Goodbye ICASA

South Africa will be saying goodbye to its independent communications regulator if the Icasa Amendment Bill goes through in its current form.

South Africa’s post, telecommunications and broadcast sectors are governed by an independent regulator – the Independent Communications Authority of South Africa (Icasa). Created out of the old South African Telecommunications Regulatory Authority (Satra) and the Independent Broadcasting Authority, Icasa came into being in 2000, per the Icasa Act.

Regulators exist to manage scarce resources (frequency spectrum in this case), to ensure that the interests of the public are served where commercial interests would otherwise dominate, and to ensure, in sectors where monopolies traditionally dominated (so-called natural monopoly sectors) that liberalisation happens, and that everyone plays fair while it’s happening, among other reasons.

Internationally, the trend towards regulating to control sectors has now reversed and deregulation is becoming the norm, with regulators like Ofcom in the UK taking an increasingly hands-off approach.
In South Africa, the regulator has been under-resourced, subject to capture by either political or commercial interests and overall ineffectual, since its creation.

The Icasa Amendment Bill, or as the Department of Communications prefers to call it, the ‘proposed’ Icasa Amendment Bill, was gazetted on 25 June. Respondents were given 30 days to comment on a Bill that has far-reaching implications for the broadcasting and telecommunications sectors. The department intends to take the bill to Parliament this year still.

Says Save our SABC (SOS) campaign coordinator Kate Skinner: “No one knew it existed for the first five days; Icasa didn’t advertise it. We picked it up from the Government Gazette via lawyers we know who scrutinise it. As such, we didn’t have 30 days to consider it, we didn’t have prior notice, we had no information on why the department was introducing it. Reading it, it became obvious the DOC is trying to deal with Icasa’s inefficiencies and slow turnaround times.”

Unfortunately, the DOC is trying to deal with this by putting more responsibility on the Minister and less on the Authority. Dominic Cull, Ellipsis Regulatory Solutions, fears the Icasa Amendment Bill threatens the regulator's independence. The bill amends the existing legislation to do the following things, Skinner says:

- change the position of CEO to chief operations officer (COO)
- clearly differentiate between the functions of the Council and the COO
- improve turnaround times
- establish a Tariff Advisory Council
- improve the functioning of the Complaints and Compliance Committee
- remove Icasa’s frequency spectrum management role
- enable the Minister to assign functions and roles to the chair and councillors
- enable the Minister to appoint members of the Complaints and Compliance Committee
- enable Icasa to continue working even when there are legal challenges on the table.

Some of the above amendments, at least two of which would be welcomed by the sector, are problematic for several reasons.

Undue interferenceFirst problem, says Skinner, is that changing the CEO into a COO will remove the accounting officer from the agency, in direct contravention of the Public Finance Management Act.
Second, by being able to assign roles and functions to the councillors and chairperson, the Minister would be able to directly interfere with, for example, licensing, and influence which licences are granted, or not.
“This is directly at odds with international standards and principles,” Skinner comments.

Says Dominic Cull, founder of Ellipsis Regulatory Solutions: “The amendment gives the Minister the right to assign fields of competency that each councillor oversees. I can’t see how that sits with the notion of independence on the part of the regulator. I appreciate that independence is a relative concept in this context, but in terms of South Africa’s World Trade Organisation obligations, we are obliged to have a regulator independent of government and this proposal infringes that. As far as broadcasting is concerned, it infringes on chapter nine of the Constitution (which says that national legislation must establish an independent broadcasting authority).”

Third, the amendment bill arbitrarily reduces turnaround times by half, so where the Act says 180 days, it would drop to 90 days; where it says 60 days, it changes to 30, and so on.
Says Cull: “We’re quite happy that they are looking at reducing the time periods but certainly not at the expense of the public consultation period. The amended clause says it wants to reduce unreasonably long consultation periods, which is lovely and would be great to achieve, but you can’t do that by reducing the consultation period from 60 days to 30. Some enquiries are by nature complicated and to give public and industry 30 days to research and comment is not acceptable.”

------------------------------------------------------------
The bill in its current form gives every appearance of seeking to undermine Icasa and gives every indication of a deteriorating relationship between Icasa and the DOC. Dominic Cull, Ellipsis Regulatory Solutions.
------------------------------------------------------------

Fourth, that the Minister evaluates councillors is inappropriate. The amended provision gives the Minister the power to chair the Evaluation Panel, says Skinner, which will be responsible for tenure and possible removal of councillors and the chairperson.

