The Department of Communications (DoC) published the Electronic Communications Bill, 2011 for public comment on 4 November 2011.  The notice indicates that the DoC wishes to submit the Bill to Parliament during the course of the 2012 Legislative Programme. 

The Bill will amend the Electronic Communications Act 36 of 2005 (ECA), which presently regulates telecommunications and broadcasting in South Africa.  Comments on the Bill must be submitted to the DoC within 30 working days of the date on which the Bill was published.  As such, comments have to be submitted by 19 December 2011.  A copy of the Bill can be accessed here.

The Bill seeks to rectify some of the drafting errors in the current version of the ECA, such as grammatical and spelling mistakes, although it does not appear that all such issues have been addressed.

Some of the interesting features of the Bill are as follows:

General

• The Bill provides that the Independent Communications Authority of South Africa (ICASA) will have to act in accordance with any policy directions given by the Minister of Communications (the Minister).  At the moment, ICASA only has to consider such directions.  Arguably, this could undermine ICASA’s independence.

• The Bill includes a new definition of the term “historically disadvantaged person” (HDP).  This is a term that is used in the ECA at present but is not defined.  Where the term is used in the ECA it is indicated that the category of persons who are regarded as HDPs includes black people, women, the youth and disabled people.  The new definition includes any “person, category of persons or community disadvantaged by unfair discrimination before the Constitution took effect” and any person who is majority controlled by such persons.  It is not clear whether the intention is to align the provisions of the ECA with the requirements of the Broad-based Black Economic Empowerment Act 53 of 2003 which relate specifically to the empowerment of black people or whether the intention is that the category of persons who are regarded as HDPs for the purposes of the ECA should continue to be wider than black people alone.

• The ECA creates two broad categories of licences: individual licences and class licences.  Individual licences are generally required for the provision of services and the operation of electronic communications networks (ECNs) of relatively wider scale and scope.  The Bill includes new provisions in terms of which ICASA’s prior approval will be required for any transfer of “control” in an individual licensee.  At present, no definition of “control” has been included.  This requirement is similar to the requirements that were previously imposed in terms of regulations published under the Telecommunications Act 103 of 1996 (which was repealed by the ECA with effect from 19 July 2006) and in terms of certain licences issued under the Telecommunications Act.

• The Bill contemplates that the Minister will take over the functions of the planning and management of the radio frequency spectrum from ICASA and that ICASA’s sole function will be to license uses of the radio frequency spectrum.  The Bill also provides for the establishment of a new National Radio Frequency Management Committee to advise the Minister on radio frequency spectrum matters.

• Section 67 of the ECA presently sets out a particular process that ICASA has to follow when imposing pro-competitive conditions on licensees.  It has been argued that the process comprises various stages that each have to be followed in turn before ICASA can impose such conditions.  The Bill contemplates that this process will be changed.  In terms of the Bill, ICASA can publish regulations that identify relevant markets or market segments, determine that there is ineffective competition in those markets or market segments, determine that particular licensees have significant market power (SMP) in the markets or market segments and impose pro-competitive licence conditions on licensees who are determined to have SMP.  The Bill also contemplates that the list of pro-competitive conditions (which is not a closed list) which may be imposed on licensees be amended to specifically provide that an obligation to maintain structural separation may be imposed on a licensee. 

Telecommunications

• The Bill provides that an individual electronic communications service (ECS) licence will be required to provide any ECS of provincial or national scope.  This presumably means that an individual ECS licence will be required to provide ECS either nationally or in a particular province.  (In terms of the ECA, ECS are any services provided to end–users over an electronic communications network (ECN) such as voice, data and internet services.  Electronic communications network services (ECNS), on the other hand, are the operation and “mak[ing] available” of an ECN.)  At present, an individual ECS licence is only required where a licensee wants to provide voice telephony services using numbers from the national numbering plan.  All other ECS, including acting as an internet service provider, only require a class ECS licence. Unlike an individual licence, a class ECS licence is relatively easy to obtain by simply submitting a registration notice to ICASA.  Individual licences are difficult to obtain at present because a person can only apply for such a licence in response to an invitation issued by ICASA.  As such, ICASA first has to issue an invitation to apply (ITA) before a person can submit an application for an individual licence to provide any services or networks for which an individual licence is required.  The Bill contemplates, however, that applications for individual licences can be made to ICASA in the prescribed manner rather than only on invitation.  This is subject to the proviso that an application for an individual broadcasting service licence (required to provide a commercial or public broadcasting service) can only be made pursuant to an invitation issued by ICASA.  However, this does not mean that ICASA could not make regulations prescribing that applications for individual licences can only be submitted pursuant to an ITA.  The Bill also does not indicate that section 5(6) of the ECA will be deleted.  This section provides that, pursuant to the Government’s policy of managed liberalisation in the telecommunications and broadcasting sectors, ICASA can only accept applications for individual ECNS licences in terms of a policy direction issued by the Minister.  If the intention is that interested persons will be able to apply to ICASA for individual licences at any time in the same way that they are presently able to register for class licences, it would be preferable if this was specified clearly. 

