Minister & Deputy Minister of Communications progress report on commitments made to Portfolio Committee: November 2013 to January 2014: Day 2

Meeting report

Committee Business
The discussions on the minutes are recorded at the end of this report.

Letter addressed by Ms M Shinn to the Chairperson
The Chairperson reported that this letter had been circulated on the previous day, and, at the request of Mr C Kekana (ANC), asked that Ms Shinn briefly summarise the content.

Ms M Shinn (DA) said that in this letter, she had expressed concern at the reported reaction of the Chair and Deputy Chair of the SABC board in relation to the skills presentation at a recent meeting. This Committee had recommended that a skills audit be done, and the results were shocking and cast doubts on the ability of the SABC management to run a proper ship. There were comments on TV and the media, made by the SABC, to the effect that it was unfortunate that this skills audit had been presented to the Committee before the Board had had an opportunity, effectively, to “sanitise” the report. This was a grave concern, as it seemed to indicate that the Chairperson did not understand her responsibilities. Ms Shinn was now recommending that the entire board should be called to the Committee to account for its attitude, since it appeared to be wanting merely to rubber-stamp what the management wanted. In addition, it would be useful to question the Board on its reaction to the recently-released Public Protector’s report.

Ms J Kilian (COPE) suggested also that the Minister should respond to concerns raised in that letter. There was apparently an understanding, in the previous and current boards, that there should be an executive Chairperson, but this was not correct, and the board, as a collective, was responsible for making the decisions. She wanted that to be noted as a serious concern. She would support in principle what Ms Shinn was doing but wished also to expand on her request, and would like to see the whole board appearing before the Committee. Since the Minister was here, the Committee needed a response on the Public Protector’s report and how it was intended to deal with it. She was also concerned, in view of the Broadcasting Act, that Exco was an important component of the Board, and there was a serious problem there too, as the Group Chief Executive Officer had resigned, the Chief Operations Officer was the subject of the Public Protector’s report, and there were very controversial findings on the former Chief Financial Officer, since disciplined and removed, with an Acting Chief Financial Officer now in place. Taking into consideration the very serious financial constraints and audit results of the SABC, she did not feel that this Committee would not be conducting its oversight properly unless it did summon the Board to a meeting. She asked if the Minister shared her serious concerns about the management and affairs of the SABC, and if he agreed that the Board needed to be strengthened and placed under administration of National Treasury, to ensure that it was turned around, once and for all.

The Chairperson asked Members to confine themselves firstly to the letter from Ms Shinn, in relation to the skills audit. He would not like the Minister to deal with the Public Protector matters now. The Minister must interact with the SABC board before he could deal with these matters and the Committee must focus on its current work. In fairness to the Minister, these issues should not be conflated. The Committee would need to discuss how it wanted to approach the Public Protector’s report.

Ms M Morutoa (ANC) made some inaudible remarks and said that there was a problem when matters were raised in the media. She noted that the SABC had already been before the Committee when the skills audit was discussed, and she was disturbed at the suggestion that this Committee should be calling another meeting on the basis of media reports.

Ms R Lesoma (ANC) also made inaudible comments.

Mr A Steyn (DA) said that there was a misunderstanding about the role of the Board and the oversight duties of this Committee. If there was even a hint of the SABC Board “doctoring” the report, that was very serious, and if the Committee did not deal with that, it would be derelict in its duties. There had been too many instances where there had been suspicions that reports were doctored and the Committee should not let this pass by.

Mr Kekana agreed with Ms Morutoa that it was problematic if this Committee was to act on the basis of media reports, which could be distorted, as the accuracy of the media was problematic, and newspapers “should not be allowed to govern the country”.

Ms Shinn said that it seemed that there was a component of this Committee that was on the side of the SABC. This was the second time she had requested that the SABC board be called to account to the Committee; the first request was in relation to Multichoice. This particular issue pointed to the Board not understanding its fiduciary duties. Her concern was not based on unconfirmed media reports; she could produce the written interview and transcripts of the TV interviews with the Chairperson; but in any event, the Chairperson or Board would be given the chance to clarify if she had been misquoted or to put the record straight. If the Chairperson had not been misquoted, then this was all the more reason to have a meeting.

Ms Kilian requested that the programme be adjusted to allow the Board to come to the Committee.

