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Telecommunications monopoly in South Africa—some human rights aspects and options for future regulation

Published online by Cambridge University Press:  28 July 2009

Myron Zlotnick
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Extract

In the Internet ruling the Authority did not come to the assistance of the monopoly. It is submitted that the vested interests of the ISPs outweighed any protection that Telkom could claim and it suited the Authority then to have reference to constitutional rights and universal sendee policies to justify its ruling. The Authority's perception of the market-place may have influenced the decision. In the call back ruling, however, the Authority came to the assistance of the monopoly. This ruling was based in part on a desire to protect Telkom's revenue. But it seems because the call back operators were not afforded an opportunity to present a case to protect their interests, the Authority assumed Telkom's interests to be more important. This notwithstanding, in both rulings the Authority opted for a value-laden rather than a technologically informed decision. While this may be commendable in terms of achieving the overall goals of the sector, it does lead to inconsistency. As I have alluded to above, this can perhaps be overcome if the Authority develops a coherent policy framework for decision making, i.e. the White Paper and the Telecommunications Act afford the Authority a number of policy beacons by which they may be guided and it is inappropriate to follow one (the Telkom monopoly) at the expense of others.

Type
Research Article
Information
Journal of African Law , Volume 43 , Issue 2 , Autumn 1999 , pp. 214 - 233
Copyright
Copyright © School of Oriental and African Studies 1999

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References

1 E. Krasnow and J. Goodman, “The ‘public interest’ standard: The search for the Holy Grail”, at http://www.law.indiana.edu/fclj/pubs/v50/no3/v50no3.html at 13.

2 Act No. 108 of 1996.

3 For a detailed constitutional analysis of the impact of the Bill of Rights contained in the final constitution of 1996 see: Driver, G., “The application of competition law to the South African telecommunications industry”, LLM unpublished paper, University of the Witwatersrand, 1998.Google Scholar

4 Act No. 44 of 1958.

5 See s. 2(1) of the Post Office Act.

6 See s. 4(1 )(b) of the Post Office Act.

7 For an overview of the political and economic forces that prompted the “commercialization” of telecommunications services see R. Horwitz, “South African telecommunications: History and prospects”, at http://www.ctr.columbia.edu:80/vii/papers/horwitz2.htm (Horwitz I) and see R. Horwitz, “Telecommunications policy in the new South Africa: Participatory politics and sectoral reform”, (1997) 23(2) Communicatio at http://www.unisa.ac.za/dept/press/comca/222/horwitz.html (Horwitz II).

8 S. 7(2) of the Post Office Act provided that Telkom: “… shall … have the exclusive power to conduct the telecommunication service …”. See also s. 78(1) and 78(2)(a) and (b).

9 See s. 78(5) and s. 78(6) of the Post Office Act.

10 See s. 90A(2) of the Post Office Act. See also Government Gazette No. 13,747, Notice No. R324 of 31 January, 1992.

11 See Krattenmaker, T., “The Telecommunications Act of 1996”, 1996 (49) Federal Communications Law Journal at http://www.law.indiana.edu/fclj/pubs/v49/nol/kratten.html, at 1–2. For a useful overview of the variety of models of regulation of telecommunications that can be applied seeGoogle ScholarMelody, W., “Policy objectives and models of regulations”, in Melody, W. (ed.), Telecom Reform—Principles, Policies and Regulatory Practices, Lyngby, 1997, at 11–27 andGoogle ScholarPisciotta, A., “Global trends in privatisation and liberalisation” in Melody at 337–353. See also Horwitz I above at 23.Google Scholar

12 See Horwitz I above at 6.

13 Telecommunications Act of 1996, Pub. L. No. 104–104, 110 Stat. 56 (47 U.S.C.). See Krattenmaker, above, for an overview of the forces behind the passing of the Telecommunications Act.

