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Reasons for issuing only an IECNS licence to Broadband Infraco

ICASA has released a reasons document setting out its logic in awarding Broadband Infraco an individual electronic communications network service (IECNS) licence while refusing its application for an individual electronic communications service (IECS) licence.

Broadband Infraco ITA Reasons Document

Comment
This is a very interesting document – while the thinking is muddled in parts it is noteworthy that:
- The committee set up to deal specifically with the matter recommended to ICASA’s Council that both licences be granted and set out their conclusion and reasons for why they believe that Infraco met the requirements of the ITA.
- Towards the end of its deliberations this committee was notified of the Minister’s intention to amend the Infraco licensing policy directive to make it clear that the ITA was limited to an IECNS. Once the draft amendment was published for comment they got external legal opinion that the process should not be suspended pending the finalisation of the amended policy directive. They also believed that it was not legally defensible for the Minister to interfere in the licensing process at such a late stage.
- Council did not accept the recommendation and sought a further opinion and engaged the Minister by letter on the concerns with the amended directive [no response was ever received to this].
- Then things get a little confused as the Reasons Document does not directly reveal what this opinion advised. It seems from the timing of events, however, that the opinion related solely to the ministerial amendment and did not advise against the awarding of an IECS licence to Infraco
- Thereafter the committee recommended again to Council that the IECS licence be granted and Council rejected this for the reasons stated at the very end of the document, viz. that Infraco failed to demonstrate how their strategy of targeting large entities with STM-1 + requirements would contribute to affordability and universal access and that it amounted to cherry-picking. They also did not provide a roll-out plan for ECS which meant they had not met the requirements of the ITA.

Infraco are entitled to take this decision on review and rumours have abounded for some time that they intend to do so. If they do – implying that they will be going directly against the expressed intention of the Minister – it should make for interesting viewing.

Broadband Infraco IECNS licence

Broadband Infraco (Pty) Ltd was granted an individual electronic communications network service (IECNS) licence by ICASA on 19 October 2009.

Broadband Infraco IECNS licence

The licence terms and conditions have been tailored to Infraco’s mandate as set out in the Broadband Infraco Act 33 of 2007 and the Policy Direction regarding the Licensing of Broadband Infraco issued by the Minister of Communications on 29 October 2008. Why only an IECNS licence?

The terms and conditions in the body of the licence document oblige Infraco to provide national electronic communications network services in accordance with a roll-out plan set out in a Schedule to the licence. These services must be provided on a open-access and non-discriminatory basis (clause 2) and at prices lower than “prevailing market prices” and in line with international benchmarks (clause 7). There are also the standard clauses found in the IECNS licences issued to private ECNS providers.

The Schedule lists the facilities which Infraco must establish within metropolitan areas as well as the rural areas in which it must establish PoPs.

ellipsis comment: this is one of the finest documents to come out of ICASA in some time but those with an interest in doing so will need to keep a keen eye on how things develop in practice.

Minister seeks to restrict Broadband Infraco to an ECNS licence

The political wrangling over the future role of Broadband Infraco – the State-owned Entity (SoE) set up to faciliate the lowering of the costs of communication in South Africa – continues apace. The Minister of Communication has acted quickly on his statement to Parliament that Infraco should not have an ECS licence by publishing draft amendments to the Policy Direction issued by the previous minister as regards the licensing of the entity.

Draft Amendment of the Policy Direction on the Licensing of Broadband Infraco 20091013

The proposed amendments are open for comment until 24 November 2009.

If you want to look at the original policy direction and the history of this matter – http://www.ellipsis.co.za/index.php?s=Infraco.

comment: hard not to have a quiet giggle really – electronic communications in SA is certainly rapidly taking on soap opera characteristics. The net effect of the proposed amendments is to take away the ability of Infraco to compete with other service providers in the retail market – they will be restricted to making capacity available on their network for other licensees to use. It will, in other words, have no direct dealings with the public.