Ms Lesoma said that none of the Members had responded to her question whether SABC was allowed to call a press conference.

The Chairperson agreed that they were allowed to call a conference.

Ms Morutoa said that Ms Shinn had made an allegation and this Committee was already checking whether people were complying with the laws of the country. Some Members did not agree with Ms Shinn on the need to call in the SABC again.

Mr Steyn raised his concerns that issues tended to be politicised in this Committee, with the ANC members taking the attitude that they would not be dictated to. He pleaded to all members to recognise that they were sitting here as a collective, and if there was any possibility at all that inappropriate comments were made by the Board, then they must be questioned. It was the content, and not the procedure, that Ms Shinn was concerned about. The Minister had said, during the report on the SIU investigations, that there were certain questions that only the Board, not the Minister, would have to answer, and that was precisely why it was necessary to call on the Board. The Committee could also take this opportunity to pose other questions to the Board, since the Ministry correctly could not answer them.

Mr Kekana responded that committee meetings were, by their very nature, politicised, and it was not possible to move away from multi-party engagement. It was true that there had been an engagement with the SABC on the skills audit, after which it had called a press conference. He believed that, given the tight schedule of the term, that would suffice.

The Chairperson said he would not like to put this matter to a vote, but he would rather leave it to the parties to engage between themselves and report back to him on their conclusions, at the next meeting.

Minister's comment on SABC issues arising out of discussion on letter
The Minister commented that the Public Protector had requested that the Minister of Communications take certain actions, but there seemed to be some confusion amongst the public as to what exactly the Minister had the power to do, as he did not have a legal right to deal with some of the issues being bandied around in the press. He reiterated his point from the previous day that it was not appropriate for the Minister to take a decision in respect of managers who were subject to the control of the SABC Board.

The Chairperson agreed, and urged anyone wanting to cite or make use of the Public Protector's report to read it thoroughly – all 150 pages.

Continuation of questions arising from Minister's update on commitments
Digital migration issues
Ms W Newhoudt-Druchen (ANC) said that she wanted clarity about the public awareness process, saying that there was much confusion simply because insufficient information was being provided. At the moment, there were several decoders available and the new STBs would also be made available. She was also very concerned as to whether the new STBs would provide sub-titling for the hearing impaired. DSTV did provide that, on its decoder but others did not. She noted that eTV had challenged the Department of Communications (DOC or the Department) in court, but she wanted to know why she should be forced to get a decoder if it did not offer subtitling. Secondly, she asked if she would have to acquire several boxes, or whether one STB would provide access to everyone.

Mr Roy Kruger, Ministry Representative, noted that the sub-titling was done by the broadcasters, in whatever language they decided to use.

He also noted that at the moment, the position with the various decoders was that the pay TV operators generally, because they were trying to secure their hold in the market, would put out their own proprietary boxes that were not interoperable. However, the DOC's STB would be interoperable and any pay TV operator would have access to the same control system, which must be selected by free to air channels, including any new companies coming on board.

The Minister added that anyone could use the controls, but must pay to do so.

Ms Newhoudt-Druchen noted that school connectivity was discussed on the previous day. The Minister had mentioned a discount of 50% but some schools in the rural areas could not even afford that cost, and asked what would be done for them. She further enquired whether there had been consideration given of the schools for disabled children and how they would be connected and asked also how many of the 565 schools connected since December were for the disabled.

Ms Stella Ndabeni, Deputy Minister of Communications, explained that the DOC did not identify the schools that must be connected, as that responsibility rested with the Department of Basic Education (DBE) but it was merely given a list. In regard to the affordability, she noted that the DOC had a mandate to ensure that everyone had access to information. The Electronic Communications Act, in sections 87 to 90, dealt with access to the Universal Services and Access Fund (USAF), and that allowed the DOC to instruct the Universal Services Access and Agency of South Africa (USAASA) in what areas the funding must be used. One of the options being explored was whether, after the rollout of DTT the DOC would have to seek funding and ensure that the private sector came on board to bridge any gaps.

Ms Rosy Sekese, Director General, Department of Communications, added that the 2014/15 Strategic Plan had identified the need to target the approach to identify schools that could provide IT. DOC was dictated to by the DBE, but it wanted to have a targeted approach of dealing with a certain number annually.

The Minister asked that Ms Sekese engage with the Members directly.