14 Commission Directive of 13 March, 1996, amending Commission Directive 90/388/EEC, (With Regard to the Implementation of Full Competition in Telecommunications Markets) at 96/19/EC, OJ L 74/13, 22 March, 1996. See also the Commission Directive 90/388/EEC (On Competition in the Markets for Telecommunications Services) at http://www.ispo.cec.be/infosoc/ legreg/docs/90388.html.

15 See http://www.wto.org. For the detailed provisions of the GATS agreement and the Annex on Telecommunications see: http://www.wto.org/wto/services/services.htm and the hypertext links on that page. The specific commitment of South Africa is at http://www.wto.org/wto/press/bt-31ist.htm.

16 For a review of the statistics of teledensity in South Africa sec “A telecommunications universal service policy framework for defining categories of needy people on South Africa”, DRA Development, Durban, 1997.

17 See Conrad, K., “Media mergers: First step in a new shift of antitrust analysis”, (1996) 49 Federal Communications Law Journal at http://www.indiana.edu/fclj/pubs/v49/no3/conrad.html at 7; and see “The Telecommunications Act of 1996 and the changing communications landscape” at http://www.benton.org/Library/Landscape/landscape.html at 1. See also Horwitz I above at 11 and 16–17 and at 22.Google Scholar

18 Government Gazette No. 16,995, Notice No. 291 of 13 March, 1996, hereafter referred to as the White Paper. For an overview of the history of the consultative process leading up to the drafting of the White Paper, see Horwitz I above at 21–22.

19 See the White Paper at 17–20.

20 See Horwitz I above at 21–23; Horwitz II above at 13–16 and at 18 and see the White Paper at 12.

21 For example see the White Paper para. 2.6 at 12 and see Horwitz I above at 24.

22 See the White Paper para. 2.6 at 23.

23 See Government Gazette No. 17,578, Notice No. R68 of 15 November, 1996; Government Gazette No. 17,817, Notice No. R20 of 21 February, 1997; and Government Gazette No. 18,074, Notice No. R38 of 13 June, 1997.

24 Abbreviated to SATRA in the White Paper para. 5.16 at 52, but referred to in this paper as “the Authority”, which is the terminology adopted in s. 1(i) of the Telecommunications Act.

25 See s. 5(1) as read with ss. 32(1) and 35 of the Telecommunications Act.

26 See Melody, W., “On the meaning and importance of ‘independence’ in telecom reform”, (1996) 21(3) Telecommunication Policy, at 195.CrossRefGoogle Scholar

27 See ss. 36(1 )(a), 36(7)(a), 36(7)(b), 36(7)(c) and 36(9)(a) of the Telecommunications Act.

28 The statutory basis for the licence conditions is found in ss. 36(1)(a), 40(1)(a), and 30(3)(a) of the Telecommunications Act. See also s. 36(3) of the Telecommunications Act as read with ss. 38(1) and 39(1).

29 See clause A2 of Schedule A of the Telkom PSTS licence as read with clause 3.2 of the Telkom PSTS licence. See also clauses A3, A4 and A5 of Schedule A to the Telkom PSTS licence.

30 See s. 36(4) of the Telecommunications Act.

31 See s. 36(5).

32 See the Telkom PSTS licence at clause 4.1.1(a) (basic telephony); clause 4.1.1(b) and 4.2 (public pay telephone services); clause 4.1.1(c) and 4.3 (public emergency call services).

33 See, for example, the exception to clause 4.1.1 of the Telkom PSTS licence and see clause 4.1.3 of the Telkom PSTS licence.

34 See s. 40(2) and 41(2)(a) of the Telecommunications Act as read with clause 3.l(f) and (g) of the Telkom PSTS licence. See also s. 40(2) (no re-sale of VANS facilities) and s. 41(5) (no re-sale of private network facilities) of the Telecommunications Act.

35 S. 40(3) of the Telecommunications Act.

36 Transnet and Eskom are the statutory bodies responsible for the administration and management of transport and electricity utilities respectively. See the Legal Succession to the South African Transport Service Act No. 9 of 1989 and the Eskom Act No. 40 of 1987. See s. 41(3)(a) and (b) of the Telecommunications Act.

