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Calls for new regulator

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 23 Oct 2014
Government is pondering consolidating regulators, which is an opportunity to remedy the dilemma of ICASA's place in the DOC.
Government is pondering consolidating regulators, which is an opportunity to remedy the dilemma of ICASA's place in the DOC.

As government mulls consolidation of regulators in the infrastructure arena, calls are being made to move the bulk of the Independent Communications Authority of SA's (ICASA's) functions to a new economic infrastructure regulator.

This would result in the new regulator having oversight of vital functions that ICASA currently deals with - such as spectrum allocation and broadband. It would also solve industry's anguish over ICASA being placed within the Department of Communications (DOC), instead of the recently-formed Department of Telecommunications and Postal Services (DTPS).

When president Jacob Zuma split the former DOC into two in May, he transferred the bulk of its previous work dealing with infrastructure, such as the country's broadband plan SA Connect, to the DTPS. However, much to the industry's dismay, he left the enabling body - ICASA - within the DOC.

Regulatory consolidation

A government official close to the DTPS says there is a need for an economic regulator within the DTPS that would preside over infrastructural aspects such as much-awaited spectrum allocation, competition in the telecoms sector, and broadband. This would leave ICASA to deal with issues around the state broadcaster, which also falls under the new DOC.

Yesterday, National Treasury noted it is expanding SA's energy, transport, water and communications infrastructure, which will cost the country R230 billion in the next three years. It added, in the policy statement, that funds had been set aside for economic infrastructure and network regulation.

This is being done in accordance with the Medium-Term Strategic Framework (MTSF) - approved in July - which seeks to place "infrastructure at the forefront of government's agenda to transform the economy and stimulate economic growth and job creation".

Outcome six of the MTSF says, in the immediate future, a "far-reaching" review of current infrastructure regulators will be carried out to clarify roles, strengthen accountability, update legislation and regulations, and reform institutional design. In addition, government will explore the possibility of further consolidation of regulators as "the role and effectiveness of sector regulators needs to be reviewed".

Mixed views

Dominic Cull, owner of Ellipsis Regulatory Solutions, says an overarching economic infrastructure regulator, which would incorporate ICASA along with the National Energy Regulator of South Africa, makes sense "on the face of it" as long as problems are not just transferred sideways. He explains there are many synergies between the sectors and it would be helpful to place well-skilled lawyers, engineers and economists under one umbrella.

"Certainly ICASA and economic regulation is not a success story." Cull notes the regulator does do much "under the radar" although it does appear to be a "failed institution".

However, ICASA spokesman Paseka Maleka says the regulator is living up to its mandate, and it is up to government to decide what to do with regulators.

In contrast to Cull and the insider, Ovum analyst Richard Hurst says "better the devil you know" and a new regulator would "muddy the water further". He adds it makes sense to keep telecoms separate, as is the case internationally, because it has different "nuances" than other areas, such as power.

Denis Smit, MD of BMI-TechKnowledge, adds the concept of an economic regulator is unlikely to get off the ground because there are too many moving parts, which would involve a legislative and Parliamentary process across several ministries. "It's an academic concept. I think this is just a red herring."

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