DRAFT of SACF Submission to Parliament on the Convergence Bill

The South African Communications Forum ("SACF") is primarily a representative of the historically disadvantaged South Africans practitioners in the Communications Information Technology and Broadcasting Industry. It is a truly mass organisation of all the stakeholders of the ICT sector. The mission of SACF is to promote active participation of historically disadvantaged individuals and organisations in the development of all sectors of the communication industry and to enhance economic development the African continent.

The SACF has transformed into an organisation broadly representative of all subsectors of the ICT industry due to the convergence of technology in the ICT sector. It will pursue relentlessly the following strategic objectives: -

      1. to lead organised ICT business from historically disadvantaged organisations in the endeavor to make the South African ICT sector inclusive, representative and to act as an agent for socio-economic transformation and development;
      2. to promote participation in enterprise development and create opportunities, with particular emphasis on small businesses and medium size business, in the ICT sector set-up by members from historically disadvantaged communities.

The SACF reviewed the Convergent Bill [B9-2005] ("the Bill") in the context of our organizational aims and objectives and offers the following comments.

  1. General

The SAFC believes that tThe need for a legislative framework in recognition and promotion of the on-going convergence currently shaping the ICT sector is apparent. To this end, the Generally, the SACF is in support of the Convergence Bill as we see the need to respond to the changes required in the existing legislative and regulatory frameworks in order to meet the new challenges poised by the convergence of technologies and services.

However we take note of the time given to have sight of and give comment on the Convergence Bill. Given that this new legislative framework will repeal and amend several key cornerstone Acts, namely the Broadcasting Act of 1999 as amended and Telecommunications Act, 1996 as amended ???? which governing different sectors of our industry , we strongly believe that then proper time should needs to be given to ensure that the Bill can be is thoroughly reviewed, understood and full commentary given. We do not think believe that the three weeks given for public comment is the time so far allowed has been adequate.

Additionally, we note that the drafting of this version of the Bill has not been informed by a policy framework. We submit that this may be problematic because the underlying policy issues are the fundamental building blocks on which the legislation should be built. does not have a detailed preamble that specifies the policy the bill is designed to implement.The lack of a policy framework we believe, may lead to confusion and uncertainties in the implementation of the Bill. For example, the Bill does not define "convergence". We believe that one of the difficulties of defining convergence may be a lack of a policy framework which sets out convergence principles from a South African perspective. We therefore believe that a policy framework should be defined and a definition of convergence included in the Bill. suggest that the Bill should include a definition of convergence itself. Recognising that convergence has been defined differently throughout the world and that other national legislative frameworks in promotion of convergence have unique objectives and perspectives, we feel this bill provides an opportunity to articulate the South African objectives and prospective on convergence.


2. Comments on Specific Sections of the Bill:

Chapter 1 Introductory Provisions, 2. Object of the Act, (p) [Page 11, line 27]

We would like to include as one of the an objectives outlined in s.2 of the Bill of the act the active development and promotion of cooperatives. The SACF strongly believes that cCommunity based cooperatives can be a new form of ownership of telecommunications services, especially in under serviced areas. The SACF feels that community based cooperatives should be considered for licenses in under serviced areas as a means to enable total community participation in and benefit from such licenses. Therefore we suggest the following amendment:

s.2 (p) develop and promote SMMEs and cooperatives:

We would also suggest that steps must be taken to ensure that the licensing process for cooperatives be made as straightforward and basic as possible. Therefore we would also suggest that cooperatives be eligible for class licensees.

Chapter 3 Licensing Framework, Licensing 5 (8) (b) [Page 14, line 29]

The SACF is committed to the principles of empowerment and to this end the SACF was the champion for including the provision into the Telecommunications Amendment Act that 30% of the shareholding in any major new license is held by historically disadvantaged groups. However we recognize that in the ensuing time the ICT Charter process has defined new targets black people as the key beneficiaries of government’s BEE strategies and plans. The SACF has been an active participant in the ICT Charter process and we therefore propose that future licenses in the broadcasting and telecommunications sector should be granted in line with the equity targets of the ICT Charter. for equity ownership by Historically disadvantaged groups and has fully participated in the Charter process. Therefore we propose that language be included which takes cognizance of the equity targets established by the ICT charter. We therefore propose the following amendments to the Bill:

s.5(8)(b) Promote the empowerment of historically disadvantaged groups, including women and youth, in accordance with the requirements of the ICT Charter.

We also suggest that ICASA adopt the ICT Charter as a Code of Good Practice.


