concerned that the main objectives and powers of Infraco set out in section 4 of the Bill are both broad and vague. It is difficult to assess what “affordable broadband access” amounts to without an explanation of:
· What is meant by broadband?;
· What is meant by access? and lastly
· What is meant by affordable access?
In the absence of a policy document that would hopefully addresses both the enabling legislation and attendant licensing process, Cell C is not in a position to assess the policy assumptions which underpins Infraco’s stated objectives. It is important to know whether it is intended that Infraco provide wholesale services or both wholesale and retail services to the market and in this regard what would be the performance indicators that would define the provision of services and the achievement on its goals. Ideally the Infraco Bill should provide the necessary clarity, which would be supported by and refined in the company’s founding documents.
3. Infraco Licence
The Independent Communications Authority was created as a body that is to regulate the ICT industry in the public interest in an independent manner subject only to the Constitution and the law. In terms of the Electronic Communications Act, Act 36 of 2005 (“the ECA”), only ICASA may grant Electronic Communications Licences. Sections 5, 9 and 13 are of importance in considering the licensing framework.
The licensing framework has always mandated the involvement of ICASA whenever a licence issued in terms of the Telecommunications Act is transferred. The ECA which replaced the Telecommunications Act, specifically provides for the transfer of licences of the licence category held by Eskom and Transnet. Provision is made for the transfer of the private telecommunications licences held by Eskom and Transnet to be converted into appropriate ECA licences. The re-licensing framework and the attendant process have as yet not been finalised by the Authority. Accordingly Cell C finds it disturbing to note that section 6 provides that “with effect from the transfer date, Infraco must be regarded as having been granted an individual electronic communications network service licence”.
However, should in any event the licences held by Eskom and Transnet be regarded as individual communications network licence, Section 13 specifically provides that:
“(1) An individual licence may not be assigned, ceded or transferred to any other person without the prior written permission of the Authority.
(2) An application for permission to assign, cede or transfer an individual licence may be made to the Authority in the prescribed manner.
(3)The Authority may by regulation, set a limit on, or restrict, the ownership or control of an individual licence, in order to –
(a) promote the ownership and control of electronic communications services by historically disadvantaged groups; or
(b) promote competition in the ICT sector;
(4) The Authority by, subject to Chapter 9 by regulation, ….
(5) Regulations contemplated in subsection (3) and (4) must be made –
(a) with due regard to the objectives of this Act, the related legislation and where applicable, any other relevant legislation; and
(b) after the Authority has conducted an inquiry in terms of section 4B of the ICASA Act, which may include, but is not limited to, a market study.
There are currently no regulations in place as required in terms of section 13 of the Act that would permit the transfer of the separate licences held by Eskom and Transnet to any new entity. There is also unfortunately no indication of a commitment to adherence to ECA provisions in this regard.
Section 6(2) goes further to state that “The Minister of Communications must, after consultation with the Authority ….”. Cell C respectfully points out that the intention of the ECA is clearly that the Minister of Communications may not at any point in time interfere with ICASA in its licensing process. This is illustrated by subsection 2(3) of the ECA which provides that “No policy made by the Minister in terms of subsection (1) or policy direction issued by the Minister in terms of subsection (2) may be made or issued regarding the granting, amendment, transfer, renewal, suspension or revocation of a licence, except as permitted in terms of this Act.”
In light of the above, Cell C believes that the provisions contained in section 6 of the Infraco Bill requiring ICASA act as indicated, are ultra vires.
3. Conclusion
Cell C would like to use this opportunity to caution against the introduction of yet more state owned entities that would tend toward the disruption the operations of a market economy that the government has assiduously sought to promote. We would once again wish to re-iterate Cell C finds it difficult to comment fully on the issue in the absence of sufficient information. We would however we would like to thank the Committee for this opportunity to provide our further comments.
4