37 See s. 44(1)(c) as read with ss. 43(1)(c), (d), (e) and 43(4) to (8) of the Telecommunications Act.

38 See s. 38(2) and 39(2) of the Telecommunications Act.

39 See s. 45(1) and (2) of the Telecommunications Act and see clauses 7.1 and 7.2 of the Telkom PSTS licence.

40 See clauses 8 and 9 of the Telkom PSTS licence.

41 See clause 8.4 of the Telkom PSTS licence.

42 See the Telecommunications Act at s. 36(1)(d) (new entrants may not be disadvantaged); s. 53 (no undue discrimination or preferences); s. 44(2) as read with s. 43(1)(c), (d) and (e) (obligatory leasing of facilities); s. 44(7) (obligatory interconnection). The Authority has launched a process to determine the guidelines for regulating interconnection and facilities sharing agreements in terms of sections 43 and 44 of the Telecommunications Act. These guidelines will bind Telkom. See http://www.satra.org.za/satindex.html, http://www.satra.org.za/saseca.html.

43 See s. 3(l)(d) of the Competition Act No. 89 of 1998.

44 In South Africa the “right to telecommunications services” does not appear to be normally associated within the ambit of socio-economic human rights. See de Villiers, “Social and economic rights”, in van Wyk, D. et al. , Rights and Constitutionalism—the New South African Legal Order, Cape Town, 1994, 500 etseq.Google Scholar

45 See s. 26(1). The language used in the Zimbabwe legislation is similar to that used in clauses 2.1 and 3.1 of the Telkom PSTS licence as well as the language used in s. 78(1) of the South African Post Office Act.

46 See Posts and Telecommunications Corporation v. Retrofit (Pat) Limited 1994(1) ZLR 630Google Scholar (ZSC).

47 See Retrofit (Pvt) Limited v. Posts and Telecommunications Corporation (Attorney-General of Zimbabwe Intervening) 1996(1) SA 847 (ZSC) (referred to hereafter as Retrofit I).Google ScholarRetrofit (Pvt) Limited v. Minister of Information Posts and Telecommunications 1996(3) BCLR 394Google Scholar (ZS) (referred to hereafter as Retrofit II), and TS Masiyiwa Holdings (Pvt) Limited and another v. Minister of Information Posts and Telecommunications 1997(2) BCLR 275 (ZS) (referred to hereafter as Masiyiwa).Google Scholar

48 The onus was on the applicant, see Retrofit I at 862 G-H.

49 See for example Marcus, G. and Spitz, D., “Freedom of expression”, in Chaskalson, M. et al. , Constitutional Law of South Africa. Cape Town, 1996, at 20–21Google Scholar and 20–24–20–28. L. Johannesen, L., “Freedom of expression and information in the new South African Constitution and compatibility with international standards”, (1994) 10 South African Journal of Human Rights 216 at 218–219CrossRefGoogle Scholar and Marcus, G., “Freedom of expression under the Constitution”, (1994) 10 South African Journal of Human Rights 140 at 140–143.CrossRefGoogle Scholar

50 See Retrofit I above at 856H-J quoting from Cardozo, J., in Palko v. Connecticut 302 US 319 (1937) at 327.Google Scholar

51 See Retrofit I above at 857D, 857G-H, 857J, and 858B.

52 See Retrofit I above at 858D-E.

53 See Retrofit I above at 858E-F.

54 See Retrofit I above at 860B-D: Red Lion Broadcasting Co. Inc. and Others v. FCC (No. 2) 395 US 367 (1969),Google ScholarCity of Los Angeles and Department of Water and Power v. Preferred Communications Inc. 476 US 488 (1986)Google Scholar (of particular relevance within the context of Telkom making facilities available to persons who request them). Metro Broadcasting Inc. v. FCC 497 US 445 (1990),Google ScholarBelize Broadcasting Authority v. Courtenay and Hoare [1988] LRC (Const) 276Google Scholar (Belize CA), and NTN Pty Ltd. v. The State [1988] LRC (Const) 333.Google Scholar It is not intended to analyse whether or not these cases support the conclusion that Gubbay, C J., reached, save to state that the decision in Red Lion, for example, has not always been seen as advancing freedom of speech claims, see Turner Broadcasting System Inc. v. FCC 512 US (1994). It should be noted that the Red Lion case supports the conclusion that free speech has as much to do with positive expression as it docs with the right to receive information see Red Lion at 390Google Scholar

