FXI's response to the Convergence Bill

The Freedom of Expression Institute has had the opportunity to study the Convergence Bill that is currently before the Parliamentary Portfolio Committee on Communications. The FXI will be making a presentation in front of the Committee tomorrow, on Friday, the 12^th August 2005. The following statement contains some of the points that we will be making to the committee and beyond.

The FXI is deeply disturbed by the inadequate nature of the process that led up to the formation of the Bill, which was Gazetted on the 16^th February 2005. The closing date for submissions to the Portfolio Committee was the 15^th April 2005. This meant that the public was given only two months to comment on a Bill whose nature is very complex and whose consequences are far-reaching.

Over and above this problem, and more importantly, there was no Green and/or White Paper process before the Bill was produced. A Green and/or White Paper would have outlined the policy assumptions that underlie the Convergence Bill.

It is our considered view that largely, the objective conditions for convergence do not exist in the country except all but the wealthiest users of communications services. Broadcast and telecommunications rollout to the poorest sections of the populations leaves a lot to be desired. There are still whole villages and townships in the country where there is no single fixed telephone line. In some cases, and in some areas, all the telephone lines installed under the mandate given to Telkom have been disconnected as a result of non-payment because people could simply not afford the costs. Cellphones have penetrated barely half of the population, and poor consumers are being made to bear excessively high pre-paid costs. Given the fact that an affordable protocol has yet to be developed for accessing data through cellphones, fixed line rollout remains key to addressing the digital divide. There are also still areas where broadcast services are not reaching people. In short, universal access, let alone universal service, is still a dream for the majority in the country. Unless the basics are addressed through this process, the Bill risks dividing the country into information haves and information have-nots, with the gap between the former and the latter becoming even more difficult to address. In short, the Bill risks replacing the analogue divide with the digital divide.

The FXI has therefore embarked on a process of consulting with users in underserved areas and communities to ensure that they have a say in the Convergence Bill process, and seeks to encourage the formation of user groups in these communities, that will be represented in key decision-making forums. Only once the voice of underserved and underserved users is heard, will this voice be taken seriously.

The objects of the Bill

The Bill fails to present the country with a continuation of a transformation agenda. In fact, a dangerous assumption emerges in the Bill, which seems to suggest that the communications sector is transformed and therefore transformation goals do not need to be set. The Bill ignores important objectives of the Broadcasting Act, which sets out clear goals for the broadcasting sector. Any Bill that sets out to converge the communications sector should have elaborate and clear transformative goals that are binding to the sector and that also ensure that the sector as a whole is tied down to a set of goals that ensure that it delivers to the poorest sections of the community. To this end, we will propose that, amongst others, the following should form part of any envisaged legislation:

• Communications services should be targetted for underserviced and unserved areas

• The communications sector should be focused on redress, and there should be a clear bias towards serving poorer sections of the community (this should not be confused with the dangerous and often misused ‘historically disadvantaged persons’ which might as well mean the black middle class – BEE)

• Affordable access is a key priority

• The completion of the roll out of the underlying networks on which convergence should be built should be prioritized

• Roll-out of services to points of service that target the poor, such as schools, clinics, welfare offices and others, should be prioritised.
  

Policy and regulation

There are number of disturbing clauses in the Bill that threaten the independence of the communications regulator, the Independent Communications Authority of South Africa (Icasa). For instance, the Bill states that in issuing policy policy directives the minister of communications the MAY consult with Icasa. Instead, at all times the minister MUST consult with Icasa with regards to policy directives.  Also, policy directives should be put through a parliamentary hearing, with at least 30 days for comment. The qualifications in the Broadcasting Act around policy directives not applying to licencing and programming have been removed, and need to be reintroduced. The clause ensuring that policy directives do not interfere with the independence of Icasa also need to be reinserted.

However, we must also note that the Convergence Bill is an advance on the Telecommunications Act with respect to the independence of Icasa and evens out the situations between the telecomms sector where the Minister had the final say over regulations and the broadcasting sector where Icasa had the final say.

Licencing framework

With respect to the licencing framework, there are no underlying principles spelt out for what some licences are individual licences and other licences are class licences. This should be spelt out in the schedule of the Act. Another disturbing provision gives the final say over infrastructure licences, which entrenches the conflict of interest that has existed for some time where the Minister is both a player and referee. In addition, the Minister should not be involved in the development of guidelines for the rapid deployment of communications facilities: a role that should be left up to Icasa.

In addition, Icasa should not be in a position to set additional terms and conditions for class licences. They are by their very nature generic and should have standard sets of terms and conditions. All licences should universality obligations imposed on them, whether they have significant market power or not. This is because all operators have the potential to contribute, and the combined effect of their contribution could be significant whether or not they have significant market power.