Chapter 3 Licensing Framework, Licensing 5 (9) (a) [Page 14, line 32]

Given the rapid increase in technological advancement that continues apace, we feel that granting a license for 25 years is much too long a period of time. A 25-year license may act as a stranglehold on the pace of development in the industry. Also 25 years will see great changes in the social, cultural and historical landscape of South Africa. However we also recognize that there is a backlog of infrastructure investment required to meet challenges of bridging the digital divide and competing on a global scale. Such investment requires a longer period of licensingtime to enable adequate returns on investment and to justify the large capital requirements for infrastructure development. Therefore we would suggest that certain criteria to be applied when determining the length of each license, rather than a blanket 25 years licensing period.


One As a criterion to be applied is the level of investment required., T those licenses that require high levels of investment should be of greater length and all others to be of a shorter period. In application this would mean that class licenses and licenses for application services would be issued for a shorter period of time. Individual and communication services licenses wouldcan be considered for a longer period of time in relationship to the amount of investment required to implement the license.

Therefore we would suggest the following amendment:


(9) Individual licenses and licenses for communications services-

    1. are issued for a period of up to 25 years; and
    2. mMay be renewed in accordance with the terms set out in this Act.

(10) Class licenses and licenses for for applications services –

    1. are issued for a period of up to 10 years; and
    2. may be renewed in accordance with the terms set out in this Act.

Chapter 12 Universal Service Agency, Functions of the Agency [Page 40, line 25]


We are aware of a process currently underway to re-define the objectives and functions of the Universal Service Agency. The Bill must take this process into cogniszance this process and the functions of the Agency should be re-defined in accordance withly those outcomes.

Chapter 12 Universal Service Agency, Financing of Agency [Page 41, line 47]


We are also aware that the Agency has been hampered by the internal lack of capacity to fulfill its proposed functions and that funding has been a particular challenge. At present, the Agency cannot utilisze the Universal Service Fund to fund research, training, or institutional and capacity building in terms of the beneficiaries of the Fund. Without proper training and capacity building of the beneficiaries, some of the funded projects have not achieved their full potential or have not been properly maintainedable to be maintained. FApplications of funds must be applied to projects that are sustainable, and under the current restriction on theof use of funds means that this threshold is not being achieved by all projects.

As currently proposed in the Bill, the operating and capital costs of the Agency must be financed from money appropriated by Parliament. Rather, we propose that a percentage of funding by contribution made by licensees go directly to the Agency. The Agency should make a recommendation to the Minister of the formula for the apportionment of the use of funds, to include research, training and capacity building.

Chapter 12 Universal Service Agency, Application of Mmoney in Universal Service Fund [Page 42, line 47]

Therefore we propose that 80 (1) be amended as follows:

  1. for the assistance of needy persons towards the cost of the provision to, or the sustainable use by, them of communications services
  2. subject to subsection (2), to any communications network service licensee for the purpose of financing the construction , extension or sustainable use of communications networks in under serviced areas as prescribed;
  3. to public schools and public further education and training institutions as defined in the South African Schools Acts, 1996 (ACT No. 84 of 1996), and the Further Education and Training Act, 1998 (Act No 98 of 1998), respectively, for the procurement of and sustainable use of communications services and access to communications networks;
  4. for the establishment, operation and sustainable use of centers where access can be obtained to communications networks.

Chapter 12 Universal Service Agency, Contributions to Universal Service Fund [Page 43, line 8]

We think it is an anomalous result that licensed beneficiaries of the Universal Service Fund are also being expected to make contributions to the fund. However, we recognisze that after initially receiving subsidies, certain of these licensees might grow in revenue and profitability beyond the definition of an SMME and no longer require a subsidy.

Therefore we recommend that the following amendment be made:


81. (1) Every holder of a license granted or considered to have been granted in terms of Chapter 3, with the exception of present SMME beneficiaries of the Fund and cooperatives, must pay,

Companies should have the levies imposed only if they are making a profit. Those companies that are not making a profit of at least 5% of annual turnover should be exempt for the period during which they are unprofitable. The determination of their profitability should be made based on audited financial statements to be submitted with any exemption application.



The roles and functions of ICASA would necessarily change given the new framework set forth in the Convergence Bill and therefore a parallel process should be established to re-examine the power and functions of ICASA in line with the Bill. We strongly feel that as ICASA is going to regulate this Act then the functions and role of ICASA similarly needs to be examined in this process.

We note that this Convergence Bill will amend or appeal the Independent Broadcasting Authority Act, the Telecommunications Act and the Broadcasting Act as amended. Bill. However, The Act defining and regulating ICASA is not similarly being examined and amended in this process. We strongly feel that as ICASA is going to regulate this Act then the functions and role of ICASA similarly needs to be examined in this process.

I am not clear what this section 3 means.

Also,I think the point made was that the Bill makes reference to s.17H of the ICASA Act that currently does not exist in that Act. We are concerned that the Bill is referring to this section that the public has not had an opportunity to see and to comment on.