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Issue Date: February 2004 (es)

Conversion Bill might prevent the growth of e-commerce

1 February 2004
Reinhardt Buys, managing director, Buys Inc Attorneys

The Draft Convergence Bill was issued for public comment by the Department of Communications on 3 December 2003. The current provisions of the Bill will have far reaching implications for online businesses in South Africa.
Background
The differences between communication technologies such as television, radio, cellphones and the Internet are not as clear as a few years ago. Today, one can listen to radio over the Internet, send an e-mail message from a cellphone and even download music and video from the Net. Websites allow people to download and use ring tones for their cellphones, some television stations allow people to buy goods with their remote controls. The reason for this is the so-called 'convergence' of technologies.
In South Africa, like in many other countries, the use and provision of communication technology is regulated by law. For example, the Broadcasting Act regulates television and radio while the Telecommunications Act regulates telephone and cellphone services. The process of convergence frustrates the operation of these laws and the associated regulatory regimes.
The Convergence Bill is a piece of proposed legislation that will address the issue of technology convergence in South Africa.
Provisions of the proposed Convergence Bill
The Bill proposes a move away from the current licensing system based on the nature of the technology (eg television, cellphone and Internet) to a system based on the nature of the service being offered.
In terms of the Bill, licences will be required for providing the following 'services':
* Infrastructure services.

* Communication network services
- defined in the Bill as 'the provision of a communication service, including incidental and/or necessary services such as billing, data processing, customer care, directory enquiries, access to emergency services and compliance with statutory obligations'.
* Communications application services - defined in the Bill as 'the provision of a communication service provided by means of applications, including incidental and/or necessary services such as billing, data processing, customer care, directory enquiries, access to emergency services and compliance with statutory obligations'.
* Communications content services - defined in the Bill as 'a communications application service which provides content to consumers by means of a communications service, including traditional broadcast service, online publishing and information services'.
In terms of the current wording of the Bill, businesses involved in 'online publishing' and 'information services' would only be allowed to operate once such businesses applied for a licence in terms of the Bill and when such a licence was in fact issued.
The duty to obtain a licence is not the only burden faced by those who provide online publishing and information services. In terms of section 14 of the Bill, the Independent Communications Authority of South Africa (ICASA) may prescribe terms and conditions, including social obligations, before issuing a licence. In prescribing the standard terms and conditions for each licence, ICASA must have regard to the empowerment of historically disadvantaged groups including women and the youth.
Those who provide online publishing and information services without a licence may face fines as high as R500 000 or R10 000 per day.
Opinion
In our opinion the abovementioned provisions of the Bill are unconstitutional. The fact that online publishers will be burdened with costly and onerous licence requirements not applicable to offline publishers will breach the Constitution's equality provision. Furthermore, free expression and the right to receive and impart information will be unreasonably restricted.
Online publishers provide quality content at lower costs than traditional publishers who have to finance printing, physical distribution and storage costs. Subjecting online publishers to affirmative action obligations and costly licence requirements will prevent many South Africans from accessing affordable content on the Internet and through other electronic means.
The Convergence Bill is based on the Malaysian Communications and Multimedia Act which also refers to online publishing and information services. However, in terms of a regulation issued in terms of the Act, online publishing licensing requirements are limited to satellite broadcasting subscription, broadcasting, terrestrial free to air TV and terrestrial radio broadcasting.
Online publishers provide quality content at lower costs than traditional publishers who have to finance printing, physical distribution and storage, subjecting them to conditions and licence requirements would prevent many South Africans from accessing affordable content on the Internet. 'Online' is a term referring to the Internet, e-mail and the World Wide Web and online publishing would have a corresponding meaning. Why would the Bill use the term if the plan is to later restrict it to satellite, TV and radio broadcasting? Those in the Web publishing environment are encouraged to submit their concerns to the Department of Communications.
The Convergence Bill may be downloaded from: http://docweb.pwv.gov.za/Convergence/1-25806%203-12%20Commu.pdf


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