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ECA Bill signals the end of post-apartheid SA’s greatest success story

“A contentious new Bill that heralds higher data prices and reduced quality of service for consumers of data of any kind on cell phone, tablets, laptops and more and will damage one of the few post-apartheid, private sector success stories, was slipped out on 17 November,” said Leon Louw, FMF executive director, at a media briefing today.

“Although a Socio Economic Impact Assessment (SEIA) seems to exist, it does not comply with the requirements laid down by the Presidency. A properly undertaken SEIA is essential,” he said.

The 115-page Electronic Communications Amendment (ECA) Bill has been given a 30-day period, until 17 December, in which interested parties may comment and make submissions. This pays lip service to the principle of public consultation while manipulating the pre-Christmas lack of media attention to achieve dubious ends. An “industry engagement” took place on 4 December but details are sketchy, the invitee list a mystery, and the DTPS media release afterwards said very little. No minutes are publically available from this or the previous engagement. Why?

The ECA Bill is one of several pieces of legislation required to effect the policy set out in the ICT White Paper published on 3 October 2016 to great opposition from a stunned telecommunications industry. Information and communications technologies (ICT) provide the framework and infrastructure for every aspect of mobile technological communications in society. 

The main contentious issues in the White Paper remain in the new Bill despite a 14-month period of Minister and industry engagement behind closed doors with a professional negotiator. Industry players believed a compromise had been reached. To their surprise, it had not.

Previously, MTN CEO Godfrey Motsa has said that the Bill does not address the “single biggest issue facing the industry – spectrum availability”. Experts say it introduces uncertainly about whether MNOs (mobile network operators) will keep their existing spectrum and most controversially, firmly places a Wireless Open Access Network (WOAN) centre stage of government ICT policy despite being unproven to work anywhere in the world, including, contrary to the Minister’s assertion, Rwanda. 

The key points of disagreement from the White Paper and that remain in the Bill are:

  1. The WOAN will be implemented – but actual details are vague. Currently the MNOs own their own networks. All new spectrum will be allocated to the WOAN once it is operational which means the “spectrum crunch” will continue. 
  2. MNOs will be required to return previously licensed spectrum to the WOAN. ICASA has 24 months after the Bill is passed in which to decide how and when this will happen. MNOs pay billions to license spectrum and make investment decisions based on availability. The Bill creates uncertainty.
  3. MNOs must provide “open access” to their networks at cost based pricing to other service providers and competitors. Currently the business model is one based on competitive services.

According to a report released in August 2017 by the GSMA (Global System Mobile Association – a global MNO trade body), South Africa’s proposed wholesale open access network is a bad idea. “Policymakers in countries considering a move to a wholesale open access network for 4G services may believe they can achieve greater network coverage compared with models that rely on network competition. However, (our) research published today demonstrates that this is not the case. We have found that network competition produces faster and more extensive network coverage.”

The GSMA continues, “We are concerned that a move to wholesale networks will harm consumers, as history has demonstrated that network monopolies normally result in high prices and lower investment in infrastructure.”

The duplicitous, behind the scenes negotiation by the Minister is an unfortunate lesson for the private sector to think twice before trusting government to negotiate crucial matters in good faith. This comes at the very time business and industry need to work together to fix the economy, growth and unemployment. 

Louw said, “IT is arguably the greatest leveller the world has known. It is hard to think of anything that has done more to reduce inequality – virtually everyone can now afford benefits that did not exist a few decades ago, and which, at first, were accessible only to the rich. The world is headed for “the internet of things” – virtually everything will to some extent be data-driven and connected. It is crucial for South Africa to get it right.” 

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