Ms Shinn noted that the whole digital migration process was being held up over the Set Top Box (STB) manufacturing issue. The STB manufacturing strategy was written eight or nine years ago, was controversial then, but was deemed to be over-optimistic in job creation targets. This raised the question whether the policy was relevant today, and whether the projection of 5 million STBs was still relevant; it was also not known how many would be subsidised. She said that she was concerned that in fact the jobs created may not lead to the industrial growth projected for the market may die as new TV set technology may overtake what this policy was intended to do. Some people believed that at most, only 900 jobs would be created for the duration of the programme. The whole battle was linked to who might get tenders. The electronics industry was already making the boxes for export, and she also stated that in fact the STBs would only be assembled locally, but using imported parts. She wondered if the country was to use the boxes already locally made and assembled, it might be able to cater for the demand. She had serious doubts about the viability of the strategy, although she accepted that the policy was set and could not be abandoned.

Ms Shinn said that the Minister had said that young entrepreneurs must be created and wondered how the tender would be managed. Many of the submissions on the previous tender process claimed that most of the people tendering did not actually have the experience to do the work and would be subcontracting. She sought assurance from the Minister whether, when the new tender was to be issued, there would be due diligence done to check that people actually had the capacity to turn around the boxes. Many government tenders were going to people without experience, but with the right credentials.

Mr Kekana noted strong comments from the Minister of Trade and Industry about the potential for manufacturing to move countries from third to first world status. South Africa was not yet doing as well as it could on this front. This Minister had also noted that the STBs should be locally manufactured, and he agreed that South Africa must upgrade to keep pace with the rest of the world, but suggested that this Committee perhaps needed to hear from the Department of Trade and industry (dti) how the manufacturing would be done. There had been mention of partnering with BRICS countries.

Ms Kilian said that digital migration posed huge opportunities for the country. However, she noted that during its oversight to Britain and Brazil, Members had also learned of some pitfalls that countries could face. She too was concerned also about the public awareness campaign and asked how the DOC would increase awareness, including ensuring that people knew what digital migration was about, why it was necessary, the benefits but also would warn them about the dangers that dumping by importers posed. People would need to be told that they did not have to buy whatever was offered, and for a little more, they would be able to buy new STBs or sets. She agreed that it might be that in fact less than 5 million STBs were needed. If the local component could be increased, with less expensive parts, the cost of the STBs might drop. Some countries had forced retailers to warn people as to what they were buying.

Ms Kilian understood the delays, which was water under the bridge, but expressed concern that these were holding back South Africa's creative talent also. She wondered what the risks would be for South Africa if it missed the deadline, and if it had any contingency plans. Industry was complaining because it had to provide technologists to maintain analogue and digital systems.

Ms Kilian said that at one stage, government's approach was veering towards expensive functionality, so that government services could be accessed through the TV. Another line of thought was to distribute a cheaper model, to ensure that people, particularly the poor, could still get access to their favourite TV channels, but that expansion of other technology including e-government services would be addressed in those areas in other ways. She wondered if it was not possible to produce a simpler model, but not ignore the reality that the uptake of STBs might be lower than expected. She asked for details of the current strategic approach.

Ms M Morutoa (ANC) agreed with Ms Kilian's concerns and recalled a meeting of heads of state in Maseru. She asked for an update on the position elsewhere. She had been concerned about the capacity. (Her other questions were inaudible).

Mr Yunus Carrim, Minister of Communications, commented that some of the questions she was raising related to tenders and he could not comment on those.

Ms A Muthambi (ANC) referred to slide number 10 of the overview presentation, relating to road shows and asked how and where these would be held. She also called for further details on other matters in that slide. She noted that the current report did not mention anything about the official launch.

The Chairperson asked how the clear directives for local manufacturing, as mentioned in the latest State of the National Address would be incorporated.

The Minister commented that there had been full consultation with people from inside and outside the Ministry and that the Ministry would invariably ensure that when position papers were presented, the conclusions would also be balanced with another independent viewpoint.

