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Cablegate: Ict Forum Discusses Need to Improve Implementation of Ict

VZCZCXRO7417
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #1976/01 2520850
ZNR UUUUU ZZH
R 080850Z SEP 08
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 5615
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 02 PRETORIA 001976

SIPDIS
SENSITIVE BUT UNCLASSIFIED

DEPT FOR EEB/CIP/BLAKEMAN

E.O. 12958: N/A
TAGS: ETRD EIND EINV EINT ECIP SF
SUBJECT: ICT FORUM DISCUSSES NEED TO IMPROVE IMPLEMENTATION OF ICT
POLICIES AND STREAMLINE REGULATIONS

REF: PRETORIA 271

1. (SBU) Summary. The South African Chamber of Commerce and Industry
(SACCI) sponsored a forum on ICT Developments and Regulations on
September 4. The forum included members of South Africa's
Presidential International Advisory Council on Information Society
and Development, who promoted increasing ICT access in South African
schools. Forum participants criticized the Independent
Communications Authority of South Africa (ICASA) for its onerous
licensing processes. Speakers also called for a campaign to educate
political leaders who would impact future ICT policy development and
implementation. New developments in the ICT sector including the
introduction of Neotel, SEACOM undersea fiber-optic cable, and new
Value Added Network Services (VANS) networks will serve to drive
down ICT costs for South African consumers in the coming months.
End Summary.

2. (U) SACCI sponsored a forum on ICT Developments and Regulations
at Microsoft South Africa headquarters on September 4. Embassy ICT
officer attended the forum and had the opportunity to speak with
industry and consumer group representatives.

3. (U) Forum Participants included members of the Presidential
International Advisory Council on Information Society and
Development, which will meet September 6-7 to advise President Mbeki
on leveraging ICT to advance South African development. Advisory
council members include representatives from international ICT
companies. Microsoft Regional Technology Officer Michael Thatcher
said the advisory council would urge President Mbeki to increase
efforts to help schools utilize technology. It would also urge
South Africa to tighten intellectual property rights (IPR) so
entrepreneurs could make a living from their inventions.

--------------------------
IMPLEMENTATION A ROADBLOCK
--------------------------

4. (U) Thatcher identified deficiencies in policy implementation as
a roadblock to improvements in the South African ICT sector. He
said "even when policies were good, their implementation was
erratic." He noted that the South African Government (SAG) has a
commendable policy to provide schools with a fifty-percent
discounted internet connectivity rate. However, Thatcher
highlighted that implementation roadblocks have made it difficult
for most schools to access this discounted rate. The policy has not
been well-enforced and fewer than ten percent of schools could
access the discounted rate. Thatcher also cited the execution and
implementation of IPR policies as critical to growth in the sector.
He explained that the Patent Office would need resources to transfer
its patents database online.

--------------------------
INDUSTRY CRITICAL OF ICASA
--------------------------

5. (SBU) Communications Users' Association of South Africa (CUASA)
Representative Roy Webber criticized ICASA for slowing the pace of
ICT liberalization and competition. Webber said South Africa needed
a strong, capable, independent, effective, well-funded and
communicative telecoms regulator; but asserted that ICASA was
neither independent nor communicative. Webber slammed ICASA for its
"out-of-date" website and lack of oversight on ICT billing.
According to Webber, every operator should be forced to offer
per-second billing and ICASA should work to reduce interconnection
fees users pay when a call from one network terminates on another
(e.g., from a fixed-line to a mobile-line).

6. (SBU) ICASA Chairman Paris Mashile was also scheduled to
Q6. (SBU) ICASA Chairman Paris Mashile was also scheduled to
participate in the Forum, but did not attend. Webber expressed
frustration at Mashile's absence since he wanted to hear ICASA's
response to his critiques.

-------------------------------
ICASA Licensing Process Slammed
by Industry and Courts
-------------------------------

7. (SBU) Webber disparaged ICASA for slowing down the roll-out of
additional ICT networks. Webber noted that ICASA processes had
considerably delayed the licensing of the second national operator
Neotel, which delayed much-needed competition against state-owned
Telkom. He also criticized ICASA's license conversion process for
existing ICT license-holders. According to Webber, ICASA has
started the license conversion process, but has not finalized the
costs for these new licenses. This creates uncertainty for the
industry.

8. (SBU) Webber noted that ICASA's shortcomings in the licensing

PRETORIA 00001976 002 OF 002


process were recently highlighted by a Pretoria High Court decision,
which found ICASA's processes to be flawed. The issue centered on
whether companies holding Value Added Network Services (VANS)
licenses were entitled to build their own network, or whether they
were had to lease their backbone facilities from Telkom. The court
decision effectively ended Telkom's monopoly by decreeing that
technology company Altech has the right to build its own network.
Webber emphasized that ICASA should have addressed this issue
three-years ago instead of being forced to do so through the courts.


9. (U) According to press reports, the decision will open the
"floodgates for competition since it allows about 300 other internet
service providers and data carriers to build their own networks,
too." Altech CEO Craig Venter described the decision as "an
undisputed victory not only for Altech but for the whole telecoms
industry." Venter said it would cost about R1 billion ($125
million) to set up a national network so most players could not
afford to do so, but those with the financial muscle could now swing
into action. "Ultimately, consumers will benefit because they will
see lower prices," Venter added.

-------------------------
INDUSTRY MUST EDUCATE ANC
-------------------------

10. (SBU) Professor Itumeleng Mosala, a former cabinet-member under
the Mandela government, encouraged industry and consumer
organizations to "better educate policy-makers" on ICT issues. He
acknowledged that here had been unnecessary SAG interference in the
ICT sector in the past, but cited a need for better-informed policy
makers. Mosala noted that "interference many times masquerades as
regulation. Government has a right to regulate but it has no right
to interfere." He prompted the ICT sector to be more strategic in
addressing problems with the ICT regulatory environment.

11. (SBU) Mosala noted that a new ANC government would soon be in
power and industry officials should work with the ANC to educate
them. He said that lobbying efforts tended to concentrate on
officials at the Department of Communications (DOC) or ICASA, when
they should also be targeting broader ANC leadership. He emphasized
that policy is developed by committee in the ANC and he did not
believe that ANC policy makers were currently well-informed about
the ICT sector or the implications of SAG ICT policies on economic
growth. "If they understood the issues, they'd implement policies
better," Mosala said.

12. (SBU) Comment: Increased competition and innovations in the
South African ICT sector have been hampered by DOC and ICASA
policies. The DOC has championed policies to support state-owned
entities and state-sponsored ICT projects at the expense of improved
and affordable services. ICASA officials have acknowledged delays
in the license conversion process (reftel) and the need for
additional training on spectrum management. U.S.-based ICT
companies have also cited the need to better inform SAG officials
about developments in the ICT sector and the impact of SAG policies
on sector growth.

13. (SBU) Despite these challenges, competition in the sector should
be revolutionized in the coming months. Neotel has recently begun
offering competitive fixed-line services. Increased bandwidth
capacity also will become available in June 2009 with the SEACOM
undersea cable project. Finally, liberalization in the sector will
also be spurred on by the recent court decision to allow VANS to
Qalso be spurred on by the recent court decision to allow VANS to
develop their own networks. All of these developments, which will
be occurring at about the same time, will serve to drive down ICT
costs for South African consumer. End Comment.

LA LIME

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