THE CONVERGENCE BILL (Combination / Merger of all ICT Acts)

1. THE CONVERGENCE BILL(Combination / Merger of all ICT Acts) Presentation to PC on Communications Parliament in Cape Town 2 June 2005 Nhlanhla Jethro Tshabalala 082 783 2104

2. PURPOSE OF MY PRESENTATION • INTRODUCE MYSELF AND DEMOSTRATE TO THE PANEL MY ICT UNDERSTANDING AND COMPETENCIES • DEMOSTRATE MY THINKING AND POSITION ON WAYFORWARD FOR ICT SECTOR. • CONVINCE THE PANEL TO APPOINT ME TO LEAD ICASA WITH CONFIDENCE. Prepared by NJ Tshabalala

3. OVERVIEW • Process followed • Objectives of Convergence Bill • Summary of Chapters • Convergence Mapping • Licensing • Transitional Provisions • Other provisions • Observations • Conclusions Prepared by NJ Tshabalala

4. PROCESS FOLLOWED • Draft 1 for comment on 25 July 2003 • Industry wants a single piece of legislation that would replace existing statutes, it seems the Ministry wants to amend underlying legislation only. • Bill gazetted on 16 February 2005 • Repeals IBA and Telecom’s Acts • Bill could be enacted in 2005 Prepared by NJ Tshabalala

5. OBJECTIVES OF THE BILL • to promote convergence in the broadcasting, broadcasting signal distribution and telecom’s sectors and to provide the legal framework for convergence of these sectors • to make new provision for the regulation of communications and network services • to provide for the granting of new licences and for new social obligations • to provide for the control of the radio frequency spectrum • to provide for the continued existence of the USA, and • to provide for matters incidental thereto Prepared by NJ Tshabalala

6. CHAPTERS 1: explains primary objectives of Bill, incl promotion of convergence, encouragement of innovation in the comm’s sector and promotion of competition 2: delineation of powers between Minister and ICASA whereby the Minister formulates policy and ICASA implements policy, issues licenses and oversees the comm’s sector through regulation 3: creates legal framework for issuing licenses and the attendant rights and obligations of licensees Prepared by NJ Tshabalala

7. CHAPTERS cont… 4: defines rights and obligations of comm’s network services licensees when entering upon public and private property 5: vests Minister with authority to manage the radio frequency spectrum used by security services and ICASA with authority to manage other spectrum 6: governs approval and use of comm’s equipment and facilities and radio apparatus in the Republic 7: requires comm’s network service licensees to ICX their networks and defines guiding principles that will govern licensees’ interconnection agreements Prepared by NJ Tshabalala

8. CHAPTERS Cont… 8: requires comm’s network service licensees to lease network facilities to other licensees and defines principles that will govern leasing agreements 9: establishes legal framework allowing broadcasting services to participate in convergence of comm’s and broadcasting services while retaining critical policies 10: directs ICASA to prescribe regulations to protect consumers, including consumer code of conduct Prepared by NJ Tshabalala

9. CHAPTERS Cont… 11: (a) provides for establishment of an ICT for government initiatives. (b) designates ICASA as ‘‘regulatory authority’’ iro the comm’s sector under the Competition Act (c) empowers ICASA to take certain actions to ensure fair competition in the sector (d) sets maximum penalties and fines and, (e) carries forward from the Telecom’s Act the application of NP & CPS, directory services and 112 Emergency Centres to the new converged services Prepared by NJ Tshabalala

10. CHAPTERS Cont… 12: provides for the continued existence, financing, administration and management of the USA 13: provides for transition and conversion of existing regulations and licenses to ensure that they conform to the provisions of the Bill Prepared by NJ Tshabalala

11. BROADCASTING (Broadcasting Act, IBA Act, ICASA Act, Sentech Act) Broadcasters Broadcast Content Signal Distribution (Sentech, Orbicom, etc.) TV & Radio Sets End Users ENHANCED DATA SERVICES (Telecommunications Act, ECT Act , ICASA Act) VANS, ISP, etc. Information Services Telecommunication Networks (Telkom, SNO, Sentech, USALs) End Users Computers & Data Terminals VOICE/DATA CONVEYANCE SERVICES (Telecommunications Act, ICASA Act) Fixed Networks (Telkom, SNO, USALs) End Users End Users Voice Data Voice/Data Terminals Mobile Networks (MCOs, USALs) CONVERGENCE MAPPING: Pre-Convergence Prepared by NJ Tshabalala