He noted that the Ministry and Committee, in the whole digital migration process, were essentially facilitators. He repeated the concerns of the previous day that no happy medium had been found, despite extensive effort. Some absolutely loathed control, and others were fully in support of it. Most of the questions now asked were really linked to policy issues. He reiterated that the migration was not a broadcasting issue alone, and Ms Shinn had essentially reduced matters down to the fundamentals. He had no doubt that if this policy process had been starting now, the trajectory may well have been different. The current Ministry was not shaping the policy but working on established policy, faced with legal challenges on both sides and had to arbitrate to try to avoid the country being held up for ever. He wished there was a simple answer to the question of whether government had made mistakes. The private sector had held the government to ransom in a “most shocking” manner.

He explained that the STB manufacturing development strategy that was tabled on 14 September 2012 took account of all matters. That, however, had a different formulation from the original policy, and looked to the digital economy. If the country did not migrate fast enough, it would be left behind. The National Development Plan (NDP) was clear that unless broadband was rolled out, South Africa would lose out, so there was actually no choice but to move forward.

In answer to whether the STB manufacturing would be sustained, he said that the DOC had done work on how long a person was likely to need a STB. The poor would not be changing their TV sets, so they would need the boxes for at least eight to twelve years. The poor should not be made to suffer at the expense of government. This was not an issue of entertainment or TV, and the needs of the poor were at the moment being overshadowed by the fight between the commercial broadcasters. There was a need to release radio frequency spectrum.

Whatever was done, as an industrial policy issue, would also have to offer benefits to black and emerging entrepreneurs. He assured Members that the DOC would be doing due diligence around the tendering process.

Commenting on the call for more public awareness, he said that one of the reasons why this had been held up was to try to get some agreement between the broadcasters with more space for engagement, so that the public was not asking as well why the control had not been settled. He also called for cooperation from the Committee in the public awareness process as well. It would, in addition, be linked to the Green Paper processes. In relation to the roadshow requests, he confirmed that the programme for the roadshows would be sent to the Committee.

The Minister noted that the “no control” option had been mooted, but it was not successful. He repeated that the broadcasters were concerned about their market audiences and profit. The dti had indicated that the “no control” would not work. Firstly, it would have taken up to 18 months to change the standard, the DOC faced the risk of being sued by both sides, and there was a need to find a way to protect the local industry. Mauritius had used this option and it was flooded with cheap STBs that did not work, and government and the legislators were blamed. The “Go Digital” logo of ICASA would be inscribed on all DOC STBs and the public awareness campaign would make it clear that whilst cheaper STB alternatives might be available, the public was warned that they may not function and did not meet the required standards.

The amount of functionality that the STBs would have depended upon the public broadcaster, and if, in future, it decided to use the controls. Ghana and Nigeria had a policy indicating control. Namibia and Tanzania had actually included the hybrid model use in their policies. The Ministerial Southern African Project Manager was looking into other models and managing the digital migration programme. Where South Africa differed from other countries was, firstly, in having the local manufacturing capacity, and secondly in offering the subsidy. The dti approach was that the creation of the boxes locally would lead to the production of digital TV in South Africa, and dti did see a lot of potential in the electronics industry. The Minister noted that the dti was abiding by the World Trade Organisation regulations. It had supported the submission to Cabinet. In its view, the control system provided the only viable means to provide for localisation. He agreed that the length of time in planning was not ideal, but the DOC had been hampered by historical issues.

The Minister reiterated that the DOC could not respond to questions around tenders. He reported that there had originally been an intention to launch a satellite company but if this was done the economic links that it was striving for may not correlate, so it had been decided to defer that. The latest roll out plans would be provided within 3 to 4 weeks.

The Deputy Minister wanted to emphasise that although the DOC was trying to ensure that everybody would achieve what they wanted, it was ultimately necessary to remember that the DOC had a responsibility to develop policy that did not the Constitution. The DOC, when challenged, would ultimately need to take a decision. No entity or private sector had that responsibility, and it was important to respect the position. DOC was also protecting the integrity of government.

Ms Sekese said that the STB had been designated for local manufacturing by dti so there would be engagement with that department in relation to the statements in the latest State of the Nation Address. A meeting had been held with dti and with the National Treasury to ensure that manufacturing concerns were taken into consideration.

The Chairperson noted that the Minister had raised an important issue, which maybe suggested that the DOC may need to reconsider some aspects. He said that the people who were affected by the STBs were in fact not found in the rural areas, but in townships and suburbs. He urged the DOC to ensure that the interests of those in the rural areas were in fact known; which implied the need to launch something in those areas for those people.  Any fights in the sector should not prevent any member of the public from getting access to information.

