Speech by SE Kholwane During Second Reading Debate on the Electronic Communications Amendment Bill

7 November 2007

Introduction

It would be important for me to appreciate the well calculated decision of the Public Enterprise Portfolio Committee to suggest that it would be best to licence Infraco through an amendment to the Electronic Communications Act.

When debating the second reading of the Infraco Bill I said “Across political spectrum we are all in agreement that the cost of telecommunication services in this country (South Africa) is too high and this is a hindrance to our economic growth”

Objects

All the stakeholders appeared before the committee on the 31st October 2007 during the public hearings shared the common objectives of government:-

  • To expand availability of access to information, communications and technology infrastructure and services; and
  • To make strategic interventions in infrastructure investments.

However differ on how the government should achieve these objectives. Most of the submissions with the exception of the few suggest that normal processes of licencing should be adhered to.

We are moving from the premise that government does have a role to play in this sector, of course respecting the views for those who think that only competition is the solution.

Some holds a strong view that there has been no market failure in the ICT but a policy failure, and therefore calls for less government intervention.

Of course they based their argument on the fact that government intervention through Telkom could not yield expected results, and therefore government should fold its arms and watch, and rely on the good will of the market to provide solutions. The fact we dispute.

Our view is that should learn what went wrong with Telkom and ensure that it does not repeat itself.

The Bill provides an opportunity to government to make strategic interventions on infrastructure investments when ever deemed it necessary. To enable government to address some of the significant challenges such as:

  • Improving on government service delivery and support and support ASGISA,
  • Provide the much needed bandwidth for strategic projects and consumers at large.

We should accept that we could not find the logic to limit the state intervention to Infraco whilst we all agree that ICT is a dynamic industry.

However we have noted that the current provisions of the Principal Act, does not provide for the facilitation of strategic interventions by government in ICT sector hence the proposed amendments.

Preamble

The Preamble of the Bill emphasize that:

  • The strategic intervention by government should be to reduce cost of access to information, communications and technology.
  • The intention of the state is to expand the availability of access to information, communications and technology infrastructure on a wholesale basis at cost-oriented rate and services to operators in the Republic.

Amendment of section 1 of the Principal Act

Section 1 of the Bill seek to amend Section 1 of the Principal Act by inserting a new definition of “public entity” which has the meaning as assigned to it in section 1 of the Public Finance Management Act,1999.

Amendment of section 3 of the Principal Act

In line with our objective as a developmental state this amendments seek to empower government to intervene in the ICT sector. Our considered view is that we do need special dispensation to facilitate the efficient licencing of public entities by the authority (ICASA).

However to safe guard that the Minister may issue a policy direction after obtaining Cabinet approval in order to:-

  • Initiate and facilitate intervention by government to ensure strategic ICT infrastructure investment; and
  • Provide for a framework for the licencing of a public entity by the Authority in terms of Chapter 3.

Policy matters

We should emphasize the point made during the Infraco Bill debate that both ministries should develop a policy that will regulate the operations of both Sentech and Infraco, to avoid duplications.

Linked to that is the scheduling for Sentech.

Conclusion

We would to extend our appreciation to the industry stakeholders who participated during the public hearings. The state law advisors, committee researcher who have been with us throughout the processes.

The ANC supports the Bill.

Thank you.