Neotel/Vodacom - ICASA holds hearings in a regulatory vacuum

Posted by LA Thornton on Thursday, December 18, 2014
ICASA has published a notice of hearings to be held in the proposed transaction between Neotel and Vodacom on 15-16 January 2015.  This notice follows a call for written comment on the proposed transaction in September 2014. 

It is not certain whether these hearings concern only the service licences of Neotel or both the service and spectrum licences, as neither notice mentions provisions of the EC Act concerning spectrum.

It is also not certain under what authority the proceedings are taking place.  Indeed, ICASA is in a regulatory vacuum when it comes to considering the proposed transaction, and runs the risk of having any decision it makes set aside by a court.  There is a solution, however. 

On 21 May 2014, amendments to the EC Act came into force.  Amongst others, new provisions were inserted into the EC Act to require prior approval before transferring control of licences (both service and spectrum licences).

Interestingly, prior to the day the amendments took effect, transfers of control in respect of service licences did not require the prior approval of ICASA.  Only a notification to ICASA was required in terms of ICASA regulations, if there was a change of ownership.

Unfortunately, ICASA has not amended its procedural regulations to account for the amendmentsto the EC Act.  The 2010 service licensing regulations and 2011 spectrum licensing regulations, do not deal with transfers of control because at the time the regulations were made, transfers of control did not require prior approval.

In conclusion, if ICASA proceeds to consider the proposed transaction in a regulatory vacuum, it runs the risk of having whatever decision it makes challenged and set aside on review.  It can solve this difficulty, however, by amending its procedural regulations.

Tags: "electronic communications act" licensing spectrum 
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