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General Licence Fee Regulations

ICASA has published General Licence Fee Regulations under the ECA – they come into effect immediately as of 1 April 2009.

ICASA General Licence Fee Regulations 2009

The final regulations are very similar to the previous draft. Annual licence fees are set at 1.5% of Gross Profit (total revenue derived from licensed services less total costs directly incurred in the provision of such services). The calculation of the amount due must be based on audited financial statements (or sworn statements where audited statements are not required by law), which must be submitted along with the payment.

Fees can be paid quarterly or annually: late payments will be subject to stiff interest penalties and fines for non-compliance.

The publication of the final regulations was accompanied by an updated Position Paper which reflects ICASA’s view on the submissions it has received and the changes made from the second draft.

Supplementary Position Paper on General Licence Fees Regulations 2009

ellipsis offers full advisory services on licence fee obligations as part of its compliance solutions for licensees under the electronic communications act.

Ellipsis Regulatory Update – March 2009

Ellipsis Regulatory Update March 2009

Regulatory Updates are released onto the ellipsis site on a delayed basis.

New Draft of Licence Fee Regulations – ICASA sees sense

ICASA have published a second draft of licence fee regulations which show a remarkable shift towards a considered basis for levying fees on the industry. This is in stark contrast to the previous draft which was … misguided … and universally disliked by industry and other interested parties.

Second Draft General Licence Fee Regulations 2009

Comment due by 20 March 2009.

ICASA has also published an accompanying Position Paper setting out the reasoning behind the revision of the draft.

Position Paper on General Licence Fees March 2009

In summary ICASA proposes:
*annual licence fees set at 1.5% of Gross Profit (as opposed to 3% of Gross Revenue) where such Gross Profit accrues from licensed activities
*annual licence fees to be paid annually within 6 months of financial year end of the licensee & supported by audited financial statements or sworn financials (where there is no legal requirement to have audited financials)
*administrative fees which are significantly reduced from those previously proposed
*small business meeting the definition under the National Small Business Act 102 of 1996 to be exempted
*that any outstanding payments from the major licensees set as fixed licence fees will be written off subject to a final payment to be negotiated

ellipsis opinion: ICASA gets its fair share of criticism but they should be applauded for the manner in which they have recognised the deficiencies of their previous approach and set out to remedy them. The publication of a Position Paper is also thoroughly welcome and greatly assists general understanding amongst those affected. This seems to be a growing trend from some divisions of ICASA and it can only be hoped that the practice is more widely adopted by the Authority.

Aside from some small reservations around administrative fees the second draft represents a lucid and practical approach to licence fees within the current industry and regulatory environment.

Draft Fees Regulations (updated)

Controversy continues to surround ICASA’s Draft Licence Fee Regulations which have been roundly criticised by industry and other commentators. The regulations were panned at public hearings conducted on 13 & 14 January 2009 and information to hand is that they are in or a major overhaul.

ICASA withdrew their original draft and then promptly replaced it with pretty much the same document.

ICASA’s Draft Licence Fees 2008

The public comment process closed on 5 December 2008. (Which means that ICASA’s plan to have these finalised in early December will also need to withdrawn and replaced by a hopeful estimate of March/April 2009.)

Download the on the Draft Licence Fee Regulations.

Industry submissions on the Draft Licence Fee Regulations
Cell C (word doc)
British Telecom
Telkom
Neotel
MTN
ISPA

Why should former VANS licencees get excited about these regs? Easy: currently you pay an annual licence fee equal to 0.1% of your revenue derived from licensed services less VAT and one or two other deductions.

ICASA are proposing annual licence fees of
- 3% of “annual turnover derived from licensed activities” for individual licences &
- 1.5% of “annual turnover derived from licensed activities” for class licences.

With the likelihood being that most VANS will be converted to IECNS and IECS/CECS licences this represents a massive increase on the tax you pay for the efficient regulation of the sector and the protection you receive against the anti-competitive conduct of the incumbent operators. Or not.

ICASA already recovers significantly more in licence fees than its budget, and there is little in the document which gives any proper explanation for the proposed increases.

USAF Contribution Regulations

ICASA have finalised the Regulations relating to the obligation on licensees under the Electronic Communications Act (ECA) to make contributions to the Universal Service and Access Fund (USAF).

The Universal Service and Access Fund Regulations, 2008, were published on 10 October 2008 as General Notice 1270 in GG 31499.

The regulations will come into effect on 1 April 2009.


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Legal notices:
This site and the content on it is intended to facilitate greater understanding of the regulation of electronic communications in South Africa. Content does not, obviously, constitute legal advice. If it did there would probably be an invoice attached. Please use the site to become better informed and save yourself some money if and when you do need to consult a suitably qualified advisor.

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