Convergence Bill complicating matters

Von Samantha Perry

The Convergence Bill is expected to be finalized by the end of August, following a final round of oral submissions on the bill, which are to be heard earlier that month.

Given that the bill was not preceded by green or white papers, and that government?s policy for communications is not clear, Amanda Armstrong, director: communications law, at Werksmans Attorneys, says the bill is difficult to assess, and that, given the complexity of the issues, and the far-reaching implications of the legislation, the timeframe for it is thus inadequate.

Speaking at a cocktail party held by the SA-Israel Chamber of Commerce recently, Armstrong outlined the bill?s aims, and implications.

"The Convergence Bill repeals the IBA Act and Telecommunications Act in their entirety, and part of the Broadcasting Act," she says. "It creates a completely new licensing framework, and gives Icasa greater powers in competition matters and greater flexibility in regulating the sector."

In future, she adds, the sector will be governed by the Icasa Act, the Convergence Bill, Broadcasting/SABC Act, Sentech Act, and ECT Act. "While this simplification is, in principle, a positive development," she says, "unfortunately the bill falls short on detail, and fails to address a number of issues currently covered in existing legislation. Further, the tabling and promulgation of the Icasa Amendment Act forms part of the Convergence Bill process, and it has not yet been tabled."

Licensing framework

"The Convergence Bill provides for the licensing and regulation of communications network services (including communications facilities), communications services, applications services, broadcasting services, use of frequency spectrum, and, possibly, content services," she continues. "It also provides for class licences, individual licences and exemptions from licensing."

While this seems an appropriate structure, the devil is in the details, Armstrong states. "The definitions laid out in the bill are critical to its interpretation and implementation, and many important definitions are too wide, and unclear. This makes it difficult to establish what services or activities require licensing, and the nature and extent of the regulation of these."

The content service issue is a case in point - the bill?s wording is such that it implies that anyone hosting content on a Web site needs to be licensed. Unless such issues are clarified, compliance will be difficult, and unnecessary litigation could result.

"Consensus seems to be that communications network services, communications services, broadcasting services and the use of frequency should require a licence," she says. "Communications facilities, application services and content services should not. It is suggested that the bill?s definitions be amended in line with this approach."

She further says that the framework as it stands is too rigid, and that the industry feels that Icasa should decide which categories of services within each key service require an individual or class licence, and which are exempt. "The bill should provide guidelines to Icasa," she notes.

Contentious issues around the licensing framework include whether or not it aims to provide for continued managed liberalisation or big bang liberalization of the sector, whether or not the minister should be involved in licensing, and transitional arrangements and conversion of existing licences.

"The roles of the minister and Icasa are not clear enough," Armstrong says. "And some of the provisions in the bill are incompatible with the requirements of the constitution. For example, Section 192 requires independent regulation of broadcasting, and, to the extent that the minister?s powers extend to broadcasting and broadcasting signal distribution services, these provisions in the bill are unlikely to withstand constitutional scrutiny."

Further concerns have been raised over the increased powers that the bill gives to the minister and Icasa, without providing procedural safeguards as to how these powers be exercised.

There is also a reduction in the public consultative process. "These concerns arise particularly around policies issued by the minister, regulations made by Icasa and the licensing process itself," she states.

The competition-related provisions of the bill are also contentious, she adds, because they are inconsistent with the Competition Act, and also create jurisdictional difficulties between the competition authorities and Icasa.

Conversion inadequately covered

Existing licences will need to be converted to fit in to the new licensing framework. The bill, however, is not clear on this conversion process, and only provides for a year, by the end of which all licences must be converted. It also does not guarantee that existing licensees will retain the rights they hold under the existing licences. Licensees also fear the imposition of further duties and obligations.

"The bill," Armstrong says, "omits to mention existing station licences and permits, existing agreements (facilities leasing or interconnect for example), existing approvals for telecommunications equipment, technical standards and current frequency plans."

Pending inquiries in terms of the IBA Act and Telecommunications Act, pending licence applications, existing disputes in terms of current legislation, pending enforcement proceedings and pending litigation have also been excluded.

"All in all, the introduction of convergence legislation is a positive development, for which the Department of Communications should be commended. However, many of the provisions of the bill raise significant concerns, which need to be addressed in order to provide certainty, and stability, and to encourage investment in the sector," she concludes.