Telecoms hampered as bill is withdrawn

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The Electronic Communications Amendment (ECA) Bill was created to implement some of the tenets of the national integrated information and communication technology policy published in 2016 through amendments to the existing Electronic Communications Act of 2005.

It would have introduced significant changes to the local telecommunications sector.

Despite a number of iterations to incorporate other stakeholder inputs, aspects of the bill remained challenged.

Furthermore, the parliamentary portfolio committee on telecommunications and postal services identified issues that needed to be addressed.

The bill would not have been passed by Parliament and signed into law before the May 8 elections.

This week, Communications Minister Stella Ndabeni-Abrahams withdrew the bill.

This came as a relief for some of the market stakeholders, but may be viewed with trepidation by others.

The bill’s general aim was to create a more competitive telecommunications services environment by enhancing competition at the wholesale and retail levels, expediting telecommunications infrastructure build-out and reducing infrastructure duplication, and transforming the sector through broad-based BEE.

This could translate into lower prices of retail services, and more and better quality services.

The bill proposed a number of changes, which would have a big effect on the telecommunications landscape:

. Establishment of new information and communication technology sector oversight committees at state level, which could reduce powers vested in independent chapter 9 institutions such as the Independent Communications Authority of SA (Icasa).

. Enforce infrastructure sharing and reduce duplication of infrastructure through an “open access” principle. This would lead to less expensive and faster network deployment.

. Allocate high-demand spectrum for 4G/LTE infrastructure deployment to the wireless open access network (WOAN) and remaining spectrum to private sector operators. This included recommendations for spectrum trading and sharing by operators.

. Establishment of a WOAN with allocated high-demand spectrum. This would be a wholesale operator.

The bill would not have satisfied all stakeholders as it seeks to introduce a range of market interventions that will create various forms of disruption.

Invariably, those entities being disrupted would have been unhappy and would have sought to dilute the negative impact on their businesses.

One of the more contentious proposals of the bill was the WOAN.

It would be available for use to all licensed service providers, making it possible for those that could not afford to build their own infrastructure to still offer the “new generation” of services.

The WOAN would charge all service providers the same “low” price to use its network. This would result in lower retail prices of services due to lower input costs and greater competition.

It would also offer users a greater choice of service providers.

However, the business model of the WOAN remains unclear and the few global examples cited – Mexico, Rwanda and Russia – are not similar in implementation, or they had unintended market consequences.

South Africa could have found itself on the bleeding edge of experimentation after spending a lot of money.

Conditions imposed on private sector operators, which want to acquire high-demand spectrum, remained onerous.

Many of the bill’s proposals are already enshrined in the existing ECA bill of 2005 with amendments.

Moreover, at least some of the bill’s objectives can be achieved through other means, which may be faster and less costly.

The withdrawal of the bill provides an opportunity to go through a proper consultative process and address the bill’s shortcomings.

This may lead to the revision of the policy itself before developing further legislation.

It also provides an opportunity to address convergence of the telecommunications and broadcasting sectors through a single bill, rather than through two different bills, which would be more reflective of the changing world.

This would allow for the structuring of a legislative and regulatory framework to build a more converged industry, with a stronger competitive environment to the benefit of users.

The withdrawal of this bill should not prevent Icasa from issuing regulations that can achieve some of the initiatives presented in the bill.

Nor should it delay the issuing of the much needed 4G spectrum to operators.

Pater is director of business development at Africa Analysis

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