Ms Morutoa said it was very difficult to get the full gist of the presentation and answers in the current venue. Perhaps not enough time had been allocated for the DOC to explain all the issues. She asked who would be funding the training, which was needed, and if it would include those who did not agree to use the control systems.

Ms Muthambi noted that other decoders were available already for around R400 and she could download movies already. She asked whether people would be prevented from using what was currently available.

Ms Lesoma asked about local manufacturers, and why, during the eTV court challenge, the Committee had not ascertained the position of the dti. She also thought that not enough benefits were being shown for the poor.

Ms Newhoudt Druchen raised further concerns on the issue of sub-titling. At previous meetings the Committee had been informed that if certification was in place, the sub-titling would follow, but she now noted the suggestion that this was the production companies’ responsibility. She was receiving mixed information. The needs of the disabled were supposed to be respected by government – although she was concerned that the international convention had not been ratified timeously – and she insisted that access meant that subtitling must be included.

Mr Rory Kruger explained that the SABS standards specified that the STBs must allow for sub-titling although the actual responsibility for seeing to that still rested with the broadcaster, which would be free to choose the language and how exactly it would be done. The STB allowed the subtitling to come through as a picture on the screen. He repeated that the specifications were included, as the DOC was promoting access for disabled viewers, but the broadcasters took final responsibility.

Mr Kekana said that when there was reference to 75% local content, there had been reference to all manner of manufacturing. He said that local manufacturing meant that local and poor people would be employed, and he was excited that the poor could benefit from job opportunities.

The Minister responded that the Chairperson’s question really related to why the DOC should not merely launch the satellite sites immediately, and he accepted that suggestion and proposed that engagements should be held, in the next ten days, to try to get consensus on that launch.

In answer to Ms Morutoa he stressed that the hybrid model now suggested was allowing for more accessibility. Government would engage over the next year or two with SABC to see what could be done but this left the options wider open, so that anyone wanting to come in later would be able to get a signal. The cost of the STBs had come down since 2008, as with all technology. He was aware of the kind of boxes that Ms Muthambi was referring to, but he suggested that she should perhaps speak to other officials from the DOC, although her question illustrated precisely why this had to be finalised urgently. He repeated that the DOC boxes would bear the logo “Go Digital”, and ICASA was fully in support of the strategy and policy. Insofar as dti was concerned he believed that the need to promote local manufacturing was in the performance agreement between the Minister of Trade and Industry and the President.

The Chairperson said that the DOC could be asked to make a presentation about the different roles of the entities. The satellite sites for the under-serviced areas would have to be dealt with urgently. He said that DOC should continue with the engagements, but it was vital to ensure that the public, particularly school children, would have access to information, whether or not a final agreement was reached. The furtherance of digital migration would be passed over to the incoming Committee in the Fifth Parliament. He added that there were lessons to be learned along the way, and it might be useful to include the policy as an addendum to the Electronic Communications Act, as had been done in some other countries.

Other issues arising from the presentation
Ms Shinn wanted an update on the SABC Task Team and update and what had been found.

The Minister conceded that because of the preoccupation with digital migration, some other issues had been eclipsed. He had written to the Chairperson of the SABC Board last week, following a discussion in which she raised the point that other matters also needed to move on. Before the end of the month there would be a discussion on broadband, the IT Green Paper and the overall strategy, and the terms of reference of the Joint Task Team. SABC had some concerns about the terms of reference. As a general observation, he said that State Owned Companies seemed to feel they could do what they wanted, and that was problematic; they should be doing what was prescribed by law.

Ms Newhoudt-Druchen noted that during the amendments to the legislation, there were many changes that were noted as being deferred to the IT Policy review and she wanted to know what decisions were taken.

The Minister said that the DOC had gone to USAASA and ICASA and a presentation had been given on digital migration and broadband, which he would like to give to the Committee. The administration would be very important.

Ms Kilian asked the Minister how he would ensure that USAASA was ready for its major role to ensure universal services and access, in view of the concerns that had been raised in the Gobodo Report.

The Chairperson said that Members should not yet ask on the “status” of the Gobodo report

Ms Morutoa noted that the Minister had requested a legal opinion, but asked what this was, and whether it could be made available.