55 See Retrofit I above at 864E, 865G and 865I-866B.

56 See Retrofit I above at 861H-J.

57 See Driver above at 10.

58 See Retrofit I above at 853H J. Gubbay, C.J., also held that “the wireline service is inadequate to meet the present communication needs of the population” (at 852E); “the extent of the shortcomings in the public switched telephone network is a source of major concern among subscribers” (at 852H); the World Bank reported that: “the quality of service is poor” (at 8521); “the completion rate of telephone calls is unsatisfactory … below 30%” (at 852G); the Corporation's own report stated that: “[the network] is characterized by lack of connectable capacity and subscriber distribution … [which] has led to serious network congestion which inhibits traffic flow” (at 853B-C); “there is a demand for mobile cellular telephone services and that demand is increasing” (at 853F).

59 See s. 26(1) of the Postal and Telecommunications Services Act.

60 See Retrofit I above at 400–401 A.

61 See Woolman, S., “Limitations”, in Chaskalson, , above, at 12–1 and following. See also Driver above at 9–11.Google Scholar

62 See Retrofit I above at 862I-863B.

63 For a detailed analysis of the constitutional jurisprudence in the case see Driver, above at 9–11.

64 A similar claim is made in South Africa in the White Paper at clause 2.6 as read with section 41(3)(a) of the Telecommunications Act. Also see the provisions of section 41(3)(a) of the South African Telecommunications Act that forbids Transnet and Eskom to duplicate the provision of services.

65 See Retrofit I above at 863E F. “The spur of competition should inspire greater efficiency and economy on its part. And the free market competitors who choose to come into the market, would do so at their own risk and expense” (at 863H I).

66 See Retrofit I above at 863J 864A.

67 See Retrofit I above at 864B.

68 Berkey Photo Inc's, above, US v. Aluminium Company of America 148 F 2d 416 (1945) at 427Google Scholar and US v. American Telephone and Telegraph Co. 552 F Supp 131 (1982).Google Scholar

69 See Retrofit I above at 865A-C.

70 Green, J., in US v. American Telephone and Telegraph above and quoted in Retrofit I at 864H-I.

71 See Retrofit I above at 865C-E. See the White Paper at para. 2.6.

72 See Retrofit I above at 865F-G.

73 See Retrofit I above at 8651 J.

74 See Retrofit II above at 397A-C.

75 See Retrofit II above at 397E- F.

76 See Retrofit II above at 398A-C.

77 See Retrofit II above at 398H-J.

78 See the NTN ease above.

79 See Retrofit II above at 399E-F.

80 See Retrofit II above at 400I-401 A.

81 SI 15A of 1996.

82 In Masiyiwa above.

83 See Masiyiwa above at 275F G.

84 See Masiyiwa above at 287E-288C.

85 Unreportcd, case No. HH 205–97, 31 December, 1997.

86 “Even one has the right to freedom of expression, which includes … (b) freedom to receive or impart information or ideas …”. For an indication of the scope of this right in South Africa, see Bogoshi's case above.

87 1998(11) BCLR 1608 (E) hereafter referred to as ran Rensburg.Google Scholar

88 It should be noted that this legislation has been amended: see the Postal Service Act No. 124 of 1998. See van Rensburg above at 1610H J

89 See van Rensburg above at 1613F-1616F.

90 See van Rensburg above at 1617A.

91 Section 22 of the Constitution provides: “Every citizen has the right to choose their trade, occupation or profession freely. The practice of an occupation, trade or profession may be regulated by law”. See Driver above at 11.

