CELLULAR OPERATORS’ JOINT PRESENTATION 3 May 2006

1. FILMS AND PUBLICATIONS AMENDMENT BILL, 27 OF 2006 CELLULAR OPERATORS’ JOINT PRESENTATION 3 May 2006

2. INTRODUCTION Structure of Presentation Part A: General Comments Part B: Specific Comments

3. PART AGENERAL COMMENTS

4. OUTLINE OF PRESENTATION CONTENT ON MOBILE NETWORKS INTRODUCTION • CONTENT PROVISION OVER MOBILES • Content Value Chain • Challenges for Mobile Operators • OPTIONS OF REGULATION • OPERATORS CODE OF GOOD PRACTICE • Background and Timeframes of Negotiations • Alignment with International Best Practice • Key Commitments Under the Code • WASPA CODE OF CONDUCT • Support by Cellular Operators • Operators Code of Good Practice enforces WASPA Code

5. CONTENT PROVISION OVER MOBILES

6. INTRODUCTION CONTENT ON MOBILE NETWORKS • There are a variety of means that any content may be accessed by a mobile subscriber, for example: • Content portal of a Mobile Operator – “MTN Loaded / Vodafone Live / Cell C Juice” • Third party content providers – by agreement with Mobile Operator • The Internet • Peer to peer communications • Content can be requested and delivered via: • SMS, IVR, WAP, WIG, USSD, MMS • Content can be requested on one bearer and delivered on another. • This presentation will address these means and entities in an effort to explain the complexities involved in the accessing of mobile content.

7. STAKEHOLDERS • These entities can be loosely classified as : • Content creators • Content distributors (Internet Service Providers (ISPs), website owners, Wireless Application Service Providers (WASPs). • Third party content aggregators (WASPs with own infrastructure) • Portals • Network operators; and • Consumers • All of the abovementioned parties play a role in the development of advertising and delivery of services of which adult content provision is a portion

8. AREAS WHERE MOBILE OPERATORS DO NOT HAVE CONTROL The Internet as an Open Network (not operator business) • Inherently the internet is the ultimate open network. Any destination is an accessible IP address, therefore the Mobile Operators do not have control over content accessed by its subscribers via the internet. • It is ultimately the responsibility of the person to whom the communication is destined to secure the content • The enacted balance between civil liberties and consumer protection must be managed • Peer to Peer Communications (subscriber responsibility) Direct communications between individual subscribers (ex. SMS, MMS) • Operators may not access or intercept communications in terms of the Constitution and privacy legislation ( interception is facilitated in terms of RICA)

9. AREAS WHERE MOBILE OPERATORS DO NOT HAVE CONTROL 1 Consumer Content Creator Content Distributor Third party Content Aggregator Portal Network operator 2 The Mobile Operators have little control over the WASPS due to contractual relationships based on the use of numbers and the use of their networks. Due to the level of control, the Mobile Operators have taken a number of self regulatory steps which will be explained below.

10. OPTIONS OF MOBILE OPERATORS

11. OPTIONS FOR REGULATION OF WASP CONTENT DELIVERED TO MOBILE HANDSETS: Co-operative self-regulation: • Flexible, keeps track of developments and is already in place • Preferred option as far as reasonably possible • Common commitment to development of the market in a way that will meet customers’ and other stakeholders’ concerns • Industry Representative Body Code (IRB Code) • WASP Code of Conduct • WASPA MOU Formal regulation: • Little or no flexibility could be the consequence • Difficult to keep track of developments in fast moving telecoms market • Can act as a platform for action against abuse by external parties over whom Operators have no control (eg. Spam and spammers) but does not negate the right to include self-regulatory mechanisms • ECT & EC Acts • Films and Publications Act

12. IRB Code

13. IRB CODE Formal regulation: • ECT Act 25 of 2002 • Chapter XI: Limitation of liability for Service Providers acting as conduits of content • Code of good practice signed by Mobile Operators and effective as of 2 November 2005 • However, the Mobile Operators are to resubmit to the Minister in light of recently published guidelines for IRB Codes

14. OPERATORS CODE OF GOOD PRACTICE Key provision under the IRB Code Mobile Operators: • Facilitate compliance by WASPs to WASPA code of conduct and WASPA advertising guidelines • Introduce procedures to receive and respond to take down notifications • Place an obligation on WASPs not to place advertisements depicting explicit sexual content and must not be placed in general media. • Introduce measures to prevent access by children to adult content. • Undertake not to spam.