• If persons who previously only required a class ECS licence will, after the enactment of the Bill, require an individual ECS licence in order to provide the same services, it will be problematic if it is not easy for such licensees to obtain individual licences.  The Bill also does not provide for any transitional provisions to take account of situations like this.

• The Bill provides that a person may only hold two class licences at the same time.  At present, no such limit is imposed either by the ECA or by regulation.

• At present, the ECA provides that a person may register for a class licence at any time by submitting a registration notice to ICASA.  The Bill provides that a registration for a class licence will have to be submitted in the manner prescribed by ICASA and deletes the words providing that such a registration may be submitted “at any time”.

• The Bill contemplates that the period within which ICASA has to issue a class licence should be reduced from 60 days to 10 days.

• The Bill provides that persons who are exempted from the licensing requirements imposed by the ECA (i.e. persons who are not required to obtain ECS or ECNS licences) will have to be either citizens of South Africa or, in the case of legal persons, registered in South Africa.  This is not presently the case.  Resellers of ECS are one of the categories of service providers which have been exempted by ICASA from the requirement to obtain an ECS licence.  As such, a foreign company may act as a reseller without the need to register a local subsidiary.  On the other hand, at present, where the nature of the services to be provided by a foreign company means that the foreign company does require a licence, the foreign company has to incorporate a local subsidiary because only South African citizens and local companies are permitted to hold licences.  The Bill does not provide for any transitional provisions in relation to how such persons will be dealt with.

• The ECA presently provides, in Chapter 4, that all ECNS licensees (including both individual and class licensees) have certain preferential rights of way when rolling-out the electronic communications infrastructure that makes up an ECN.  The Bill contemplates that these provisions be amended so that only specific ECNS licensees, as specified by ICASA, will have the rights described in Chapter 4.  In addition, the Bill provides that ICASA must make regulations dealing with how ECNS licensees are obliged to exercise their rights in this regard.

• The Bill contemplates the creation of a Broadband Inter-Governmental Implementation Committee to advise the Minister on broadband policy and implementation and, in particular, to develop a plan to implement the Minister’s Broadband Policy for South Africa.

Broadcasting

• The Bill does not include any proposed amendments to the sections of the ECA dealing with the ownership and control of broadcasting services.  The Findings Document on Ownership and Control that was recently published by ICASA contemplated that certain amendments to the relevant provisions of the ECA would be recommended to the Minister.  It is not clear whether the intention is to amend these provisions of the ECA at a later stage, if at all.

• The Bill contemplates that a community broadcasting service will serve a “particular geographically defined community”.  This amendment appears to be aimed at clarifying that all community broadcasting services must serve a particular community in a particular geographic area.  In the past, applicants for community broadcasting service licences have argued that services targeting so-called “communities of interest” (being communities with a particular, ascertainable common interest such as religion or membership of an educational institution) could be national or provincial services because the members of the community are not necessarily limited to a particular geographic region.  The Bill also contemplates, however, that the definition of “community” should be amended to include only communities of interest and not “geographically founded” communities.  This makes it unclear whether community radio or television stations that cater for a particular group of people simply on the basis that they reside in a particular area will continue to be permissible.

• At present, the ECA provides that broadcasting service licensees have to comply with the Code of Advertising Practice published by the Advertising Standards Authority of South Africa (ASA).  The Bill provides that broadcasting service licensees will also have to comply with any advertising regulations prescribed by ICASA in respect of the scheduling of advertisements, infomercials and programme sponsorships.  ICASA’s Complaints and Compliance Committee (CCC) rather than the ASA will be responsible for adjudicating breaches of the advertising regulations, even where the broadcasting service licensee is a member of the ASA.  The Bill also contemplates that, where the ASA makes a finding in relation to a complaint brought against a broadcasting service licensee, the ASA will have to forward a copy of its finding to the CCC, which will then have to make a recommendation to ICASA’s Council regarding any action to be taken against the licensee. 

• The Bill provides that any “common carrier” (the definition of which has been specifically amended to include Sentech) will have to submit its tariffs to ICASA on an annual basis for approval.

Please contact any member of the TMT practice area for further advice on the Bill.