“This potentially directly undermines the independence of councillors and again raises the danger of political interference in the workings of the regulator,” Skinner notes.

Fifth, in order to remain independent, she says, Icasa must have the power to appoint the people it feels will best serve on the Complaints and Compliance Committee. Assigning this responsibility to the Minister will undermine that.

Sixth, enabling Icasa to continue working on something while it is subjected to legal challenges is problematic. “The amendment states that the authority must continue with function until a court order directs otherwise. I love the idea,” says Cull, “but I have no idea how it’s going to operate in real life.

“So Telkom, for example, will go and get an interdict that says Icasa cannot implement the call termination rate (CTR) regime when it is published. If Icasa continues in the face of that, it would open itself up to legal liabilities. Say it publishes a CTR regime that says mobile operators must reduce rates from 89c to 65c on 1 March 2011 and an operator challenges that in court, and Icasa carries on until a court decides otherwise. If the operator implements the new rates, it could lose millions in revenue. If the court finds in its favour, it will have lost that revenue needlessly. What does it do then – sue the regulator?”

As for the Tariff Advisory Council, he says: “In principle it’s not a bad idea but we need more information on how it will operate. I do not like the notion of a body sitting in Icasa that is appointed by the Minister and can act at his behest. I don’t see how that will help Icasa function effectively. It introduces a political  element and raises the independence argument. The same argument arises with amendments to the Complaints and Compliance Committee, which propose greater involvement of the Minister. Without further information, it is impossible to see how that will improve Icasa’s functioning.”

Lastly, amending Icasa’s function from managing spectrum to merely assigning it is in conflict with the
Electronic Communications Act.

Bolstering Icasa
What the regulator needs, Skinner and Cull agree, is money.
“An independent regulator requires sufficient financial resources to carry out its activities,” said the LINK Centre, Wits University’s ICT research and training arm, in its submission on the proposed amendments. “Icasa should not be subject to any form of financial pressure from the Minister or the DoC, which could be used to punish it for actions or decisions unpopular with the government of the day, or to apply indirect political pressure upon its mandate. And the regulator should further be required to account to the nation publicly and transparently. Icasa is already constrained in this respect, given that its funding comes through Parliament rather than from licence fees, and that both its budget and annual report require the involvement of the Minister, albeit they are approved by Parliament.”

“If we had a proper policy review process, we could look at it to ensure the regulator is funded properly so it can work in favour of users, not private organisations or government,” says Skinner, raising a common complaint – proposed legislation or amendments no longer go through the green and white paper consultation process, which means legislation that is fundamentally flawed gets to bill stage before this becomes apparent once public consultation starts.

“There’s clearly a problem with Icasa,” says Cull. “This is nothing new. Since the dawn of Satra in 1996, the regulator has suffered under capacity and finance constraints and has not been able to discharge its duty in a competent manner. It would be lovely if the bill took the view that we should bolster Icasa and allow it to discharge its current function. The bill in its current form gives every appearance of seeking to undermine Icasa and gives every indication of a deteriorating relationship between Icasa and the DoC.”

That the body at the DoC pushing this legislation forward is an ex-Icasa councillor has probably not helped matters.

-----------------------------------------------------------
...obvious [that] the DOC is trying to deal with Icasa's inefficiences and slow turnaround times. Kate Skinner, SOS.
-----------------------------------------------------------

Said body, Mamodupi Mohlala, director general of the DoC, was on leave pending redeployment at the time of writing, having been fired by the Minister and then reinstated. Should an alternative position not be found for her, she will be reinstated into the department in full. As Cull notes, while she’s been away, it seems as if people at the DoC have been attempting to distance themselves from the document. What these political shenanigans will mean for the bill going forward, however, remains to be seen.

The LINK Centre summed it up succinctly in its submission: “There are certainly problems with the legislation governing the broad ICT sector and with the effectiveness of the regulatory institutions governing the sector. But these cannot be resolved by the introduction of what appears to be a hastily conceived and poorly drafted ‘proposed’ bill, several aspects of which appear to be manifestly unconstitutional, and which deeply undermines the possibility of effective and independent regulation of the sector.

“The LINK Centre, therefore, calls upon the Department of Communications and the Minister to institute a formal, structured, consultative stakeholder process to debate and consider the most appropriate policy and legislative interventions to ensure effective, independent regulation of the ICT sector in the future.”

- ITWeb Brainstorm Cover Story