Articles

Decision document maps radio allocations

Business Law & Tax Review October 2008
By Vanessa Da Costa

Under the Electronic Communications Act, 2005, a radio frequency spectrum licence is required for the purposes of utilising the radio frequency spectrum. Radio frequency spectrum means the portion of the electromagnetic spectrum used as a transmission medium for electronic communications.

The Independent Communications Authority of SA (Icasa) is responsible for controlling, planning, administering and managing the use and licensing of the radio frequency spectrum, whereas the communications minister represents SA in international forums, including the International Telecommunications Union, in respect of the international allotment of radio frequency spectrum.

Save for certain exceptions, no person may transmit any signal by radio or use radio apparatus to receive any signal by radio except under and in accordance with a radio frequency spectrum licence granted by Icasa to such person in terms of the Electronic Communications Act.

In an unreported judgment in the matter of Altech Autopage Cellular (Pty) Ltd v ICASA and Others 20002/08, acting Judge Davis correctly pointed out that radio frequency spectrum is a scarce resource. This is also apparent when one reads the decision document by Icasa (Government Gazette No 31550 of 17 June 2008) with regard to the allocation of radio frequency spectrum.

In this document Icasa proposes a two-phased approach for rewarding radio frequency spectrum licences for completing applications or instances where there is insufficient spectrum available to accommodate demand.

The two phased approach is characterised by a pre-qualification beauty contest phase followed by an auction phase. According to Icasa, this approach will allow it to fulfil social and economic objectives while introducing progressive market based mechanisms. The most important issue to be prescribed in the pre-qualification beauty contest phase is the extent of inclusion of historically disadvantages individuals in the following areas:

• Minimum 51% black-owned in line with the Broad-Based Black Economic Empowerment Act, 2003;

• Areas of participation in management and control in line with the Employment Equity Act, 1998;

• Affirmative procurement in line with Preferential Procurement Policy Framework Act, 2000; and

• Commitment to skills development of historically disadvantaged individuals in line with the Skills Development Act, 1998.

In terms of the decision document, Icasa has decided to allocate the spectrum on technology and service-neutral basis, while taking into account technological advances for planning purposes. Furthermore, Icasa has decided to allow six additional national licences on the remaining spectrum in the 2.6GHz band and only allow regional licences on the remaining spectrum in the 3.5GHz band.

Notwithstanding that this is merely a decision document which Icasa intends to use as the basis for drafting the final regulations, the two-phased approach and the strict criteria for obtaining a radio frequency spectrum licence, in particular the 51% broad-based BEE requirement, would appear to give rise to a "competitive" process for a scarce resource.

This is in line with both the provisions of the Electronic Communications Act and the country’s policy considerations in ensuring the proper distribution of scarce resources such as bandwidth.