Financial

Cwele vs ICASA standoff cost R1.7m

Minister of telecommunications and postal services Siyabonga Cwele [Photo source: ITU]
Minister of telecommunications and postal services Siyabonga Cwele [Photo source: ITU]

The telecommunications and postal services department spent R1.7 million in legal fees for the impasse between minister Siyabonga Cwele and the Independent Communications Authority of SA (ICASA).

This information came to light when Cwele replied to a Parliamentary question posed by Marian Shinn, Democratic Alliance MP and telecoms and postal services shadow minister.

In his reply, Cwele said his department informed him the amount paid was over the duration of the spectrum auction tug-of-war with ICASA. "A total amount of R1 703 628.36 had been paid to date towards legal fees."

Breakdown of legal fees since 2016

When ICASA invited telecoms operators to apply for radio frequency spectrum in the 700MHz, 800MHz and 2.6GHz bands on 15 July 2016, it seemed, after years of asking, South African mobile operators would finally get additional spectrum.

At the time, the telecoms regulator said the applications for spectrum would help operators provide mobile broadband wireless access services for urban and rural areas.

"The main aim of licensing 700MHz, 800MHz and 2 600MHz is to ensure nationwide broadband access for all citizens by 2020, in line with the National Development Plan and SA Connect policy."

However, the move was slammed by Cwele as it was apparently "issued without consultation and prior notification to government as the policymaker".

The minister also flagged the fact that there was no policy direction on spectrum at the time, as government's integrated ICT Policy White Paper was yet to be finalised.

The DTPS subsequently announced the minister was planning legal action to review the actions of ICASA. According to the department, the minister's decision to take legal action follows two meetings held with the regulator on 15 and 19 July 2016 "that failed to resolve the matter amicably".

In addition, Cwele said a request from government, in September 2015, for ICASA to halt its process "was ignored". This was after the regulator first published an 'information memorandum' that provided guidance to prospective applicants that wished to apply for licensing of the three bands of spectrum to be used for next-generation mobile services.

Although ICASA pointed out it believed it had "followed the law as it currently applies in publishing the ITA [invitation to apply]", in August 2016, the minister filed papers in the Pretoria High Court in an attempt to stop the regulator's plans to hold a spectrum auction for telecoms operators.

In September 2016, the North Gauteng High Court in Pretoria ruled that ICASA is prevented from implementing the licensing steps and processes referred to in an ITA issued in July.

The court judgment also said ICASA is interdicted from accepting any bids for the ITA and from taking any steps to advance the ITA, "pending an application by Cell C to launch review proceedings in respect [of] the invitation to apply, provided the review application is served by 14 October 2016".

Following the ruling, ICASA announced it accepts the high court judgment, subsequently delaying the spectrum auction indefinitely in February 2017.

This year, Cwele's department and the ICASA council agreed to settle the court challenge involving the ITA, which was issued on 15 July 2016 for the allocation of high demand spectrum.

The move followed president Cyril Ramaphosa's September pronouncement that government will initiate the process to license high-demand radio spectrum within the next few weeks. The licensing of the radio frequency spectrum is one of the reforms government proposes to ignite economic activity, restore investor confidence, prevent further job losses and create new jobs.

In a statement, Cwele and ICASA said: "The agreement is a product of consultations between the minister, the department and ICASA. As a result of the settlement, the minister commenced consultations with ICASA on a draft policy direction for the licensing of high-demand spectrum and intends issuing the draft policy direction for public comment."

Last month, ICASA confirmed plans to license high-demand radio frequency spectrum by the end of March 2019.

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