22 June 2009

Broadcasting and Electronic communications practice area

Update on developments in May 2009

This update has been prepared by the Electronic Communications and Broadcasting practice area to inform clients of recent regulatory developments in the communications sector during May 2009. These developments include recent activities of the Independent Communications Authority of South Africa (ICASA).

Please feel free to contact any member of the practice area if any further information or advice is required.

General

• The Consumer Protection Act 68 of 2008 (CPA) was signed by the President on 24 April 2009. The majority of the provisions of the CPA will come into effect 18 months after this date (i.e. 24 October 2011), unless the effective date is extended for a further period as provided for in the Act. Unless ICASA applies for the communications sector to be exempted from the provisions or certain provisions of the CPA, the CPA will have significant implications for providers of electronic communications network services (ECNS), electronic communications services (ECS) and broadcasting services who make services available to individual and small end-users and subscribers (rather than larger incorporated entities). In particular, the CPA imposes requirements in relation to fixed-term agreements and provides that: such agreements may not exceed the maximum period prescribed by the Minister of Trade & Industry, notice must be given of the pending expiry of such agreements and, after expiry, such agreements may only be renewed on a month-to-month basis unless the consumer expressly agrees to the renewal of the agreement for a further fixed term.

• On 6 May 2009, ICASA published details of the application submitted by Broadband Infraco (Pty) Ltd for an individual ECNS licence, which is the licence required to operate a large-scale electronic communications network, and an individual ECS licence. The application was submitted by Broadband Infraco in response to an invitation to apply (ITA) which was published by ICASA on 13 March 2009. Broadband Infraco is a state-owned entity which was established in 2007 in terms of national legislation with the intention of expanding access to communications services to areas which are presently under-developed and under-serviced. The Department of Public Enterprises which drove the establishment of the company indicated that the intention behind its establishment was to construct a new fibre-optic network and to provide an alternative to Telkom SA Limited for network operators (being other ECNS licensees) in obtaining access to core networks on a wholesale basis. ICASA has indicated that it may elect to conduct public hearings on the application and that, if such hearings are held they will be conducted on 29 June 2009 (ICASA had previously indicated that hearings would be conducted on 20 May 2009.) Comments on the application must be submitted by interested parties by 19 June 2009. The application indicates that Broadband Infraco will focus on wholesale access and will not provide retail services to end-users and that it intends to construct a national long-distance fibre-optic network and participate in an international connectivity initiative (a submarine cable along the West coast of Africa) for this purpose.

Broadcasting

Hearings with regard to the draft regulations on advertising, infomercials and programme sponsorship published by ICASA on 13 February 2009 were held on 4 June 2009. ICASA had received 17 written submissions on the draft regulations from interested parties. Eight oral submissions were scheduled to be made at the public hearing. The draft regulations impose requirements with regard to issues such as product placement, competitions linked to programming and limits on the amount of advertising which may be transmitted in a particular period of time by the different types of broadcasting service licensees (public, commercial free-to-air, commercial subscription and community). An explanatory memorandum setting out the rationale for the changes from the previous regulations dealing with advertising and sponsorships was published on 3 April 2009.

Electronic communications

• ICASA published a notice on 6 May 2009 indicating that, as from 15 May 2009, ECS licensees offering mobile services were required to introduce MSISDNIess (Numberless) SIM starter packs for pre-paid mobile services. The licensees were also required to stop producing and distributing traditional SIM starter packs with numbers printed on them by the same date. These requirements were introduced by ICASA as conditions to the allocation of non-geographic numbering ranges in terms of the Numbering Plan Regulations, 2006 and are intended to promote the efficient use of numbers by operators and to eliminate the potential misuse of numbers in distribution channels such as retail stores. New pre-paid subscribers will now activate their SIM cards and will, at that stage, be assigned a number by the relevant service provider rather than purchasing a SIM card starter pack with a number already assigned.

• On 18 May 2009, ICASA published a media release with regard to the implementation of Geographic Number Portability (GMP) between Telkom and Neotel. The Number Portability Regulations, 2005 provide for geographic (fixed-line) and mobile number portability in terms of which requirements are imposed on mobile and fixed-line network operators to allow subscribers to port the numbers assigned to them and to use the same number when transferring service providers. The mobile number portability requirements in the Regulations were implemented in 2006. The functional specification for GMP was published by ICASA in July 2007. The Regulations provide for two phases of GMP: 1) number porting for subscribers who have been assigned more than ten different numbers within the same block of 1,000 or 10,000 contiguous numbers and 2) number porting for individual subscribers. ICASA’s media release indicates that the first of these two phases of GMP was to be implemented by 18 May 2009. This will primarily affect the corporate customers of the fixed-line operators, Telkom and Neotel, who have been assigned large blocks of numbers by those operators. In terms of the Regulations, in the first phase of GMP, number portability will only be available to subscribers who are identified by geographic numbers and are connected directly to the network of the donor operator and where no numbers within the same block are assigned to other subscribers, the network termination points remain within the geographic boundaries associated with the number block by ICASA and the numbers will be ported to another network operator who is subject to requirements in respect of number portability. In terms of the functional specification, numbers that are used for certain purposes such an internal network management and public pay-telephones are excluded from the GMP requirements. ICASA has not yet imposed GMP requirements in relation to other licensees to whom geographic numbers have been allocated.

• During April 2009, ICASA released a statement indicating that it did not require Vodacom (Pty) Ltd, which holds individual ECNS and ECS licences, to obtain ICASA’s approval in respect of changes to the shareholding of Vodacom’s holding company, Vodacom Group (Pty) Ltd, in terms of a transaction for the sale, by Telkom SA Ltd, of a 15% stake in Vodacom Group to Vodafone Group plc (which previously held 50% of Vodacom Group) and the unbundling of Telkom’s remaining 35% shareholding followed by the listing of Vodacom Group on the JSE Limited. On 6 May 2009, the Congress of Associated Trade Unions (COSATU) filed an application in the North Gauteng Court for the review and setting aside of ICASA’s decision that its approval in respect of the Vodacom transaction was not required. On 15 May 2009, ICASA released a further statement indicating that its earlier decision that its approval was not required in respect of the Vodacom transaction had been withdrawn by the Council of ICASA and that a public process would be followed by ICASA in respect of the transaction. COSATU and ICASA then brought an urgent application to interdict the listing of Vodacom Group, which was scheduled to occur on Monday, 18 May 2009. The High Court did not grant the urgent application for the interdict and the listing of Vodacom Group went ahead on 18 May 2009. ICASA issued a further statement on 22 May 2009 indicating that, in light of the judgment of the High Court denying its application for an interdict to stop the listing of Vodacom Group, it would not proceed with public hearings in relation to the transaction. The litigation with regard to ICASA’s initial decision that its prior approval in respect of the transaction was not required is still ongoing.

• Chapter XI of the Electronic Communications and Transactions Act 25 of 2002 (ECTA) provides for the liability of information system service providers to be limited for the transmission, caching and hosting of data and in respect of damages claimed for referring or linking users to a web page containing an infringing data message or infringing activity. This limitation of liability is only applicable to service providers who are members of an industry body which has been recognised by the Minister of Communications and who have adopted and implemented the official code of conduct of that representative body. The Minister published a notice in terms of ECTA on 22 May 2009, recognising the Internet Service Providers’ Association (ISPA) as such an industry representative body.

This update does not constitute legal advice and should not be relied on as such. Specific advice about your particular circumstances should be sought.

 
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