Tag Archive | Neotel

Broadband allocation on its way

Minister wants BEE ownership in broadband…..

sent to clients 20 March….As if nobody knew already, the Minister of Telecommunications and Postal Services,cwele Dr Siyabonga Cwele, told Parliament that broadband allocation is perhaps the biggest regulatory bottleneck in the South African deployment of wireless technologies.     He said, at the same time, he wants to see Black owned companies have their fair share of allocation.

However, both he or his department (DTPS) and the regulatory body ICASA seem to be at odds on the system needed to allocate the spectrum, particularly in the area of setting aside sufficient spectrum to support Black broadband development and ownership specifically.    The fight to deliver urgently more high-speed bandwidth to South Africans generally is being slowed down it seems by this difference in opinion expressed.

global broad bandPresumably, the delay is all about whose satellites we use – Chinese, Russians or the US accompanied by an intelligence risk – or do we go via the masts owned by the private sector. Minister Cwele probably suspects any such deal with the private sector will not serve black interests in the proper manner. Digging trenches and laying down optic line cannot be any kind of answer.  In telecommunications all is political, rather like the nuclear issue and the similar problems faced by department of energy – the political structure overlays the practical answer.

Dr Cwele has now said the final policy paper is on its way to Cabinet.

One on one

In an extraordinary meeting with the Portfolio Committee on Telecommunications and Postal Services, both parties explained their views with the views of MPs to be added to what has become a national debate dominated to an extent by Minister Cwele’s views.

The background to the impasse is that the Electronic Communications Act empowers the Minister to issue policy directives but ICASA does not necessarily have to accept such. To distill the views of each into a few words is difficult but clearly the driving principle behind Dr. Cwele’s approach is an allocation which favours black transformation in control of spectrum whereas ICASA prefers an allocation more on an “auction” basis, whereby bidders not only name their price but then add their additional contributions to Black upliftment and general social development.

cell phone mast graphicVodacom, MTN, Telkom, Cell C and Neotel have in the past sunk enormous sums into the development of communications structures but the current delays in allocation are, according to reports, hurting the industry but their BEE structures are shallow, say insiders.

Dedicated view

Industry sources said before the meeting “Minister Cwele is seized with the need to transform the sector to ensure meaningful Black participation but spectrum allocation cannot be granted in the same way as the granting of concessionary mining licences, for example, if Black empowerment is the goal.”

The principles of the allocation process as stated by DTPS are indeed noble, as quoted in the relevant draft Policy Paper before Parliament, which state that the aims of the allocation policy are to:

• Promote the effective and efficient management of spectrum to ensure
  agility, flexibility and adaptability in spectrum administration
• Reduce bureaucracy and streamline processes for spectrum assignment
• Support the attainment of the national broadband targets set out in the
  South Africa Connect programme at speeds and in the time frame outlined
• Provide clarity on the treatment of spectrum in instances where demand exceeds supply
• Set aside spectrum for use on an open access basis with joint private sector investment
• Support the provision of, emergency services, safety and security and sector-specific operations

Milder

In the parliamentary debate, Sipho Mjwara, Acting DG, DTPS, was more conciliatory and said the spectrum was a public resource belonging to all people and DTPS had to apply itself on how to deal with this for the benefit of all. Currently the spectrum was operating on a first come, first serve basis but this principle certainly did not benefit all. He said there were “barriers to entry for small companies and artificial monopolies helped little.”

This was followed by comment from the Deputy Minister, Prof Hlengiwe Mkhize, who said it was “more logical” not to shrink away from exercising the mandate of DTPS to follow the NDP on broadband roll out. “The pillars that need to be in place must include those that had previously been excluded”.

Money must talk

Pakamile Pongwana, CEO of ICASA, responded that from an international perspective it was no longer the policy,icasa ceo as had been the case in the past, of getting maximum fees into the fiscus but the needs of complete coverage of the country. It was a combination of coverage and fees, Pongwana said.

Germany had raised money from the spectrum divide, he said, but they had included a proviso that bandwidth would only be released when rural areas had been covered. He added that other countries were already looking at 5G networks while South Africa was still looking at LTE use. “We have to stop playing catch-up”, he said.

War of words

From the debate between all groups, DTPS, ICASA and parliamentarians, it became obvious that there is an ideological battle going on. The industry sees the independence of ICASA as regulator at stake, industry sources say. The Minister said he had looked at the idea of the allocation of “set asides” for high demand spectrum but added “the Department wants the whole pie to be available for all South Africans. We are in a situation where a duopoly owns 80% of the spectrum.”

However Pongwana concluded, “The allocation of spectrum was the country’s policy choice and the assignment would be by the Regulator and be in line with procedures. While there was long term licensee allocation there was short term spectrum allocation and the Department wanted to give certainty to licensees.”

Money, money, money

moneyOn the question of infrastructure spend, DDG for ICT Infrastructure in the DTPS, summarised government views in the meeting when he said that in a country like South Africa with infrastructure and access gaps, the question had to be asked whether the country wanted to raise money as its main goal. He said it was more about service and reaching all South Africans as part of the NDP but in an equitable manner.”

Whether it would be for free or go to the highest bidder were questions the DTPS was considering as it looked at all approaches. It would probably not be for free, he said, but there had to be a compromise where small companies are not at the mercy of big companies “because of market power relations.”

The Minister concluded that all in DTPS were listening to the views of the public and industry.

Ministerial clusters.

The next step before submission of the new Spectrum Policy to Cabinet during March was to consult with the particular clusters as part of the ICT Policy White Paper procedure. Once the Spectrum Policy had been approved by Cabinet and gazetted as part of the ICT White Paper, ICASA could proceed with the licensing process on the agreed basis.
Previous articles on category subject
Lack of skills hampering broadband rollout – ParlyReportSA
Overhaul of broadband policy underway – ParlyReportSA

Posted in BEE, Communications, Facebook and Twitter, Finance, economic, LinkedIn, Public utilities, Special Recent Posts, Trade & Industry0 Comments


This website is Archival

If you want your publications as they come from Parliament please contact ParlyReportSA directly. All information on this site is posted two weeks after client alert reports sent out.

Upcoming Articles

  1. MPRDA : Shale gas developers not satisfied
  2. Environmental Bill changes EIAs
  3. Border Mangement Bill grinds through Parliament

Earlier Editorials

Earlier Stories

  • Anti Corruption Unit overwhelmed

    Focus on top down elements of patronage  ….editorial….As Parliament went into short recess, the Anti-Corruption Unit, the combined team made up of SARS, Hawks, the National Prosecuting Authority and Justice Department, divulged […]

  • PIC comes under pressure to disclose

    Unlisted investments of PIC queried…. When asked for information on how the Public Investment Corporation (PIC) had invested its funds, Dr  Daniel Matjila, Chief Executive Officer, told parliamentarians that the most […]

  • International Arbitration Bill to replace BITs

    Arbitration Bill gets SA in line with UNCTRAL ….. The tabling of the International Arbitration Bill in Parliament will see ‘normalisation’ on a number of issues regarding arbitration between foreign companies […]

  • Parliament rattled by Sizani departure

    Closed ranks on Sizani resignation….. As South Africa struggles with the backlash of having had three finance ministers rotated in four days and news echoes around the parliamentary precinct that […]

  • Protected Disclosures Bill: employer to be involved

    New Protected Disclosures Bill ups protection…. sent to clients 21 January……The Portfolio Committee on Justice and Constitutional Affairs will shortly be debating the recently tabled Protected Disclosures Amendment Bill which proposes a duty […]