Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News
      Big Microsoft 365 price increases coming next year

      Big Microsoft price increases coming next year

      5 December 2025
      Vodacom to take control of Safaricom in R36-billion deal - Shameel Joosub

      Vodacom to take control of Safaricom in R36-billion deal

      4 December 2025
      Black Friday goes digital in South Africa as online spending surges to record high

      Black Friday goes digital in South Africa as online spending surges to record high

      4 December 2025
      BYD takes direct aim at Toyota with launch of sub-R500 000 Sealion 5 PHEV

      BYD takes direct aim at Toyota with launch of sub-R500 000 Sealion 5 PHEV

      4 December 2025
      'Get it now': Takealot in new instant deliveries pilot

      ‘Get it now’: Takealot in new instant deliveries pilot

      4 December 2025
    • World
      Amazon and Google launch multi-cloud service for faster connectivity

      Amazon and Google launch multi-cloud service for faster connectivity

      1 December 2025
      Google makes final court plea to stop US breakup

      Google makes final court plea to stop US breakup

      21 November 2025
      Bezos unveils monster rocket: New Glenn 9x4 set to dwarf Saturn V

      Bezos unveils monster rocket: New Glenn 9×4 set to dwarf Saturn V

      21 November 2025
      Tech shares turbocharged by Nvidia's stellar earnings

      Tech shares turbocharged by stellar Nvidia earnings

      20 November 2025
      Config file blamed for Cloudflare meltdown that disrupted the web

      Config file blamed for Cloudflare meltdown that disrupted the web

      19 November 2025
    • In-depth
      Jensen Huang Nvidia

      So, will China really win the AI race?

      14 November 2025
      Valve's Linux console takes aim at Microsoft's gaming empire

      Valve’s Linux console takes aim at Microsoft’s gaming empire

      13 November 2025
      iOCO's extraordinary comeback plan - Rhys Summerton

      iOCO’s extraordinary comeback plan

      28 October 2025
      Why smart glasses keep failing - no, it's not the tech - Mark Zuckerberg

      Why smart glasses keep failing – it’s not the tech

      19 October 2025
      BYD to blanket South Africa with megawatt-scale EV charging network - Stella Li

      BYD to blanket South Africa with megawatt-scale EV charging network

      16 October 2025
    • TCS
      TCS+ | How Cloud on Demand helps partners thrive in the AWS ecosystem - Odwa Ndyaluvane and Xenia Rhode

      TCS+ | How Cloud On Demand helps partners thrive in the AWS ecosystem

      4 December 2025
      TCS | MTN Group CEO Ralph Mupita on competition, AI and the future of mobile

      TCS | Ralph Mupita on competition, AI and the future of mobile

      28 November 2025
      TCS | Dominic Cull on fixing South Africa's ICT policy bottlenecks

      TCS | Dominic Cull on fixing South Africa’s ICT policy bottlenecks

      21 November 2025
      TCS | BMW CEO Peter van Binsbergen on the future of South Africa's automotive industry

      TCS | BMW CEO Peter van Binsbergen on the future of South Africa’s automotive industry

      6 November 2025
      TCS | Why Altron is building an AI factory - Bongani Andy Mabaso

      TCS | Why Altron is building an AI factory in Johannesburg

      28 October 2025
    • Opinion
      Your data, your hardware: the DIY AI revolution is coming - Duncan McLeod

      Your data, your hardware: the DIY AI revolution is coming

      20 November 2025
      Zero Carbon Charge founder Joubert Roux

      The energy revolution South Africa can’t afford to miss

      20 November 2025
      It's time for a new approach to government IT spend in South Africa - Richard Firth

      It’s time for a new approach to government IT spend in South Africa

      19 November 2025
      How South Africa's broken Rica system fuels murder and mayhem - Farhad Khan

      How South Africa’s broken Rica system fuels murder and mayhem

      10 November 2025
      South Africa's AI data centre boom risks overloading a fragile grid - Paul Colmer

      South Africa’s AI data centre boom risks overloading a fragile grid

      30 October 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • Wipro
      • Workday
      • XLink
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Financial services
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » In-depth » ICT bill ‘irresponsible’, Free Market Foundation warns

    ICT bill ‘irresponsible’, Free Market Foundation warns

    By Duncan McLeod9 January 2018
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Government’s radical Electronic Communications Amendment Bill, which seeks to introduce into law many aspects of the controversial national integrated ICT policy white paper, will undermine the industry and lead to poor and inadequate infrastructure that is expensive and ill-suited to service South Africa’s economy.