15. WASP CODE OF CONDUCT

16. PROVISIONS IN THE WASP CODE OF CONDUCT • MTN and Cell C mandate membership to WASPA • Vodacom contractually mandates compliance with WASPA code of conduct, advertising guidelines and complaints resolution procedure • The Mobile Operators contribute to WASPA’s operating expenses until it is sustainable • The Mobile Operators require WASPs to use a separate number range for the provision of content of an adult or sensitive nature • WASPs have six (6) months (until September 2007) to migrate ALL content of an adult and sensitive nature to a separate number range • Operators to educate consumers regarding the nature of content provided via the separate number range

17. PART BCOMMENTS ON PERTINENT SPECIFIC PROVISIONS

18. OUTLINE OF SPECIFIC COMMENTS IN THE SUBMISSION • SECTION 1: • The definition of child abuse as per submission • The definition of internet service provider • The definition of chat rooms • SECTION 2: • References to broadcasting & mobile handsets • The inclusion of a classification office & compliance officers • Classification of ALL content • Exemption of certain material • The business of adult premises • Internet and access / Service Provided • CONCLUSION

19. SECTION 1- DEFINITIONS

20. Section 24C(1) Definition of “internet service provider” • Concern: • distinction between internet service providers & mobile operators • providing a chat room service vs. hosting a website • Recommendation: “24C (1) Service providers who provide child-oriented services, including chat-rooms, shall – (a) ….”

21. Definition of “chat room” • Concern: • requirement to monitor a chat room service should be placed on a chat room moderator • right to customer privacy • inability of mobile operators to monitor • Chat room = real time or on-line • SMS & MMS = peer to peer private communications and such privacy may not be infringed • Recommendation: “ chat-room means a World Wide Web site in which people hold discussions by sending messages to people on the same site in real time, both generally and on a peer to peer basis”.

22. SECTION 2

23. Section 2(a)Reference to broadcasting • Concern: • Contravention of s192 of the Republic of Constitution of the Republic of South Africa Act No. 108 of 1996 • Protection against age-inappropriate broadcasts - Electronic Communications Act ( 2005) - Broadcaster’s Code of Conduct - WASPA Code of Conduct - ASA Guidelines • Recommendation: Delete the reference to “broadcasting” from section 2(a)

24. Section 2(a)Reference to mobile handsets • Concern: • If mobile handsets are mentioned then, what about computers, television and printed media? • Platform VS content: Regulation ought to be on the internet • Technology neutral approach is preferable (ECT Act) • Recommendation: Delete reference to handsets as it is not a content category. The legislation should be technologically neutral.

25. Section 9AClassification Office • Concern: • Potential capacity constraints if all content is to be classified • The timeframes for classification submissions are not addressed? • Recommendation • Strict time frames for classification must be stated and adhered to • Support an approach of co-regulation to alleviate capacity constraints

26. Section 18Registration of Films and Games (Classification) • Concern: • Innovation will be hampered • Time to market of latest material determines the success of mobile content • Constraints to timeous classification and delivery to markets • Purpose of classification of ALL content • Recommendation in conjunction with s 3.1 • Strict time frames for classification. • Support an approach of co-regulation to alleviate capacity constraints • Propose that an existing self regulatory bodies and other bodies such as IRB work with FPB

27. Section 23Exemptions • Concern: • Board’s discretion is limited to only Films - s23(2) • Fundamental limitation and negation of discretionary powers • Exemption does not apply to publications – s23(2) • Recommendation: • Board’s discretion should be extended • Legislation should take into account other material such as publications and interactive computer games

28. Section 24 read with section 15ABusiness of adult premises • Concern: • Impossible for mobile content providers to comply with provision or apply for licensing • Currently regulations only provide for licensing of businesses operating from physical locations • Recommendation: • Section 24 (1) to be extended to include the licensing of virtual operators such as WASPs operating from virtual premises • A new section 24D be inserted to set out the definitions for virtual adult content; virtual premises and mobile content services • Suggested wording is included in the Operators’ Submission

29. Section 24 CInternet Access & Service Provider • Concern: • Access via cellular technology e.g.. GPRS or 3G bearer services • ISP’s = internet access providers not content providers • Mobile Operator’s role and function as access provider not content provider • Offenders are unknown until crime is committed – S24c(1)a • Application of S24c(1)(b) - not practical on mobile phones & services • Practicality of age classifications on mobile environment • No ubiquitous filtering software available to filter or block pornographic material • ECTA provisions • Recommendation: • Classification in mobile environment be restricted to “restricted” or “unrestricted” • Obligation to be extended to allow for the implementation of alternative solutions e.g.. device agnostic or network based solutions to block or filter pornographic content

30. CONCLUSION

31. Jurisdiction • Concern: • Concurrent jurisdiction in terms of different legislation • ECA • Recommendation: • Agreement between different regulatory bodies on issue of concurrent jurisdiction

32. Operators support co-operative self regulatory framework • Co- operative self regulatory framework begiven time to deliver • Operators pledge their unequivocal support to processes aimed at dealing with the issue and: • Operators can only provide the necessary technological tools • Role of parents remains critical and irreplaceable

33. THANK YOU