12. Broadcasting Information Services Communications Services Data Voice CONVERGENCE: SERVICES Prepared by NJ Tshabalala

13. Signal Distribution Packet Switched Communications Networks Circuit Switched Mobile Fixed CONVERGENCE: NETWORKS Prepared by NJ Tshabalala

14. TV & Radio Sets Data Terminals Communications Terminals Fixed Telephones Mobile Telephones Computers CONVERGENCE: CPE Prepared by NJ Tshabalala

15. CONVERGENCE MAPPING: Post Convergence C0MMUNICATION SERVICES (Convergence Act) SERVICE PROVIDERS (Broadcasters VANS, ISP, etc.) COMM APPLICATION SERVICES COMM’S NETWORK SERVICES CUSTOMER PREMISES EQUIPMENT END USERS COMM SERVICES END USERS END USERS VOICE DATA Prepared by NJ Tshabalala

16. LICENSING REGIME • 3 tier horizontal licensing regime • Comm’s Network services • Comm’s services • Application services • 3 types of licensing methods • Individual • Class • exemptions Prepared by NJ Tshabalala

17. INDIVIDUAL LICENCES CLASS LICENCES CONVERGENCE MAPPING: Licensing COMM NETWORK SERVICES COMM SERVICES APPLICATION SERVICES SPECTRUM Prepared by NJ Tshabalala

18. LICENCES CONVERSION COMM NETWORK SERVICE PSTS Licence COMM SERVICE VANS Licence APPLICATION SERVICE ? COMM NETWORK / COMM Prepared by NJ Tshabalala

19. TRANSITIONAL PROVISIONS • All existing licences to remain valid for their full duration • Vertical licences to be converted to horizontal licences with the agreement of each licensee: all existing rights preserved? • Additional network service licences by invitation • All existing network operators to be confined to their vertical markets until licences have been re-issued (12 months) Prepared by NJ Tshabalala

20. OTHER PROVISIONS • Roles of Minister & Regulator • ICASA has full responsibility for regulatory processes • The Minister has policy-making powers • Competition issues • ICASA’s concurrent jurisdiction with the Competition Commission over general competition matters • ICASA retains exclusive jurisdiction over sector specific competition matters Prepared by NJ Tshabalala

21. OBSERVATIONS • There will be enormous regulatory load stemming from converged legislation. • Encroachment of rights will increase. • Uncertain regulatory environment • Weak statutory protection • Change will encourage opportunistic market behaviour • Convergence as a cover for rapid liberalisation Prepared by NJ Tshabalala

22. OBSERVATIONS Cont... • Raised expectations (VANS, Sentech, etc.) may cause further disputes in the market. • How independent is the Regulatory. • How effective is the Regulatory in influencing the policy. Prepared by NJ Tshabalala

23. CONCLUSIONS • Ability to compete is the preferred solution • Convergence is for rapid liberalisation • ICASA to enable the sector to increase GDP contributions from 4% to 20% in 5 yrs. • ICASA to prescribe additional terms and conditions where licensee has SMP, control over essential facilities or vertically integrated • Communications network services licensees must interconnect and lease facilities • ICX & FL Agreements still to be filed with ICASA Prepared by NJ Tshabalala

24. CONCLUSIONS cont... • Post-convergence presents threats and opportunities • Manage already raised expectations (VANS, Sentech, etc.) which may cause further disputes in the market • Non-compliance with Convergence Act should have a fine of up-to 10% of annual turnover Prepared by NJ Tshabalala

25. Questions? Prepared by NJ Tshabalala

26. Concluding thought for the day “ If you are not confused by what`s going on around you, you`re obviously not in touch” - Dr Tom Peters THANK YOU Prepared by NJ Tshabalala