Media release: Scrap the telecoms bill and revert to existing Act

The adage “don’t fix what ain’t broken” is apt advice for drafters of the Electronic Communications Amendment (ECA) Bill. Industry consensus is that the current Electronic Communications (EC) Act, while not perfect, is adequate to drive the necessary progress required in the information and communication technologies (ICT) industry. ICT provides the framework and infrastructure for every aspect of mobile technological communications. It is the backbone of the economy and a chief driver of transformation. The affordability and quality of data services depends on getting this right.

The current Act has enabled much of the fast-paced development that has taken place since the 1990s. The Amendment Bill is a disaster, and law based on this will damage one of the few post-apartheid success stories. And, critically, the cabinet mandated socio-economic impact assessment (SEIA) is missing.

The Free Market Foundation (FMF) has reworked the Bill to remove most of the suspect clauses and proposed some small amendments to the current Act. The end result is that there is so little left of the Amendment Bill that the Department of Telecommunications and Postal Services (DTPS) should scrap it entirely and return to the existing policy under the existing Act, albeit with some tweaking. This will save the department time and resources and allow the market to get on with the job of driving competition. The FMF is willing to share its revised version with the (DTPS) at any time. Key points are summarised below.

The ECA Bill, based almost entirely on the controversial 2016 ICT White Paper, ignores industry input to the White Paper and is bad policy. It places government in control of a critical economic sector; will effectively nationalise a private industry; would create a government monopoly; will expropriate private property; removes the independence of industry regulator ICASA; introduces regulatory complexity and new government-controlled institutional bodies; lacks clarity and essential detail – which may make it unconstitutional; lacks a mandated SEIA; and opens the door to more corruption and patronage. The DTPS failed to consult properly on key proposals at every stage.

While we remain concerned with some aspects of the current ECA, such as the enabling of price control, compared to the proposed Amendment Bill, it is far superior.

The FMF recommends that the DTPS should:

1. Scrap the Wireless Open-Access Network (WOAN) model. It is untried, unproven, unworkable. SA will be a guinea pig.
2. Remove the attempt to centralise power in the hands of the minister. Where appropriate, give the authority to ICASA.
3. Scrap most of the state’s control over commercially-used spectrum and instead empower the minister to control the use of spectrum across government. Tweak similar provisions in the current Act.
4. Make spectrum freely tradable.
5. Remove the obligation of service providers to allow other service providers to access their infrastructure i.e. remove wholesale open access from the Amendment Bill and similar provisions in the current Act. It is already happening.
6. Replace the objective which seeks to regulate the sector in line with the White Paper, with “in the public interest”. This undermines the Rule of Law as the White Paper is not law but ministerial policy.
7. Replace the objective “to address barriers to market access in the sector” with “address the legislative and regulatory barriers to market entry”. The law should not be used to justify further interventions by government in the free market.
8. Remove the notion of promoting “service-based competition” and remove the provisions empowering government to regulate the “concentration and duplication” of infrastructure in urban areas. Infrastructure competition is a legitimate business practice that has enabled SA’s advanced network infrastructure.
9. Remove the objective of “redressing” market dominance and control – this is ambiguous and economically suspect.
10. Scrap clauses relating to competition in the Bill and the Act. The Competition Act is the law that regulates ICT competition. Overlapping laws are contrary to the Rule of Law.
11. Remove references to the BBBEE ICT Sector Code and to the National Radio Frequency Plan. Both are executive law-making and thus contrary to the spirit of the Rule of Law.
12. Remove the right of government and/or service providers to enter private property without the owner’s consent and limit it to public property only.
13. Remove the obligation of new property developments to provide facilities for electronic communications infrastructure. Leave this to market demand.
14. Remove the superfluous prohibition on refusing entry during “emergency situations”. Real emergencies are covered by the common law doctrine of necessity.
15. Scrap most of the SADC roaming requirements. Networks should provide users with adequate information regarding available services, costs and user permission required.
16. Scrap the requirement that end user charters can prescribe “standards of service … and other matters of concern … that end users and subscribers can expect”. This arbitrarily empowers regulators to prescribe ‘standards’ for virtually anything and is contrary to the Rule of Law.

Ends