The Minister responded that there was a draft report on the USAASA matters, but the Board of USAASA had rejected the findings. The Ministry had sought advice from the Chief State Law Advisers. DOC had engaged with the Board on 28 January and the Chairperson of that Board had shared the Minister’s concern that the matters must be expedited. It would not be appropriate for him to release the legal opinion to Members, for that would put it effectively into the public domain. A further forensic enquiry had been suggested. His earlier comment applied equally to USAASA and its board must also abide by the law. The legislation dictated who managed the USAF. Exactly how it inter-related with the DOC in relation to digital migration was another matter. It had been suggested that the DOC, USAASA and National Treasury must meet, within the next two weeks, to deal with the matter, and do whatever the law required.

Ms Morutoa said that there was an obligation on this Committee to make sure that they understood the issues but she was not sure that the answers she was receiving made her willing to ask further questions. She said that some time ago there had been suggestions that USAASA might need to be abolished and there were serious concerns about its operations. The Committee on the other hand held the view that the STBs should be the responsibility of USAASA.

Ms Kilian supported this concern and said that the Committee wanted to avoid the wrong message being sent out, particularly through the media. If there was anything wrong, it must be admitted, opened up and cleaned up. At one stage the Deputy Minister had actually been the ANC Chief Whip and had spearheaded the whole matter around the role of USAASA, and whether it was performing its role. Members had both a right and a duty to get clarity on all these matters, and ensure that whatever was done was done properly, in terms of the law, and speedily, with no attempts to paper over the cracks, which would surely lead to “explosions in the media”.

The Minister noted these concerns. The question of whether USAASA was necessary was a matter that would be explored in the ICT Review process – as would the positions of SABC and ICASA and their roles in a converged environment. There were many expressions of views as to who did what. However, he came back to his earlier point – the legislation covered the situation. He was not attempting to paper over any cracks but was saying that the guidelines as contained in the legislation must be abided with. Nobody was above the law. The role of USAASA was indeed up for review and the next Parliament would have a hand in shaping it. There would be extensive discussions and workshops.

Ms Muthambi asked if the Minister was satisfied that those to be appointed had gone through the right security clearance. There were some issues raised by the Auditor-General and she asked for feedback on that. She asked about the reference to stakeholders on slide 5, and she wondered what was being done. She had attended a workshop in Gauteng and she wondered what was being done about nominations for the Broadband Council.

The Minster said that there were security clearances being done by the Department of Public Service and Administration (DPSA). The DOC would not take anything through to Cabinet without this having been done. There had been some delays in the process of the nominations.

Ms Sekese also commented but did not use a microphone and her comment was inaudible.

The Minister said that the Auditor-General’s recommendations had been carried out.

Mr Sam Vilikazi, Deputy Director General, DOC, said that the matters raised by the Auditor-General had come to the Committee, and there were action plans to address all the issues raised. About 50% of those issues were human resource related, such as overtime, leave and performance agreements, and those had been addressed. The implementation was having positive results.

Ms Muthambi asked if USAASA was still following its mandate and what was the current situation in relation to the funds. She had serious concerns about the work that it was supposed to be doing.

The Minister noted her point but said that this had been covered in an earlier response.

Ms Morutoa asked for details on the thinking of the Minister, and whether the USAF could be diverted for something else, from NT.

The Deputy Minister noted the mandate of the agencies, reading out section 8(2) of the USAASA Act, which noted that it must strive to promote and encourage universal access and service, and telecommunications services as part of the RDP projects, or promote adoption and new methods of obtaining universal access. Reference to telecommunications services would include a reference to electronic communications network services under this Act. The USAASA must, with due regard to prevailing attitudes and after obtaining public participation, make recommendations on what would be considered as “universal access”, and universal electronic provisions and access. USAASA must then manage the USAF in accordance with the provisions of this Chapter. Further references to the USAF were contained in sections 87 to 90 of the Act. USAASA must keep an account of the USAF, credit it with universal service contributions, and money accruing from any other source. All money received must be paid to the National Revenue Fund. It was financed from money appropriated by Parliament. It must be administered by the Agency, subject to the control of, and in accordance with, the instructions of the Minister.