92 See van Rensburg above at 1618D E and 1618H.

93 S. 9 of the South African Constitution. See Driver above at 4.

94 See van Rensburg above at 1621B-D.

95 See van Rensburg above at 1621D-E and Driver above at 9.

96 See van Rensbutg above at 1622F-H.

97 See van Rensburg above at 1622A-G.

98 1996(3) SA 800 (TPD), hereafter referred to as Directory Advertising.Google Scholar

99 See Directory Advertising at 805F-H and 806E-F.

100 See Directory Advertising at 805D-F.

101 In this case as set out in the interim constitution, Act No. 200 of 1993.

102 See Directory Advertising at 807E.

103 In particular section 3(1), and subsections 7(1) and (2) at 807I-808E.

104 See Directory Advertising at 808G-H and 811A-B. For the detailed reasoning of how Van Dijkhorst, J., arrived at this conclusion see Directory Advertising at 807F-811B. For an analysis of the question of determining when a statutory body such as Telkom or a university, is an organ of State, see Brassey, M., “Labour relations”, in Chaskalson, , above at 30–34, and “Labour relations under the new Constitution”, (1994) 10 South African Law Journal 179.Google Scholar

105 S. 24(b) grants every person whose rights or legitimate expectations are affected or threatened a right of procedurally fair administrative action.

106 See Directory Advertising at 811D-I.

107 See Directory Advertising at 812C.

108 In van Rensburg above at 1617H-I Lang, A.J., held that section 22 of the final Constitution, which was under scrutiny in that case, was the direct successor to section 26 of the interim Constitution.

109 See Directory Advertising at 813C-G (my emphasis).

110 See Directory Advertising at 813 G-H.

111 1990(4) SA 604, referred to hereafter as the Times Media Limited case.Google Scholar

112 See the Green Paper for Public Discussion: Broadcasting Policy, Ministry for Posts, Telecommunications and Broadcasting, November 1997 at http://www.polity.org.za/govdocs/green_ papers/broadcasting.html and also see the White Paper on Broadcasting Policy, Ministry for Posts, Telecommunications and Broadcasting, May 1998. The draft legislation, The Broadcasting Bill, No. 94 of 1998 is to be found at http://www.doc.gov.za was passed into law on 4 November, 1998. It has yet to receive Presidential consent.

113 No. 73 of 1976, which replaced the Broadcasting Act No. 22 of 1936 with the advent of television in South Africa.

114 Now repealed by s. 103 of the Telecommunications Act.

115 Until the coming into operation of the Independent Broadcasting Act No 153 of 1993 on 31 March, 1993, there were only two competitors to the SABC in the radio broadcasting market, Radio 702 and Capital Radio, neither of which was a national station.

116 See s. 7.

117 As the Times Media Limited case suggests at 605I-J it is not uncontentious to regard M-Net and the SABC as competitors. Note that on 3 April, 1998, the South African Independent Broadcasting Authority (IBA) issued a private television licence to a station broadcasting as “e TV” and thus authorized a third company to operate a network. See http://www.sn.apc.org/iba/midi.html.

118 See the Times Media Limited case above at 605B-D.

119 See the Times Media Limited case above at 605D-E.

120 See the Times Media Limited case above at 605E.

121 See the Times Media Limited case above at 605G-I and at 606H-J.

122 See the Times Media limited case above at 606A.

123 Compare the language of Van Dijkhorst, J., in Directory Advertising at 813C-G.

124 See the Times Media Limited case at 607F-I (my emphasis).

125 See the Times Media Limited case at 606A-G.

126 The VANS licence issued to Telkom27 defines VANS as: “… including without limitation electronic data interchange; E-mail; protocol conversion; access to a database or a managed data network service; voice mail; store and forward fax; videoconferencing; telecommunications related publishing and advertising, whether electronic or print; electronic information services, including internet service provision” (my emphasis). See Government Gazelle No. 17984, Notice No. 769 of 7 1997. Telkom was conducting its internet access service through a business unit known as the South African Internet Exchange (SAIX).

