Electronic Communications Amendment Act, 2014

Posted by LA Thornton on Friday, July 11, 2014
On 7 April 2014, the President assented to the Electronic Communications Amendment Act, 2014 (EC Amendment Act).  It came into operation 21 May 2014.  A number of the amendments eliminate anomalies that existing in the previous version of the legislation. Those are not detailed here.  The more substantive changes include the following.
Individual service licences

Licensing

The following language is deleted from the individual service licensing provisions:  “In consideration of the implementation of the managed liberalisation policies”.  However, the substantive provision - that the Minister must first issue a policy direction before the Independent Communications Authority of South Africa (ICASA) may invite, accept and consider new individual electronic communications network services (ECNS) licences - remains.  The problem with this remaining provision (and sections 9(1) and (2)) is that the court's decision Altech Autopage Cellular (Pty) Ltd v the Chairperson of the Council of the Independent Communications Authority of South Africa and Others (Case No 20002/089, unreported judgment of 31 October 2008) (Altech judgment) made it somewhat meaningless.  The Altech judgment resulted in hundreds of individual licences being granted in the licence conversion process.  This effectively negates the effectiveness of the Minister limiting the number of new entrants.

The EC Act provisions regarding class licences were amended to specifically provide that more than one class licence may be awarded (which was not previously prohibited), however, a provision was also inserted indicating that the class licences awarded to one entity may not collectively assume the scope or coverage of an individual licence, which in the case of the ECNS licence is geographic in scope.  So, for example, an entity may not obtain ECNS class licences that would collectively encompass one entire province.

It is difficult to see how this provision applies to electronic communications services (ECS) licences, because what distinguishes an individual licence is that it can provide voice using numbers allocated by ICASA.  A class licence does not allow the licensee to get numbers directly from ICASA.  However, just in case there was not enough confusion already, the following additional category of class licences was inserted - “electronic communications services of district municipality or local municipal scope operated for commercial purposes”.  So, the question now is, if a licensee wants to provide ECS nationally, but not with numbers obtained from ICASA, what licence is required?  An individual licence (which appears might be the case now) or a class licence (which was definitely the case before the amendment).

New provisions were inserted to require prior approval before transferring control of a licence.  Previously, transfers of licences required prior approval, but transfers of control did not.

Rapid deployment of electronic communications facilities - rights of way

The amendments to section 21 place deadlines on the obligations of the Minister (to issue policy and policy directions) and ICASA (to make regulations).  The Minister’s deadline is twelve months, which is 21 May 2015.  ICASA’s deadline is 18 months or 21 November 2015.  The EC Act provisions provide wide ranging rights to all ECNS licensees, which has caused uncertainty in light of the many individual ECNS licences issued in the licence conversion process as a result of the Altech judgement.  Once the policy, policy directions and regulations have been made, the relative rights of licensees and land owners should be clarified and the processes for deploying infrastructure will be more fair and transparent.

Interconnection and facilities leasing

In sections 37(3) and 43(4), the criteria of financial feasibility in respect of interconnection and facilities leasing was replaced with that of economic feasibility. 

A procedure regarding the negotiation of agreements for essential facilities was inserted, requiring agreement within 20 days, after which ICASA must within 20 additional days, impose terms and conditions of an agreement.  However, the licensee from which essential facilities are requested can still argue that the provision of facilities is not technically or economically feasible.

Competition

Significantly, the provisions allowing ICASA to consider complaints of anti-competitive actions of licensees have been deleted.  This places that role squarely and solely to the Competition Commission.

The remaining amendments to section 67 attempt to clarify the provisions requiring ICASA to prescribe regulations regarding markets, market power and the imposition of pro-competitive licence terms and conditions - i.e., ex ante regulation.

National Broadband Council

New Section 72A requires the Minister (of Communications) to establish a National Broadband Council (NBC).
The Council will, primarily, advise the Minister on broadband policy and implementation and specifically, will -
  • coordinate broadband implementation by government
  • facilitate monitoring of broadband penetration and annually survey broadband penetration
  • develop a broadband implementation plan to support SA’s broadband policy
  • advise the Minister and Minister of Finance on government investment in electronic communications networks
  • recommend measures to increase usage of broadband
This appears to be the creation of a new bureaucracy with overlapping jurisdiction with Universal Service and Access Agency of South Africa (USAASA), ICASA and the Media Development and Diversity Agency (MDDA).  A more appropriate amendment might have been the consolidation of USAASA, the MDDA making it also responsible for the NBC functions.  The provisions could also make clear and distinct, the role of ICASA and indicate where the two organisations support each other.  ICASA regulates the industry.  The new USAASA/MDDA/NBC facilitates rollout of electronic communciations and broadcasting networks and services and the use thereof, both within and outside of government.

E-rate

The 50 percent discount afforded public schools in terms of the EC Act is extended to all public health establishments, independent schools, public and private colleges and private further education and training institutions. 

Universal Service and Access

Many amendments to the organisation and functioning of the USAASA were included in the EC Amendment Act, making it subject to the Public Finance Management Act, setting out fiduciary duties of the Board, inserting provisions for the appointment of a CEO and setting the USAASA under the control of the CEO.  Other provisions eliminate some anomalies in respect of defining universal service and access and in awarding subsidies.


Tags: 'electronic communications act' 'facilities leasing' 'competition' e-rate 'national broadband council'licensing icasa interconnection 'rights of way' 'universal service and access fund' 
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