ex Africa semper aliquid novi

The last two posts on the recent Altech rulings referred to “network” licences. I used the phrase to avoid the cumbersome Electronic Communications Network Service licence of the Electronic Communications Act, the legislation which governs telecommunications (and broadcasting), which has another category of licence, an Electronic Communication Service licence.

Michael’s comment on the most recent post asked what entitlements a ‘network’ licence would give to Altech anyway. Does Altech have the same rights as Telkom and Neotel?

The Electronic Communications Act describes a an electronic network service as

“a service whereby a
person makes available an electronic communications network, whether by sale,
lease or otherwise—
(a) for that person’s own use for the provision of an electronic communications
service or broadcasting service;
(b) to another person for that other person’s use in the provision of an electronic
communications service or broadcasting service; or
(c) for resale to an electronic communications service licensee, broadcasting
service licensee or any other service contemplated by this Act,”

Holders of network licences can build and run their own networks; cables, switches etc. Altech is entitled to build their own network, just like Telkom, Neotel etc.

But building a network means using (constructing the means so that one can) either solid conductors like fibre, or sending radio signals. Sending radio signals requires a frequency spectrum licence, or a frequency spectrum exemption (like the exemption for wifi). Spectrum is limited so the regulator, in this case ICASA must try to optimise its use, ensuring that a wide variety of uses and users can use the spectrum. A spectrum licence is required in addition to any network licence.

Building a large scale fibre network requires laying cable across land owned by other people. Telkom was able to do this under previous legislation which gave it rights of way to lay cable. Eskom and Transnet also have rights of way next to rail lines and power cables.Without rights of way a network operator would have to negotiate with every landowner across which cables are laid.

In urban areas municipalities control rights of way alongside roads. Even though the municipality does not own the land designated as sidewalk (what many South Africans refer to as the pavement) it has certain powers over that land.Section 22 of the Electronic Communications Act gives network licensees the rights to construct their networks on other people’s land, but this subject to the law of the Republic. Section 21 gives the Minister the power to set down guidelines for the rapid deployment of networks. Outside of those guidelines its not clear whether a network licensee can simply build its network across others land.

Network licencees can apply for frequency spectrum licences and cannegociate with municipalities for rights of way, both of these are constraints which arise from technology, and the application of technology unlike the Minster of Communications constraints intended to limit the number of players in the market. These constraints provide technology related barriers to entry to the market, but managing them does not necesarily require imposing arbitrary limits on the number of entrants to a market.

The Electronic Communications Act also suggests that there can be class licences for network licences, and provincial or national licences. Will ICASA use these to try to limit the kinds of licences given to Altech and other former VANS licencees?

The judgement deals with leave to appeal.

The question which the judge had to address was whether another court might reasonably come to a different decision to the decision already reached by this judge.

The argument advanced on behalf of the Minister was that the Ministerial Policy Directions discussed in the previous judgement, could be read as not dealing with licence conversion but dealing with a different process.

Its a strange argument because it would place a construction on that Directive entirely at odds with what the Minister herself claims in the press. The Minister is adamant that she did not intend any person with a VANS licence to be able to obtain a network licence. She therefore issued the directive to ensure that only some VANS licencees could get network licences.

The court previously ruled that the Minister did not have the power to do this because the Electronic Communications Act did not give her that power, in requires ICASA to convert licences “on no less favourable terms”.

In order to appeal the Minister’s legal representative has to argue that the court was wrong to regard the relevant parts of the directive as instructing ICASA what to do about conversion. Instead, it was argued that another court, such as an appeal court might find that that part of the Directive was  not an instruction to ICASA on conversion but an instruction about a new process, of inviting and issueing network licences.

If this were so it would mean that ICASA would have to decide for itself whether VANS licensees are entitled to network licences, the Minister’s views would be (legally) irrelevant. Thats a strange position to take when the Minister is adamant that VANS licensess are not entitled to network licences, and that permitting them licences would undo the ‘managed liberalisation process’ which has apparently been unfolding in South Africa over the last thirteen years.

The court found that argument unconvincing and that there is no reasonable prospect of another court finding that that part of the Directives were not intended to deal with the conversion of licences. Strangely this was accompanied by an argument that because the disputed licence contained on a VANS, a restriction which the court disagreed with, that there was therefore a chance that another court might find that the licence restricted the VANS. The judge found just because a licence contains something contrary to a statute, and therefore outside the powers of the licensor doesn’t give rise to a reason to appeal.

Another argument was that the court should have declared the May 2005 VANS regulations unlawful. The previous judgement had considered whether the regulations had anything to say that was relevant to the dispute and found that they didn’t. The regulations were irrelevant and so the judge in the second judgement didn’t see any need to make a ruling on their lawfulness.

The application for leave to appeal was dismissed. ICASA is therefore obliged to convert VANS licences to network licences (I-ECNS licences), at least for those who apply.

The Minister could apply to the Supreme Court of Appeal for leave to appeal from that court.There would then be at least two more court cases, a second battle over leave to appeal, and then the appeal itself. Both of these would take some time.

But in the meantime ICASA is obliged to get on with the conversion process.