AJIC Issue 14, 2015

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The electronic communications sector is now one of the most advanced infrastructure and services sectors on the African continent. However, it has had a propensity towards low levels of competition among telecoms operators. Advances in the sector include the opening up of the undersea cable markets to competition, the evolution of broadband markets, and high-speed broadband including Gigabit Internet. This gives rise to questions such as: To what extent is the electronic communications sector providing advanced infrastructures and services for communications that will impact well on transformation in other economic and social sectors – financial; real estate and business services; travel and tourism; business process outsourcing; the media; and audio-visual and entertainment sectors? And, to what extent is electronic communications infrastructure providing the networks for advanced research collaboration among African scholars and their American (North and South), Asian, Australian or European counterparts via dedicated national/regional research and education networks (NRENs and RRENs)? So many challenges remain for policy-making and for regulators, including the urgent need for regulation of radio- frequency spectrum for mobile communications and mobile data access; digital migration in the broadcast sector; pricing of electronic communications services; regulation of mobile money transactions; consumer protection in mobile money environments; and broader challenges of regulating for the digital economy, including the appropriate regulation of environments that will promote e-health services and other initiatives in the transformation of economies and society.

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    Case Notes: Considering Possible Regulatory Approaches to Television White Spaces (TVWS): A View from South Africa
    (LINK Centre, University of the Witwatersrand (Wits), Johannesburg, 2015-12-15) Stucke, William
    South Africa is one of the countries in the SADC region carrying out research and tests of television white space (TVWS) technology. TVWS technology, and dynamic spectrum management generally, have the potential to increase significantly the usage of valuable spectrum, that is considered to be scarce, and hence reduce the perceived scarcity. In so doing, TVWS technology has the potential to facilitate greater coverage and penetration of broadband in South Africa. However, this requires a paradigm shift from the traditional manually approved spectrum licensing process, usually on an exclusive basis, to an automated, dynamic process, where spectrum is shared between many users, some of whom will be assigned a higher priority than others. This can be achieved using a geo-location database, which implements complex radio propagation modelling and assigns permissions to use spectrum according to rules specified by the regulator. This, however, requires a new regulatory approach to spectrum assignment. A multi-level use approach is proposed ranging from protected exclusive, through protected secondary. to unprotected licence-exempt. None of these uses may cause interference to a higher level.
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    The Impact of Regulation on Competition in Telecommunications and Piped Gas
    (LINK Centre, University of the Witwatersrand (Wits), Johannesburg, 2015-12-15) Granville, Lara; Irvine, Heather
    This article examines the ex ante powers to regulate competition bestowed on the Independent Communications Authority of South Africa (ICASA) in terms of the Electronic Communications Act, Act No 36 of 2005 (ECA) and on the National Energy Regulator of South Africa (NERSA) in terms of the Gas Act, Act No 48 of 2001 (Gas Act) and the regulators’ recent exercise of these powers to regulate prices in the mobile telecommunications and piped gas industries. Since 1999, the South African competition law authorities have focused on the reactive or ex post exercise of their statutory powers in terms of competition legislation, in order to detect and prosecute anti-competitive behaviour. This includes industries regulated by another sector regulator such as in the electronic communications sector (ICASA) and in the piped gas sector (NERSA). Several complaints against dominant suppliers in these industries have been successfully prosecuted in terms of the Competition Act, Act No 89 of 1998 (Competition Act). There have been far fewer efforts by the sector regulators to proactively exercise their ex ante regulatory powers in order to create a market structure and conditions that facilitate competition in the sectors that they regulate. In this article, we examine the recent exercise of powers by ICASA and NERSA in the mobile and piped gas industries. We conclude that the provisions of the ECA have facilitated (i) the identification and analysis of relevant markets lacking in adequate competition and (ii) the promulgation of regulation that is needed to develop a more competitive environment in due course. However, ICASA’s process in exercising its statutory powers has been slow and has suffered from various deficiencies. On the other hand, the analysis indicates that the legislation governing NERSA’s ex ante powers, and the way in which NERSA has enforced that legislation, has led to counter-productive regulation, which has hindered competition in the sector. Accordingly amendments to the Gas Act are required. Amendments effected to the ECA retain guidance to the regulator on how to conduct a market review, but the regulator should exercise these powers more often.
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    Economic Regulation of the Telecommunications Sector in South Africa: 2009-2014
    (LINK Centre, University of the Witwatersrand (Wits), Johannesburg, 2015-12-15) Hawthorne, Ryan
    South Africa’s electronic communications sector regulator, the Independent Communications Authority of South Africa (ICASA), has a mixed track record in carrying out its mandate. ICASA is part of a regulatory system for the telecommunications sector, that may be characterised as dysfunctional for the following reason: ICASA is not sufficiently independent from government. While regulated entities are generally partially state owned, this does create a conflict of interest for government. Nonetheless, ICASA has had some successes, where the interests of state-owned enterprises coincide with those of consumers. Its interventions in markets for voice services during the course of Telkom Mobile’s entry into the market, for example, have resulted in retail voice price reductions of more than 30%. Now that problems relating to voice services markets have largely been resolved through the call termination rate intervention, ICASA needs to shift its focus to markets for broadband services in order to ensure that South Africa becomes more competitive relative to its peers through unbundling the local loop and assigning spectrum for broadband. In order to achieve this, Telkom needs to be fully privatised in order to reduce government pressure to delay local loop unbundling (LLU) and Telkom’s wholesale and retail fixed-line operations should be functionally separated. ICASA needs to be further insulated from political interference and be properly resourced through industry levies and fees. Furthermore, a single appellate body for economic regulators ought to be established in order to improve accountability of the regulators and improve outcomes in the sector.
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    Regulatory Effectiveness: Stakeholder Perceptions of Namibia’s Communications Regulatory Framework
    (LINK Centre, University of the Witwatersrand (Wits), Johannesburg, 2015-12-15) Shanapinda, Stanley
    Communications regulatory frameworks are established to achieve myriad regulatory objectives. These may include affordable pricing, consumer welfare and competition. A regulatory framework is therefore endowed with regulatory governance measures and regulatory incentives to enable it to achieve these purposes. In applying these measures and incentives, the framework becomes effective, or ineffective, depending on whether the regulatory purpose is met. The purpose of this qualitative exploratory study was to assess the perceptions of the stakeholders, as active participants in the evolution of the framework, regarding the effectiveness of the types of measures and incentives implemented within the Namibian institutional context. Perception studies can be valuable because they offer insight on how the policies, laws and regulations that are implemented are viewed by the stakeholders for whom they are designed and implemented. While these are not the only inputs, knowledge of stakeholder views informs the future redesign of these measures and incentives to make the regulatory framework increasingly more effective. One of the main findings of the research was that the perceived conflict of interests between the ICT policy role of the Ministry of ICT and its shareholder role over Telecom Namibia negatively impacts competition. Its policy support for the dominant role of Telecom Namibia is in conflict with the regulatory purpose of encouraging private investment. The conclusion was that this regulatory governance design measure conflicts with the regulatory framework and requires legislative amendment and a re-design of the framework in an effort to improve competitiveness in Namibia’s electronic communications market.
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