    That’s a key message in a submission document written by the Free Market Foundation and sent to the department of telecommunications & postal services, which has given industry role players until the end of January to comment on the draft legislation. The bill, if enacted in its current form, will introduce sweeping changes to South Africa’s ICT sector, changes that the foundation believes will be detrimental for the industry and for consumers.

    It has slammed government’s plan to prohibit the trading of so-called high-demand spectrum, criticised its planned wholesale open-access network (Woan) and said some aspects of the bill, including a section giving operators unfettered access to private property, are unconstitutional.

    It is unfortunate that the department has chosen to take a monopolistic route in an industry which cannot effectively function in the presence of a monopoly

    The submission, written by foundation legal researcher Martin van Staden, said that after a period of “relative freedom” for operators following the introduction 10 years ago of the Electronic Communication Act, South Africa will have a “rigid, government-decreed planning system”.

    “Subsequent to the white paper’s enactment into law, through the Electronic Communications Amendment Bill, we will have the typical result of a government-planned system: poor, inadequate infrastructure that is expensive and ill-suited to serve South Africa’s economy.”

    It described the proposed Woan as “ill-fated and ill-considered”, saying the concept has only been attempted in Mexico, where it is still being implemented, and in Rwanda, where it “has yet to deliver the kind of success the South African government seeks”. Prices of 4G services in Rwanda are high, and uptake low, the foundation said. The Woan idea runs contrary to international best practice, which is to “empower private service providers instead of hoarding spectrum and infrastructure under a quasi-state monopoly”.

    Government wants to reserve a large chunk of high-demand spectrum (ideal for building mobile broadband networks) for the Woan, with any leftover frequencies allocated to commercial operators (if at all). Among other conditions to be imposed, licensed operators are expected to buy at least 30% of their capacity from the Woan to ensure its commercial success.

    ‘Monopolistic route’

    “It is unfortunate that the department has chosen to take a monopolistic route in an industry which cannot effectively function in the presence of a monopoly,” the foundation said in its submission. “While the Woan will not be a retail provider — that is, it will not engage with customers — it will centralise the control of radio frequency spectrum and have the discretion to revoke spectrum use based on the government’s policy criteria.”

    The Free Market Foundation has also blasted government for seeking to ban trading in high-demand spectrum, saying it will inhibit market forces from determining the best allocation of radio frequencies.

    “The fact that trade in spectrum other than high-demand spectrum is also highly regulated is also of concern. The fact that spectrum could not be freely traded, and was not assigned by government, is the core reason why data has been comparatively expensive in South Africa in recent years,” it said.

    “The banning and regulation of trade is anticompetitive and concentrates the most useful spectrum resources in the hands of only a few market players. Were free trade in all types of spectrum possible, network service providers would have more use for existing infrastructure.”

    Spectrum, and its inherent value, is a product of invention and innovation by industry and is not a “natural resource” over which government must exercise tight control lest it be “used up”, as both the white paper and the bill imply, the foundation said. “Before Guglielmo Marconi (more than a century ago), the concept of radio frequency spectrum did not exist and, consequently, had no value. Arguments that radio frequency spectrum is a natural resource requiring allocation by government, therefore, look specious.

    “When an innovative individual or group of individuals, even if they are part of the government when doing so, invent something new, or discover something new, it is preposterous to assert that it can somehow follow that government, as an institution, will forever be the owner (or the “custodian” — a de facto if not de jure owner) — of that thing. The South African government did not contribute in any way to the invention or discovery of radio frequency spectrum, making this notion even more bizarre.

    Spectrum is a technological asset and should be treated as private property, with trade moving the asset to the owner who values it most

    “Spectrum is a technological asset and should be treated as private property, with trade moving the asset to the owner who values it most. Such a system is infinitely more effective at allocation than government discretionary practice and creates better incentives for its efficient use and development. If owners do not use it efficiently in the minds of other investors, then those investors will attempt to buy the asset and redeploy its potential.”

    The foundation said freely tradeable spectrum will lead to a more efficient allocation of the asset than central planning by government. “This is as true for spectrum as it is for steel, water or clothing.”

    If government is concerned about spectrum hoarding, it should simply apply its “use it or lose it” policy more strictly, it said.

