ICT policy white paper – is it legally flawed?

January 27th, 2017, Published in Articles: EE Publishers, Articles: EngineerIT

 

Leon Louw, executive director of the Free Market Foundation: “The white paper is not heading South Africa in the direction the we believe our ICT policy should be going.”

The National Integrated ICT Policy white paper, besides many other negative issues, is legally flawed and does not meet the requirements of the Constitution of the country. This is the view of Leon Louw, executive director Free Market Foundation who, with Dobek Pater of Africa Analysis, presented a review of the white paper at the FMF’s first media briefing of the year held in Johannesburg  on 25 January 2017.

Louw said that there are aspects in the white paper that have been added after the publication of the green paper which were not subjected to public consultation. “In addition government did not meet its own requirements that a new policy should be subjected to social and economic impact studies which have not been done. It is interesting that government sets up a requirement and then proceeds without following it. There are other constitutional requirements such as the separation powers which seems to have been totally ignored in the new policy – which in December 2016 the Minister of Telecommunications and Postal Services said would go ahead. There is a world-wide phenomenon where ICT is headed to a more competitive market-based position and where the incentives are to stay at the cutting edge of new technology. The FMF would like to see our market to be competitive and the incentives positive.

“The white paper is not leading South Africa in the direction the FMF believes the country’s ICT policy should be going.”

In an earlier media statement the FMF said “A key contentious policy is the introduction of a single wholesale wireless operator, a monopoly consortium, and the setting aside all high demand frequency spectrum bands into a wholesale wireless open access network Tfor South Africa. Another is the return of existing licence holders’ assigned high value spectrum. The regulator will be directed to determine the terms and conditions as well as the timeframe under which this will happen. Not only do these act as a disincentive for ICT industry development, but also amount to the expropriation of private assets.”

Louw said that the new cost-based pricing directive provides no incentives for new investment and innovation. At a time when the deployment of modern converged services in South Africa is dependent on continued new capital investment, to introduce an open access directive at cost-based pricing pretends that these investments have already been made. “The inherent trade-off between cost based access regulation and investment incentives means the incentive for required capital investments no longer exists for operators.

“The creation of a wholesale monopoly wireless provider is counter-intuitive to the white paper policy objective of stimulating innovation in the sector. The policy has completely rejected the idea of infrastructure-based competition between mobile operators, which created the mobile sector success story in South Africa and provided the extremely successful population coverage statistics – 99% coverage of 2G and 3G”, he said.

Dobek Pater, Africa Analysis

Pater said that the policy’s text appears to advocate a complete net neutrality in its purest form. “If this is the case, it may present many problems such as competition based on service quality and differentiation in quality will be stifled. There will be no room for premium services (for people willing to pay for them) vs. best-effort services. The policy erroneously assumes that bandwidth is infinite. It is not. Bandwidth availability and quantum is ultimately linked to infrastructure investments made by the service providers (or third parties). Even in the EU, where the original premise was complete net neutrality, the regulation is now leaning towards allowing premium services to exist. A better option for SA would be to allow service differentiation, but enforce regulation preventing discrimination of traffic (blocking /throttling) purely from an unfair competition perspective. If the state wants to have a completely neutral internet access, why not use its state  owned enterprises (e.g Telkom) to create a state-owned alternative to private sector networks where all traffic will be treated equally without any prioritising, shaping, throttling, etc.”

The policy proposes that the government, through the responsible mnister, acts as the custodian of the national frequency spectrum on behalf of the people of South Africa. It will also perform the international policy functions of signing country treaties with the International Telecommunications Union (ITU). In this regard, working in tandem with other departments and public entities, it will be responsible for spectrum coordination with all role players that utilise the radio frequency spectrum for policy-making, planning and allocation functions to ensure alignment and coherence. The minister will also be responsible for the coordination of the review and updating the National Radio Frequency Plan, within a year of each ITU World Radio Conference.  The latter is a function that is currently performed by the Independent Communications Authority of South Africa (ICASA). Pater said it amounts to nationalisation of the spectrum. In effect, through controlling the spectrum policy, the government will control the future allocation and use of spectrum for the provision of telecoms services.

How it will all pan out is difficult to forecast. The court case to prevent ICASA from going ahead with spectrum auction – which in the view of many should be dismissed – is still coming up. Some internet service providers may see the White paper as a way to make some quick gains but ultimately we will all be the losers.

The industry needs to stand up to the ministry and the white paper. Should the policy as proposed be implemented we can expect some serious litigation which could carry on for several years. While the world moves ahead and enjoys the freedom of broadband, South Africans still only dream about it.

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