The Ministry of Telecommunications and Postal Services has published its amendment to the Electronic Communications Act (ECA) in the Government Gazette.

South Africa’s telecommunications industry has been waiting for the amendment bill to see how the government will give effect to its plans to create a national wholesale open access network (WOAN).

In addition to laying out the process for the licensing of the WOAN, the amendment bill inserts new legislation for radio frequency spectrum trading and sharing – and introduces a “use it or lose it” clause.

There is also legislation on refarming spectrum, and the department has delegated the responsibility of the national radio frequency band plan to itself.

Use it or lose it

The amendment bill states that if a radio frequency spectrum licensee fails to use spectrum licensed to it for a period of two years, ICASA may withdraw the licence.

This is referred to as the “use it or lose it” principle.

Spectrum trading

Radio frequency spectrum licensees may trade licenced spectrum, subject to approval from ICASA.

ICASA must prescribe regulations which include:

The spectrum trading application and notification processes.

The criteria and conditions for spectrum trading.

These criteria and conditions must consider the following:

Competition may not be distorted by any spectrum trade, or by the accumulation and hoarding of spectrum rights of use.

Licence obligations will be passed on to the new user of the radio frequency spectrum.

The current radio frequency spectrum licensee must have used the radio frequency spectrum in the year prior to the spectrum trade.

Submission to ICASA of the particulars of the spectrum trade.

The amendment bill gives ICASA 12 months from the commencement of the legislation on spectrum trading to prescribe regulations.

Spectrum sharing

Licensees may share radio frequency spectrum.

In the case of “high-demand spectrum,” such as the spectrum used to connect mobile phones, licensees must get approval from ICASA to share.

For spectrum that is not in high demand, licensees must just notify ICASA.

ICASA may not approve spectrum sharing of high-demand spectrum if it will:

Have a negative impact on competition.

Amount to spectrum trading.

Compromise emergency services and other services that meet public interest goals.

As with spectrum trading, ICASA is given 12 months to develop regulations for spectrum sharing from the day that section of the legislation commences.

Spectrum refarming

Spectrum licensees must now get approval from ICASA to “refarm” spectrum assigned to them.

Refarming refers to the practice of repurposing spectrum for a different technology or use. South Africa’s mobile operators relied on refarming to roll out LTE services, as the government had not assigned new spectrum suitable for the technology.

ICASA is barred from approving spectrum refarming if it will have a negative impact on competition.

It must also levy spectrum fees in line with other assigned spectrum in similar bands.

ICASA has 12 months to prescribe regulations on spectrum refarming from the date of commencement of that section of the legislation.

Minister takes control of the band plan

The amendment bill contains a change which places control of the national radio frequency band plan with the minister, rather than ICASA.

It has amended the legislation to state that in preparing the national radio frequency plan, the minister must consult ICASA.

WOAN

ICASA must ensure that the operators of the WOAN are issued the relevant licences.

The applicant for a wireless open access network service licence:

Must include diversity of ownership and control to ensure meaningful participation of all entities involved.

Must include effective participation by targeted groups, including women, youth, and persons with disabilities.

May not be dominated or controlled by any single entity.

May not be a public entity under the Public Finance Management Act.

May not have members in the consortium that either separately or collectively possess a market share of more than 50% in electronic communication services.

If any member of a consortium applying for the WOAN licence is already a network operator in South Africa, ICASA must require functional separation between its existing network operations and its participation in the WOAN.

As part of licensing the WOAN, ICASA must determine:

The terms and conditions, including universal service and access obligations.

Incentives such as reduced or waived spectrum fees.

Another incentive ICASA may consider is to not prescribe the wholesale rates that the WOAN can charge for a limited period.

ICASA must consider imposing regulatory remedies on the WOAN service licensee to ensure effective service-based competition, and to avoid any anti-competitive effects.