    The proposal, contained in the bill, to force operators to share their infrastructure on a wholesale and open-access basis with competitors is also problematic, the foundation said. Forcing them to do this will amount to “regulatory expropriation of property whereby the owner of the property is robbed of some of the crucial entitlements of ownership, including control and defence”.

    Contrary to the constitution

    “It is contrary to section 25(1) and 25(2) of the constitution and should be removed from the bill. Moreover, while existing infrastructure might now be shared between network service providers, it stands to reason that no new infrastructure will be subsequently built as the incentive to do so will be completely removed by this bill.”

    In addition, South Africans’ property rights are not afforded adequate respect in the bill, the foundation said in its submission.

    “It empowers network service providers to enter onto private property without owner consent, to install network infrastructure and facilities. Owners’ recourse for compensation is severely curtailed in the bill. The proposed law thus falls foul of … the constitution.”

    In the submission, the foundation has also cautioned government against the reckless use of the term “market failure”, arguing that success in the market by an operator does not constitute failure.

    “The term is used seemingly at random. What ‘market failure’ is the bill referring to? Does the mere fact that certain licensees may have ‘significant market power’ equate with market failure? It cannot be that a service provider that has been successful in satisfying the needs and desires of its clients, and grows significantly as a result, is deemed to be a ‘failure’ in the market and in need of remedial action. The bill is, in effect, telling providers that they must compete, but that they are not allowed to win the competition. This kind of doublespeak strikes at the heart of the rule of law and introduces uncertainty and arbitrariness into law.”

    The foundation said it will be “irresponsible for government to bring about substantial change in an industry that can be proud of coverage statistics that are unrivalled anywhere else in Africa”.

    “We have the correct formula to tweak to ensure isolated rural communities are also covered … but we should not throw away the entire formula.” — © 2017 NewsCentral Media

    • Read the Free Market Foundation’s full submission (PDF)


    FMF Free Market Foundation Martin van Staden top Woan
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleNaspers said to plan R2.5bn food delivery investment
    Next Article Zuma stays, for now

    Related Posts

    Fica has become a bureaucratic beast that kills growth and liberty

    Fica has become a bureaucratic beast that kills growth and liberty

    27 October 2025
    Legal guardrails needed for smart ID roll-out in South Africa

    Legal guardrails needed for smart ID roll-out in South Africa

    8 October 2025
    Get AI rules wrong, choke innovation, warns Competition Commission - Hardin Ratshisusu

    Get AI rules wrong, choke innovation, warns Competition Commission

    15 September 2025
    Company News
    AI is not a technology problem - iqbusiness

    AI is not a technology problem – iqbusiness

    5 December 2025
    Telcos are sitting on a data gold mine - but few know what do with it - Phillip du Plessis

    Telcos are sitting on a data gold mine – but few know what do with it

    4 December 2025
    Unlock smarter computing with your surface Copilot+ PC

    Unlock smarter computing with your Surface Copilot+ PC

    4 December 2025
    Opinion
    Your data, your hardware: the DIY AI revolution is coming - Duncan McLeod

    Your data, your hardware: the DIY AI revolution is coming

    20 November 2025
    Zero Carbon Charge founder Joubert Roux

    The energy revolution South Africa can’t afford to miss

    20 November 2025
    It's time for a new approach to government IT spend in South Africa - Richard Firth

    It’s time for a new approach to government IT spend in South Africa

    19 November 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Latest Posts
    Big Microsoft 365 price increases coming next year

    Big Microsoft price increases coming next year

    5 December 2025
    AI is not a technology problem - iqbusiness

    AI is not a technology problem – iqbusiness

    5 December 2025
    Vodacom to take control of Safaricom in R36-billion deal - Shameel Joosub

    Vodacom to take control of Safaricom in R36-billion deal

    4 December 2025
    Black Friday goes digital in South Africa as online spending surges to record high

    Black Friday goes digital in South Africa as online spending surges to record high

    4 December 2025
    © 2009 - 2025 NewsCentral Media
    • Cookie policy (ZA)
    • TechCentral – privacy and Popia

    Type above and press Enter to search. Press Esc to cancel.

    Manage consent

    TechCentral uses cookies to enhance its offerings. Consenting to these technologies allows us to serve you better. Not consenting or withdrawing consent may adversely affect certain features and functions of the website.

    Functional Always active
    The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
    Preferences
    The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
    Statistics
    The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
    Marketing
    The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
    • Manage options
    • Manage services
    • Manage {vendor_count} vendors
    • Read more about these purposes
    View preferences
    • {title}
    • {title}
    • {title}