The Electronic Communications Act 36 of 2005 (ECA) came into force on 19 July 2006 to regulate electronic communications in South Africa. The effect of the ECA is that the 1996 Telecommunications Act and the majority of the 1999 Broadcasting Act are repealed, new licence categories are introduced for both broadcasting and electronic communications to facilitate the growing convergence both within and between these sectors.

Transitional measures are put in place for the conversion of existing licences and processes introduced for the grant of new licences. Increased powers are granted to the sector regulator (ICASA) with regard anti-competitive practices, interconnection and facilities leasing, particularly with the recognition of the concept of operators having “significant market power”. Powers of the regulator regarding both consumer and competitor complaints are increased.

The Electronic Communications Act provides for significant stability during the transition period, with any licence issued prior to the commencement of the ECA remaining valid and anyone lawfully entitled to provide a service without a licence prior to the commencement of the ECA remaining so entitled.

ICASA

The Electronic Communications Act was promulgated simultaneously with the promulgation of the Independent Communications Authority of South Africa Amendment Act. This is because the Independent Communications Authority of South Africa (ICASA) as the regulator for the telecommunications and broadcasting sectors (and now the postal and courier sector as well) has a key function to play in the interpretation and implementation of the ECA.

Affected Institutions

Users of existing telecommunications services.

  • Existing telecommunications service providers and broadcasters.
  • New entrants in both the telecommunications and broadcasting sectors, as well as players in the emerging converged electronic communications space.
  • Content providers are not directly affected by the ECA, though there may be an indirect impact where they make extensive use of electronic communications channels to deliver their content.

The Players

The key role-players in the Electronic Communications Act are:

  • Minister of Communications – together with the Department responsible for policy issues, in particular determining when certain key licences may be issued by ICASA.  The ECA attempts to clarify some of the separation of powers issues between the Minister and ICASA that have previously plagued the sector;
  • ICASA – ICASA bears primary responsibility for the conversion of existing licences, the granting of new licences (including certain minor licences (particularly those with limited geographical or socio-economic impact) where Ministerial determination is not needed, promoting competition in the sector, ensuring interconnection and facilities leasing arrangements are implemented fairly and dealing with both competition and consumer complaints;
  • Universal Service Agency – responsible for collecting contributions from licensees and funding and/or implementing projects to promote universal service provision;

Licensees (both individual and class licensees) for:

  • Electronic communications networks services – those operators with their own facilities and networks, such as Telkom, the SNO, Sentech, MTN, Vodacom and Cell C. It is still uncertain whether Internet Service Providers (“ISPs”)and particularly first tier ISPs may obtain such licences;
  • Electronic communications services – those operators providing services using the facilities or network of a network services licensee, which will be most second or lower tier ISPs and possibly MVNOs and similar service providers;
  • Broadcasting services – existing and new players in the radio and television space (see discussion below for more detail),

More detail on these licences (what they entitle a holder to do, who requires them, terms and conditions of licence grant and the like) is to be furnished by ICASA in due course;

Providers of licence-exempt services

The ECA contemplates certain services being licence exempt, such as reselling the services of a licensee – which is prevalent in both the cellular and Internet space. It is uncertain whether an ISP reselling the services of a licensee (such as M-Web re-selling Telkom ADSL accounts) will require a licence or be licence exempt. Similarly, it is uncertain whether an MVNO (a Mobile Virtual Network Operator – a company that buys network capacity from a network operator to offer its own branded mobile subscriptions and value-added services) will require a licence or not (will most likely be based on the extent of the operators own switching and billing capability).

Consumers

Users of electronic communications services, who are given additional choices, rights and protections in terms of the ECA.

Compliance Requirements of the Electronic Communications Act

The initial phase of the introduction of the ECA will be the transition of existing licences (such as that held by Telkom, Vodacom, Sentech or the value-added network services (VANS) licence  currently held by most ISPs) to the new licensing framework.

Existing licence holders are obliged to comply with ICASA’s notice/s for the conversion of licences.

Section 7 of the ECA prohibits the provision of services without a licence. However, the term “services” is not defined in the ECA and is most likely to be limited to those electronic communications or broadcasting services determined by ICASA as requiring a licence.

No penalties are indicated in Section 74 for the commission of such an offence.  As in the 1996 Telecommunications Act, a consumer of services does not commit an offence by using a service requiring a licence yet provided by an operator without a licence (voice, data or otherwise – so listening to an unlicensed broadcaster is not an offence, nor is using an unlicensed voice telephony provider) and is not subject to any penalties (other than the possible loss of the service).

Compliance with existing licence conditions and Regulations is prescribed by the ECA.

The ECA places the responsibility for revising current compliance obligations on ICASA.  With the complexity of the licence conversion process and the severe staff shortages currently experienced by ICASA, it is unlikely that ICASA will concentrate on such revisions for the foreseeable future.

Sanctions of Non-Compliance

As indicated above, Section 74 of the ECA dealing with penalties for non-compliance is defective and only provides penalties for failing to comply with licence terms relating to construction and placing into service of facilities or networks.  The primary penalty is a compulsory outsourcing of such facilities or network. No other penalties are stipulated.