This is probably the right result. No doubt there are some extremely unhappy faces in the Infraco boardroom and rumours of an attempt to fight the DoC on this one are beginning to surface. Meanwhile, nearly 3 years after it was initially mooted, the new SoE still does not have any licensing.

Pass the popcorn please.

Broadband Infraco licensing hearings

The final leg of an epic journey towards legitimacy draws to a close with hearings regarding the licensing of Broadband Infraco – the State-owned Enterprise intended to lower the cost of communicating in South Africa – scheduled for 29 June 2009.

Comments regarding the licence application filed by Broadband Infraco in response to ICASA’s ITA were received from Telkom, Vodacom, the Meraka Institute, Internet Solutions and the Internet Service Providers’ Association (ISPA).

It is anticipated that the licenses will be issued in August 2009.

Broadband Infraco licence application published

The applications submitted by Broadband Infraco (Pty) Ltd to ICASA in response to the ITA to public entities published during March 2009.

Applications for I-ECNS and I-ECS Licence by a Public Entity (Broadband Infraco)

Submissions from the public are due by 19 June 2009. Public hearings, if these are held, will take place on 29 June 2009.

Broadband Infraco licensing ITA issued

Following a policy direction issued by the Minister of Communications on 6 February 2009 ICASA has moved with alacrity in issuing out an ITA which is directed, in reality, solely at the licensing of Broadband Infraco (Pty) Ltd.

ITWeb’s Paul Vecchiatto has the story: Infraco hearings could provoke protests

ITA for I-ECS and I-ECNS licences for a Public Entity

Policy Direction: Licensing of Broadband Infraco

Another missive has arrived from the Ivy Towers of the DoC, this time relating to the finalisation of the licensing of Broadband Infraco (Pty) Ltd, the proposed state vehicle for the lowering of telecommunications costs in South Africa.

The Direction calls on ICASA to accept applications for IECNS and IECS licences from Broadband Infraco. This amounts to a strategic policy intervention “to ensure the licensing of Broadband Infraco (Pty) Ltd to provide the services … in the shortest possible time”.

ICASA is further directed to conduct the necessary processes to accept and consider application for ECNS and ECS licences. After receipt of such applications ICASA is required to publish the terms and conditions for these licences as contemplated in section 9(2)(c) of the ECA, taking into account … “the fact that it is a public entity of a developmental state with additional responsibilities related to the socio-sconomic development of the country and its contribution to [ASGISA]”

ICASA required to commence with the licensing process within 30 days of publication & inform Broadband of the relevant dates for submissions.

While the process is required to be conducted in a “transparent and fair manner” the Minister has “encouraged” ICASA, given the need to “urgently” allow Infraco to play its role in the economy,to consider waiving the requirement for public hearings.

Policy Direction: Licensing of Infraco Broadband

ellipsis comment:
The original decision to proceed with Infraco was taken by Cabinet in August 2007 so the urgency is entirely of their making. There are serious concerns about just how Infraco is going to fit in and, of course, it is yet another government player in the infrastructure industry. Accordingly industry must have sight of whether the representations made as to how Infraco will operate are being properly captured in the licence terms and conditions.

Of even greater concern is the answer to the question: what assets is Infraco sitting with, especially once the purchase of the Transtel and Eskom interests in Neotel is finalised later this year? It seems that Infraco, originally mooted as providing wholesale national ECNS, has eyes only for international submarine cables…

Policy Direction – Licensing of Broadband Infraco

The Minister of Communications has published a draft Policy Directive in terms of section 3(5) of the Electronic Communications Act relating to the licensing framework of Broadband Infraco (Pty) Ltd.

This document is open for comment until 10 December 2008.

Download the Policy Direction on the licensing framework of Broadband Infraco (Pty) Ltd 20081029

Electronic Communications Amendment Act 37 of 2007

To amend the Electronic Communications Act, 2005, so as to empower the Minister to issue an additional policy direction; and to provide for matters connected

Download the PDFtherewith.

Notice of Commencement


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