The Department of Telecommunications and Postal Services published the draft Electronic Communications Amendment Bill (the Draft Bill) for public comment on 17 November 2017. Following receipt of comments from the public, an amended version of the Bill (the Final Bill), which has been approved by the Cabinet, was published in the Government Gazette on 31 August 2018.
The Final Bill has been submitted by Cabinet, for tabling in the National Assembly (NA). Should the NA pass the Final Bill, it will be referred to the National Council of Provinces (NCOP) for consideration. If the Final Bill is accepted by the NCOP then the Final Bill will be sent to the President for his assent and signature where after the Final Bill will become law.
We highlight below some key issues addressed in the proposed legislation as well as the amendments arising from the public comment process.
Wireless open access networks
The Final Bill remains unchanged from the Draft Bill as far as the creation of a Wireless Open Access Network (WOAN) is concerned. The WOAN will be tasked with providing Electronic Communications Network Services (ECNS) to licensees on a wholesale open access non-exclusive basis, subject to universal service obligations imposed by the Independent Communications Authority of South Africa (ICASA).
The Final Bill retains the distinction between high demand radio frequency spectrum (i.e. spectrum where the demand for access to the radio frequency spectrum resource exceeds supply or spectrum which has been fully assigned) and non-high demand radio frequency spectrum. The Final Bill also retains the requirement that all unassigned high demand spectrum is to be assigned and managed by the WOAN.
The Final Bill, however, sets out the requirements for a WOAN licence applicant. All applicants for the WOAN licence must take the form of a consortium of persons who must have not less than 30% equity ownership by persons from historically disadvantaged groups. If any member of the consortium applying for the WOAN service licence provides electronic communications services, ICASA must require functional separation between such electronic communications services and the member's participation in the WOAN, which must be provided by an independently operating business entity. The Final Bill also requires that an applicant must provide for effective participation by targeted groups, including women, youth and persons with disabilities. The Final Bill does not, however, elaborate on what constitutes "effective participation" in this context.
The obligation to provide wholesale open access
The Final Bill provides that all electronic communications network service licensees, except ECNS licensees that provide broadcasting signal distribution or multi-channel distribution services, must provide wholesale open access, upon request, to:
- any other person licensed in terms of the Electronic Communications Act; and
- persons providing services pursuant to a licence exemption in accordance with the terms and conditions of a wholesale open access agreement entered into between the parties, in accordance with the general open access principles, except in case of technically inability.
An electronic communications network service licensee that is determined a vertically integrated operator by ICASA in the wholesale open access regulations must, in addition to the above open access requirements, implement 'accounting separation' in a manner to be prescribed by ICASA.
An ECNS licensee that is determined a deemed entity by ICASA in the wholesale open access regulations must, in addition to the above open access requirements, comply with wholesale open access principles on its electronic communications network, including participating in active infrastructure sharing, adhering to prescribed wholesale rates and achieving specific network and population coverage targets.
ICASA must, within 18 months of the commencement of amendments to the ECA contemplated in the Final Bill, prescribe wholesale open access regulations which must, among other things:
- identify vertically integrated operators;
- describe accounting separation procedures for vertically integrated entities; and
- provide guidance on determining whether an entity is a "deemed entity".
Spectrum trading, sharing and refarming
The Final Bill facilitates the trading of licensed spectrum and does not retain the Draft Bill's prohibition of trading high demand spectrum. The Final Bill provides for radio spectrum sharing of both high demand spectrum and non-high demand spectrum, subject to certain restrictions. In order for licensed high demand spectrum to be shared the licensee must request approval from ICASA. Conversely a licensee simply needs to notify ICASA of its intention to share non-high demand spectrum. The Final Bill's provisions relating to spectrum "refarming" (meaning the re-use of an assigned frequency band for a different application) remain unchanged, with the main takeaway being that spectrum "refarming" may only be conducted with ICASA's approval.
'Use it or lose it' principle
The Final Bill keeps the 'use it or lose it' principle. The Final Bill states that ICASA is empowered to withdraw any radio frequency spectrum licence where the licensee has failed to use the spectrum for a period of two years. The Draft Bill empowered ICASA to exempt, upon good cause shown, SMMEs and new market entrants from the 'use it or lose it principle' with the exemption operating for an indeterminate time. The Final Bill, however, states that the exemption shall run for a set period to be defined by notice in the Government Gazette.
The right of access to property
The Final Bill expands upon the rights of ECNS licensees to enter upon and/ or use property for the purposes of deploying electronic communications networks and facilities. The Final Bill limits these rights by placing strict obligations on ECNS licensees. ECNS licensees must now give at least 30 days' notice, in writing, to the owner of property or occupier of the affected land. The notice will set out the reasons necessitating the access, the proposed date of access, explain the objection process and provide environmental, health and safety information.
The Final Bill creates mechanisms whereby owners of private property may challenge the deployment of or request a deviation or alteration of electronic communications networks and/ or facilities on their property. The position taken on adequately served areas remains unchanged from the Draft Bill with the main takeaway being that service providers wishing to offer additional services in adequately serviced areas must first obtain the approval of ICASA before said services can be provided.