[9 August 2014] After an inordinate delay, ICASA have published a reasons document which sets out their reasons for both the General Licence Fee Regulations 2012 as well as the General Licence Fees Amendment Regulations 2014. This follows unhappiness from industry regarding the latest amendment, with at least one industry party lodging a formal request for reasons under the Promotion of Administrative Justice Act.

Reasons Document General Licence Fees Regulations 2012

Our view is that what should be a relatively straightforward exercise remains a mess and that the 2014 Amendment has exacerbated this and made ICASA’s position – essentially an increase in licence fees to take into account its inability to regulate licence fees – all the more indefensible.

___

[5 April 2014] ICASA has published final amendments to its General Licence Fees Regulations.

ICASA General Licence Fees Amendment Regulations, 2014

The sole amendment effected is to the definition of “Licensed Services”:

Previous definition:

“Licensed Service” as defined in the Electronic Communications Act under “broadcasting service”, “electronic communications service” and “electronic communications network service”; and as contained in the relevant licence and does not include the resale of electronic communications services, service provider discounts, agency fees, interconnection and facilities leasing charges, and government grants and subsidies;

New definition:

“Licensed Service‘ as defined in the Electronic Communications Act under “broadcasting service”, “electronic communications service” and “electronic communications network service”, and as contained in the relevant licence.

We do not believe that this is in any way helpful. At best it is a half-fix of only one of a multitude of problems with the General Licence Fee Regulations. It clarifies nothing for licensees and will not make ICASA’s calculation and collection of annual licence fees any easier.

___

[28 February 2014] A draft amendment to the General Licence Fees Regulations 2014 has been published for comment. The sole purpose of the amendment is to try and clarify confusion relating from the definition of “licensed services” and the revenue which should be included and excluded from service licence fee calculations.

Draft Amendment to General Licence Fee Regulations Feb 2014

Comment is due by Monday 10 March 2014.

___

ICASA has finalised its revision of the licence fee regime for electronic communications and commercial broadcasting licensees and published the ICASA General Licence Fees Regulations 2012, which come into force on 1 April 2013. The Regulations set out the manner of calculation of annual licence fees and update the various administrative fees payable for licence applications, amendments and the like.

Formula:

Pa = Payable Annual licence Fee

R = Revenue from licensed services

B = applicable percentage per table below dependent on license revenue in accordance with this schedule read with regulation 3(1).

Pa = R x B

License Revenue (R) (Rand)

Percentage applied (B) (%)

0-50 000 000

0.15

50 000 001 – 100 000 000

0.20

100 000 001 – 500 000 000

0.25

500 000 001 – 1 000 000 000

0.30

1 000 000 001 +

0.35

 

“Licensed Service” as defined in the Electronic Communications Act under “broadcasting service”, “electronic communications service” and “electronic communications network service”; and as contained in the relevant licence and does not include the resale of electronic communications services, service provider discounts, agency fees, interconnection and facilities leasing charges, and government grants and subsidies;

“Revenue” means Revenue as defined in terms of the International Accounting Standard 18 and disclosed in the Licensee’s audited Annual Financial Statements, i.e. the gross inflow of economic benefits during the period arising in the course of the ordinary activities of the entity when those inflows result in an increase of equity other than increases relating to contributions from equity participants.

Failure to pay the annual licence fees will result in the suspension of the licence issued by the Authority in terms of Chapter 3 of the Act until such time that the annual licence fees, plus interest, are paid in full.

___

Should a licensee need to attend to financial submissions prior to 1 April 2014, the method for calculating ALF has changed periodically and the relevant historical changes can be found below: