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Sep 27, 2001

Telecoms Bill ‘out of step’ with industry

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EN Online Telecommunications Release/reuters The draft Telecommunications Amendment Bill, which is to be the subject of public hearings in Parliament next week, has been universally condemned by telecommunications bodies, information technology organisations and business representatives.

They claim that the Bill ignores the consultative process which preceded it and that it is out of step with industry and South African needs. Drafting of the Amendment Bill comes at a crucial time for the long-term development of the telecommunications industry, especially in the light of Telkom’s upcoming IPO. The proposed legislation, industry representatives said, had surprised most observers and has been formulated in stark contrast to the newly implemented process of liberalisation.

Telkom CE Sizwe Nxasana told Reuters that failure to improve the draft before it is adopted would affect anticipated telecoms investments, estimated by industry analysts at up to R32-billion next year.

South Africa is due next year to list about 20% of Telkom, license a second national fixed-line operator and sell most of its 24% stake in mobile group M-Cell. Nxasana said that the final Act should be constitutional in all its respects, and that it should continue to enhance South Africa's institutions of democracy by establishing clear roles and relationships, clear functions and facilities-based aspects of the new competitive phase.

He added that the Act must further be incisive in its definitions to provide the largest possible measure of certainty about concepts and intentions, not only for legal drafting and academic purposes, but because the industry, the regulator and the justice and arbitration system all depend on the sharpness of those definitions to succeed in their endeavours.

“Finally, the Act must designate and grant clear rights and entitlements but similarly prescribe clear prohibitions and deterrents so that all stakeholders have the least doubt possible about their roles and rights in the market place of the new and liberalising phase,” he said.

Telkom is already 30% owned by SBC Communications of the US and Telekom Malaysia.

In addition, South African Value Added Network Service Association chairperson Mike van den Bergh expressed disappointment that the Independent Communications Authority of South Africa’s recommendations regarding VANS and VPNs had been totally ignored by the Bill. He said this showed contempt for the industry regulator and raised serious questions about the intent of the drafting of the Bill. This view is also shared by the Internet Service Providers Association co-chairperson Edwin Thompson, who said,”It is extremely disappointing that the Bill ignores a number of the rulings by Icasa”.

He added that the uncertainty, confusion and litigation that has enveloped the industry since its inception is bound to continue to the detriment of investors and all South African users of Internet and other services. “This uncertainty will continue to frustrate innovation and investment in the roll-out of new services,” he said.

Information Technology Association president Teryl Schroenn also noted that it is imperative that government becomes more responsive to the ongoing calls from the South African information communication technology industry for legislation that will enable, rather than inhibit the development of the national economy. “The legislation, as proposed, does not adequately answer this call,” said Schroenn.

President of Information Industry South Africa president Adrian Schofield commented that implementation of the Bill would result in a Telkom monopoly over the critical computer and telecommunications equipment and services industry. This, he said, “would cause immediate and major harm to the South African economy, and would deny South African consumers and businesses the undisputed benefits of competition in the provision of this equipment by raising prices, restricting consumer choice, and stifling innovation”.

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