Possibly the most disturbing provision involves the Minister approving all individual licences. This will mean all broadcasting licences  - which must be treated as individual licences - must be approved by the Minister, which strips Icasa of the powers to grant these licences independently. This clause is dangerous as it threatens to erode the hard won independence of the whole broadcasting sector, and will make a mockery of the constitutionally guaranteed independence of Icasa.

It should also be noted that the Bill makes reference to class licences being granted by Icasa. Class licences do not involve an application and approval process, but may involve a process of registering with Icasa.

Radio frequency spectrum

The FXI does not support the provision in  the Bill that requires spectrum licencees to co-ordinate their respective frequency usage themselves, as it may ensure the necessary oversight into fair usage is missing. Rather, Icasa should play this role. Also, the FXI does not believe that the Minister should not play a role in approving the radio frequency plan. Again this entrenches the player/ referee problem, where the Minister may tilt the playing field in favour of 'her' portfolio organizations to enhance profitability. Icasa alone should develop and approve the plan.

Interconnection

With respect to interconnection, the access regime in the Bill is very telecommunications specific, dealing with matters such as interconnection and facilities leasing. There should also be some emphasis on broadcasting access issues, especially around regulating access to conditional access systems and multiplex services for digital television. There is also no section around the role of Sentech as the common carrier, which should be inserted. There should be a provision obliging Icasa to develop an access list of facilities and services that are subject to the access regime, and access agreements MUST be registered with Icasa to improve transparency around this area. There is a great deal of suspicion that Telkom and the cellphone operators are making super-profits at the expense of poor users (especially pre-paid users), so the Convergence Bill must seek to ensure maximum transparency with respect to interconnection and access. In addition, even non-dominant players, not just those with significant market power, should be obliged to interconnect.

Consumer issues

The chapter on consumer issues is especially important to the FXI, as it is this section that should guarantee the rights of users. As it stands, it is grossly inadequate for this purpose. We must state for the record that are opposed to the argument made by the Second National Operator to the Portfolio Committee that consumer issues should be left to self-regulation or co-regulation; such an approach may exacerbate a situation where the raw deal that consumers have experienced on many occasions with respect to access, quality, safety and information, will not only continue, it will get worse.

The Chapter needs a clause forming a consumer forum, which was included in the previous version of the Bill; the Forum should , however, be permanent, not ad-hoc. The customer services charter as envisaged by the Bill must be made to address the issues listed in the Bill, and the provisions of the Charter must become enforceable, which can be done by making adherence to the charter a licence condition.

In addition, Icasa should be required by law to conscientise the public about its role, the existence of the code, what consumers can do to access Icasa in the event of a violation, and it also needs to publish a regular review of the code. There is also no provision for public participation in the development of the code, and an obligation should be placed on licencees to inform all customers about the existence of the code, and the mechanisms of redress in the event of code violations.

Universal Service Agency ( USA )

It is crucially important that we take the opportunity of the Convergence Bill process to upgrade the independence of the USA , which has been largely under the control of the Ministry of Communications. The recent history of the USA has underscored the fact that it needs to become more independent of government, and also needs to play far more of a watchdog role with respect to the achievement of universality. Its powers to advocate for particular positions need to be beefed up, otherwise it will remain a mere implementing body under the thumb of the Minister, with no ability to stand up and critique the state of universality in the country.

The FXI finds it entirely unacceptable that the USA still continues to function without national definitions of universal access, universal service and needy people in place: core concepts in the measurement of universality. It has attemped to attain these (undefined) objectives using entirely inappropriate methods and models imposed not only by the Ministry, but by multilateral institutions like the International Telecommunications Union (ITU). As a result, money has been squandered, and the fixed line network has shrunk. The core objective of the government policy of managed liberalisation - namely to achieve universal service - has failed, and the USA has not had sufficient clout to address this failure. This situation needs to change with the Convergence Bill.

In terms of the Bill, the Minister should not appoint the USA 's Board; rather the Board should be through a public process like the Board of the Media Development and Diversity Agency. Recommendations about finalizing he outstanding definitions should be made to Icasa, and not the Minister, and a deadline should be set for the completion of these definitions. In addition, the USA 's head should be appointed by the Board, not by the Minister. The Bill should also contain a clause requiring public involvement in determining how the monies of the Universal Service Fund (USF) are spent. In addition, contributions to the USF should be determined by Icasa, and not the Minister, as the Minister may be tempted to make decisions that favour the profitability of Telkom. The FXI also notes that we support the call made by the USA in the past week to increase the network operators' contributions to the USF.