Cwele asks court to block spectrum auction

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 10 Aug 2016
Minister Siyabonga Cwele asked the High Court to interdict, review and set aside ICASA's spectrum licensing process.
Minister Siyabonga Cwele asked the High Court to interdict, review and set aside ICASA's spectrum licensing process.

The minister of the Department of Telecommunications and Postal Services (DTPS), Siyabonga Cwele, has filed papers in the Pretoria High Court in an attempt to stop the Independent Communications Authority of South Africa's (ICASA's) plans to hold a spectrum auction for telecoms operators.

On Monday, the minister filed the motion to "interdict and thereafter review and set aside the purported licensing process initiated by [ICASA]", according to a copy of the affidavit of acting DTPS director general, Sipho Mjwara, filed on behalf of the minister, that ITWeb has in its possession.

The court papers list the regulator's acting chairperson and ICASA as the first two respondents, along with Vodacom, MTN, Neotel, Telkom and Cell C as respondents three to seven.

On 15 July, ICASA issued a public invitation to apply (ITA) for licences for in-demand spectrum in the 700MHz, 800MHz and 2.6GHz bands, to be used to provide mobile broadband wireless access services in SA. The DTPS then announced its plans to take on ICASA, saying the ITA "was issued without consultation and prior notification to government as the policy-maker".

This week's court affidavit from the DTPS states "ICASA takes the view that it is entitled to proceed with the spectrum licensing process, well before a comprehensive national policy review initiated by the minister at the behest and direction of the highest national policy-making executive authority, the National Cabinet, has been finalised".

The DTPS maintains the spectrum auction cannot take place before the department has finalised its integrated ICT policy White Paper, which should outline clear government policy views on national frequency spectrum. The draft Integrated White Paper is sitting before national Cabinet for consideration and adoption after being submitted by the minister on 2 March.

"Upon adoption of the White Paper, a comprehensive national policy on all aspects of the ICT sector, including fixed and mobile broadband services and radio frequency spectrum, and the orderly allocation thereof to all interested parties will be in place.

"The minister will be required to issue policy directions which ICASA will be required to consider in order to bring about orderly allocation of the national radio frequency spectrum, in its implementation of statutory licensing functions and duties," the DTPS says.

The court papers also point out "acts of unlawfulness and illegality" which the DTPS says require immediate intervention from the court "to prevent irreparable harm and prejudice not only to the formulation and implementation of the requisite national policy, but also to unsuspecting interested parties". This includes telecoms operators which it says may sustain "substantial financial exposure" if the court finds the process to be invalid.

ICASA previously told ITWeb it believed it had "followed the law as it currently applies in publishing the ITA" and that it would decide on a course of action once the papers were filed with the court.

Meanwhile, MTN SA CEO Mteto Nyati told journalists at a press conference after the company's interim results presentation last week that the telco hoped the DTPS would help the spectrum allocation process move forward.

"We continue to work with government and ICASA. I had a meeting with the deputy minister of telecommunications and in the discussions we said we really need to allow the process to move forward. We don't know how they will respond but our view is that - let's try and work together to move the ICASA process forward," Nyati said.

Telco concerns

Nyati believes the path ICASA has taken with the auction is the right direction and "is helping us and the country to move forward". However, he says MTN still has a number of concerns with the ITA, and had submitted a list of over 100 questions to ICASA over the proposed spectrum auction process. Public enquiries had to be made by 4 August and ICASA will then respond to these by 24 August.

"We need clarity in some areas. For example, we are talking about R3 billion as the price that is set, but we do not even know when the spectrum will become available ? so how do you value the spectrum when you don't know when it will be available?" Nyati asked.

He also said MTN is seeking clarity around BEE and whether the auction's BEE requirements will be measured in terms of the Department of Trade and Industry's codes of good practice or purely based on equity. Another concern was the stipulations for LTE coverage and speeds.

The ITA said licensees would be required to provide data services across the country "with an average uplink of 15Mbps and the downlink user experience throughput of at least 30Mbps to 100% of the population of South Africa by 2020".

This stipulation was also of concern to Vodacom CEO Shameel Joosub, who told ITWeb the ITA "includes some tough asks in terms of speeds that need to be attained across SA by 2020".

Cell C also had concerns over the minimum bidding price of R3 billion being too high "especially as the spectrum lots are not equally valuable". Cell C chief legal officer Graham Mackinnon also believed the ITA's time-table seems quite rushed.

The ITA was published in the Government Gazette on 15 July and the original timetable shows interested parties had to make enquiries by 4 August and apply for four possible spectrum lots between 09h00 and 15h00 on 3 October. A list of the applicants will be published on 21 October.

Qualified bidders will be announced by 30 November. The auction process has been estimated to take place from 17 January 2017, with the results of successful bidders likely announced on 31 January. The licences would ideally be issued by the end of March 2017.

How much this timetable will be affected by the court action and enquiries from the public is unclear at this point.