127 This was the effect of s. 78(1) and (2) and s. 78(5) of the Post Office Act.

128 For a more detailed history of the relationship between Telkom and the independent ISPs see Kotlowitz, D., “Telkom, South Africa's internet anschluss: A cautionary tale”, unpublished paper, Toronto, 1998.Google Scholar

129 Established in terms of the Maintenance and Promotion of Competition Act No. 96 of 1979.

130 For more detail regarding the nature of the ISPA complaint to the Competition Board see http://www.ispa.org.za/submission.html; Kotlowitz above and the so-called ISPA Blue Paper at http:/ /www.internet.org.za/industry/regulatory_materials/bluepaper2. html.

131 See Kotlowitz, , above. See also the Discussion Paper on Competition Policy, Department of Trade and Industry, 11 1997, where the Department raises the question of the difficulty of drawing the dividing line between the Competition Board's jurisdiction and the Authority's jurisdiction.Google Scholar

132 See Government Gazette No. 18,262, Notice No. 1309 of 3 September, 1997. and Government Gazette No. 18,272, Notice No. 1320 of 5 September, 1997.

133 It may transpire, as is set out below, that a court will have to resolve the technical issues. For an indication of a judicial synthesis of the technology involved see Telkom (SA) Limited v. Maepa and others, unreported judgment of the High Court of South Africa (Transvaal Provincial Division), Case no. 25840/97 of 8 April, 1998, referred to hereafter as Maepa.

134 See the definitions section of the Telecommunications Act “telecommunications facilities”.

135 For example the Authority ruled: “Notwithstanding that the original question was ‘whether IP falls within the exclusive rights of Telkom', the Authority endorses the recommendation … that the question be restated to ‘whether IP access is to be provided under a PSTN licence or under a VANS licence’”.

136 See Advisory Committee Report Final Version 10 October, 1997. Text obtained from the Service Providers' Association, Johannesburg.Google Scholar

137 See Maepa above at 16.

138 See s. 40(1)(b) of the Telecommunications Act and the interim guidelines set out in Government Gazette No. 18,462, Notice No. 1811 of 20 November, 1997.

139 See Maepa at 14, 21, 23, and 24.

140 In any event it was common cause between all the parties that the pronouncement did not have the force of law. See Maepa at 18.

141 Maepa at 24–26.

142 See Government Gazette No. 18,214. Notice No. 1200 of 15 August, 1997. Ruling FR-0001.

143 See Notice No. 1200 above at 2.

144 See the White Paper at clause 2.10.

145 See Business Day, Johannesburg, 14 August, 1997.Google Scholar

146 See n. 12 above.

147 See n. 13 above and see http://www.doc.gov.za/docs/pr/1999/pr0121.htm.

148 With the enactment of the IBA Act in March 1993.

149 See s. 4(1)(b) of the Post Office Act.

150 See s. 7 of the Broadcasting Bill (Version B 94D 98).

151 See s. 36 of the Broadcasting Bill.

152 Multi-channel distribution service means: “[A] service which transmits more than one channel at the same time by means of radio waves or telecommunications”. Channel is defined as: “[A] single defined television programming service of a licensee other than a video on demand programming service”. A broadcaster is defined as: “any legal or natural person who composes or packages or distributes television or radio programme services for reception by the public or sections of the public or subscribers to such service irrespective of technology used”. The latter qualification may point to Internet services, but the definition remains ambiguous. Television broadcasting service is defined as: “[A] broadcasting service consisting in the sending of visual images or other visible signals whether with or without accompanying sounds, where the visual images are such that sequences of them arc seen as moving pictures”.

153 S. 2 of the Telecommunications Act states: “The primary object of this Act is to provide for the regulation and control of telecommunication matters in the public interest.…”

154 See http://satra.gov.za/interconnect-guides.htm.

155 See s. 44(7) of the Telecommunications Act as read with section 43(3).

156 See Krasnow and Goodman above n. 1 at 13.