Concerns over ICASA’s timing of B-BBEE requirements

By on September 21, 2021 0

Some Internet Service Providers (ISPs) are concerned about the timing of the South African Independent Communications Authority’s (ICASA) interim transformation requirements.

They suggest that the April 2022 deadline does not give them enough time to establish effective agreements.

According to the industry body, the Wireless Access Providers Association (WAPA), a non-profit organization whose goal is to promote the growth of the wireless industry by facilitating self-regulation, promoting best practices and educating members and the market on new wireless technologies and business models.

WAPA is positioned as an interface between the regulator, network operators, service providers and consumers.

In a statement, WAPA says ISPs are required to have 30% of Black Economic Empowerment Shares (B-BBEE) held by historically disadvantaged groups (HDGs), including black South Africans, women, people with disabilities and young people.

“It’s not new; it was introduced in 2008 when the VANS [value-added network service] licenses have been converted to ECS [electronic communications service] and ECNS [electronic communications network service] licenses ”, explains Paul Colmer, exco member of WAPA.

“However, other organizations have raised what we believe to be valid concerns, not with the ultimate goals, but rather with the timeline around the intermediate goals.”

According to WAPA, ICASA has been approached on the matter. However, the regulator had not responded to questions from ITWeb at the time of publication.

In a Government Gazette in March, ICASA states that the purpose of these regulations is to promote equity investment by HDGs and to promote B-BBEE.

To achieve this, these regulations will facilitate diversity and transformation in the ICT sector by promoting B-BBEE, with particular attention to the needs of women, opportunities for young people and challenges for people with disabilities.

It notes that the regulations also prescribe the application of the HDG fairness requirement and provide for how compliance with the HDG fairness requirement, black fairness requirement and contributor status level B -BBEE will be verified, monitored and enforced, says ICASA.

He adds that a person who submits false, misleading or inaccurate information to the authority is guilty of an offense and is liable, on conviction, to a fine of at least 50,000 rand but not exceeding 5 million rand.

“Companies that currently have no certification, for example, might struggle to reach level seven by April 2022,” says Colmer. “It is also important to note that this is a separate issue from the new desire to support 30% ownership by HDG, which does not apply to class licensees, but only to licensees. individual. “

WAPA explains that individual licensees are typically larger companies that operate province-wide or nationwide.

He notes that there are two types of licenses ECS and ECNS. “ECNS is essentially the physical network and ECS is the services provided over the network. Individual ECNS licenses allow the operation of a network on a national or provincial scale. The individual ECNS is the same for a district or a local municipality, ”explains the NPO.

He added that ECS is slightly different in that ECS license holders can assign numbers from the national numbering plan. Holders of an ECS license cannot, he notes.

WAPA points out that the national numbering plan is essentially a set of regulations regarding how phone numbers are assigned, such as 011 landlines and 08x numbers commonly used by mobile operators.

“What the government has said, in essence, is that the transformation and shareholding regulations in place since 2008 will apply for the largest operators, ECS and ECNS licensees, from April. 2022, “said Colmer.

“HDG does not apply to class license holders. They must be level four, which only apply to renewal, modification or transfer, and are automatically granted to licensees with annual turnover of less than R10 million.

He says that individual WAPA licensed members have expressed concerns about the timing and that he is closely following a request made by the Association of Internet Service Providers (ISPA) to ICASA.

Paul Colmer, exco member of WAPA.

Paul Colmer, exco member of WAPA.

ISPA recently asked ICASA to reconsider the extent to which it micromanages the affairs of licensees and industry.

The industry body said it recognizes that ICASA has an important role to play in transforming the ICT sector through its regulations mandating transformation through ownership and enforcement of the ICT sector code. TIC.

“However, when it comes to day-to-day business transactions within the industry, we believe the regulator is over-regulating by inserting and delaying trade agreements involving the transfer of a license or the transfer of control over a license.” , said Dominic Cull, ISPA. regulatory advisor.

Cull explained that transfers of ownership or control of licenses take up to 180 working days for ICASA to process an applicant and cost around R70,000 per license.

ISPA has received comments from its members that include examples of delays of more than a year in obtaining ICASA approval for changes to internal shareholder agreements, the industry body said. .

“In practice, the parties can come to a trade deal but then have to wait up to 180 working days to get regulatory approval. This clearly goes against reasonable business practices and is an obstacle to the growth and transformation of the sector by discouraging investment and entry into the sector.

According to ISPA, this type of micromanagement may have been appropriate when the number of licensees was limited, but it is no longer necessary now that there are more than 500 individual licensees authorized to deploy networks and providing services across South Africa.