Up the Creek Arguing Over the Paddle

                                                                                         

It is a no-brainer that in successful nations that have taken full advantage of telecommunications and technology to drive economic growth, the sector is steered by a strong, independent regulator. A true regulator is one that is free to balance the sometimes conflicting needs of the public good, economic growth, broader business needs and the interests of the telecommunications industry.

The Department of Communications in South Africa wants to take direct control over the hiring and firing of councillors of the Independent Communications Authority of SA (Icasa), fundamentally undermining the independence and accountability of the regulator, and increasing the already onerous and unnecessary interference of the Department in the telecommunications industry.

The telecoms sector in South Africa is already in a sorry state, where costs are high and services inadequate. The de facto monopoly telecoms provider has an environment where it can ride rough-shod over both business and consumer. Strategic national assets are abused for economic gain by partially deregulated ex-parastatals. Unclear laws are passed and then backtracked on, and regulation is so fluid that it creates regular crashes in confidence from overseas investors.

South Africa’s competitiveness against our peer nations in the developing world has been steadily eroded, especially when it comes to industries that have great promise for large scale job-creation (call centre industry, services offshoring). South Africa is also struggling to compete against developed nations in areas we should be thriving in, from software development, to Web systems, to the creative and production industries.

This latest attempt by the Department to emasculate Icasa through the Icasa Amendment Bill reduces the regulator to a rubber stamp for Department policy. This is in no-one’s interest, neither the poor and jobless, nor entrepreneurs, nor the consumer, nor the business community, nor international investors.

President Mbeki sent the draft Bill back to Parliament stating that the Bill diminished the role of Parliament, and stressing how important a safeguard Parliamentary oversight was for the impartiality and independence of the regulator. The President took a principled and unequivocal stance on the constitutional requirement for regulators to be independent.

A few weeks ago the communications portfolio committee of the National Assembly amended the problematic Icasa Amendment Bill to address the very major concerns, but the ANC dominated Parliamentary subcommittee then overturned the amendments, reintroducing the minister’s dictatorial powers over Icasa. The bill was debated in the National Assembly in late May and is now, once again with the President. His response is eagerly awaited.

If President Mbeki is still not happy with this second version, then his only recourse is to send it to the Constitutional Court. If the Constitutional Court finds it constitutional, then the act will be passed into law and South Africa goes forward with a flawed piece of legislation. If it is thrown out of the Constitutional Court then we are essentially starting from scratch. It could take anything from a year to two years to get back to where we are now. The South African economy does not have the luxury of time.

The Department of Communications’ calling for a performance management system to be put in place for ICASA councillors – would be entirely sensible. The irony, however, is that the Department insists that it should be the watchdog to ensure that Icasa performs satisfactorily, even though it has consistently ranked near the bottom in performance and delivery scorecards (Sunday Times and Weekly Mail).

It is also the Department with arguably the most unthinkable conflict of interest in our government today. It is the majority shareholder and financial benefactor in Telkom, Sentech and the SABC, but also seeks to be the organisation that sets the rules for them.
The whole industry, as well as beleaguered consumers and business, want Icasa to perform, but under the eye of Parliament, and not a Department that stubbornly wants the role of both the player and the referee, and has proven wanting in both.

Rather than undermine Icasa, it is imperative that the Department focuses on implementing clear policies to make the market more competitive. Clear policies, resolutely implemented will have a positive impact on the future. South Africa should be paddling resolutely forward.

About the author:
As the South African telecommunications industry reels from uncertainty to uncertainty; and the telecoms industry’s independent regulator is threatened. Storm Telecom’s Dave Gale appeals for sense to let us reach open waters.



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