Ms Muthambi spoke to school connectivity, as earlier presented upon by the Deputy Minister. She had asked for a provincial breakdown of the schools, and said that oversight was needed. She asked who would be handling the maintenance once there was installation in the schools, and the upgrades. Section 2 of the Electronic Communications Act said that small and medium enterprises, women, cooperatives and youth must be given opportunities. She referred to page 20 and noted that certain areas of Limpopo were not covered. She referred to the e-skills on slide 22 and asked about any initiatives in other provinces.

Ms Lesoma referred to slide 3 and appointments, and hoped that the Minister was paying due regard to the need for equity in Senior Management.

Ms Lesoma appreciated the input and mention of UNISA, but asked about the relationships with the Further Education and Training Colleges, who must also be involved.

Ms Kilian thought that it had been very useful for the Deputy Minister to have reminded this Committee what the legislation set out. It was indeed necessary for the DOC and the SOCs to act within the confines of their respective legislation. The Act, in section 83, was very clear about the role of the Chief Executive Officer and the staff and how the funding must be spent. She asked if the Minster had engaged in any investigation into USAF funds and was satisfied that there was nothing untoward.

Department of Communications presentation on ICT Policy Review and the Green Paper
Mr Joe Mjwara, Special Adviser to the Minister, said that the ICT Review Panel was constituted, and there were four stages identified. The first stage set out the principles to be used. It had published a framework and discussion document and had responses from the public and interested parties. The second stage related to the publication of the Green Paper Prior to that the DOC needed to do an assessment of the market and the objectives, and the draft policy was approved by Cabinet on 4 December and published on 21 January.

The next stage would be the publication of a discussion document to set out all statutory and policy issues that required resolution. The advent of the elections was putting pressure on that but it was intended to do this in the year and then to make the policy recommendation to Government by July 2014.

A document had been drafted, of twelve chapters, dealing with various aspects, covering the background, context, current state, postal infrastructure services, electronic communication information, broadcasting, universal access and services, and how to promote investment. The last Chapter was dedicated to institutional arrangements, where the roles were discussed. This included ICASA, problems in establishment, and possible future solutions, including the funding.

Mr Mjwara said that ideally this review should have taken place earlier, as most of the policies were adopted after 1994. The realities of convergence in the intervening years meant that a body set up to do one type of service was now able to do many. There was a need to consider the parameters of the Regulator (ICASA). The subsequent adoption of the Cabinet National Development Plan (NDP) and other policies set out the vision for how the communications sector must deal with connectivity, and they had to be taken into consideration. The policy review process would include provincial and national engagements.

He noted that an exercise of this nature obviously involved research, but one of the problems was that in South Africa there was no repository of information whose authenticity and correctness could be assured. There were no uniform indicators so DOC was trying to synthesise from varied sources. About 89% of households had at least one mobile phone, with 75% having access to TV and a surprisingly low 68% with access to radio, which showed that, contrary to popular belief, radio was not longer a primary tool. 35% had access to the internet and there was quite a detailed understanding of that. 15% had access to landlines showing how large the transition from fixed to mobile was.

There was quite a good understanding of how near people were to the nodes of the fibre network, with most were within a 50 km radius of the nodes. The network was developed, but the access part was lacking. DOC also knew that those outside coverage included 6 785 schools, 793 health facilities and 192 police stations.

There were ineffective regulations in many areas, and quality of service was another problem. Uncompetitive practices were on the rise, and as the industry was changing it could be expected that this would increase still further, and this emphasised further the need for correct regulatory and funding arrangements.

USAASA obligations had not been met and there was a problem with scarce resources.

Mr Mjwara admitted that pricing for communications was not cheap, partly due to the anti-competitive stance by the operators but also because individual regulations had created these conditions. South Africa was far more expensive than anywhere else, and this was a major issue to be addressed.

He summarised that the main issues for telecommunications were sector regulation, stimulating competition, lowering the price of communication, and stimulating infrastructure investments. There were local ICT manufacturing technology applications, e-government initiatives, and other projects, but with insufficient coordination. ICASA was already acting on the cost of communication, as information society indicators had to be agreed upon, to provide the necessary tools for decision making as the country moved forward. Budgets would be influenced by the indicators. The sector had to transform; although licences were supposed to be issued to 20% of BBBEE companies, the reality was that transformation was no further in this sector than it was in other sectors that had entered their transformation phases even later. The main question was whether the institutional arrangements were ideal. There was discussion on how to manage the numbers, which were limited, and who could access the spectrum, and how universal access and services would be achieved.

Mr Mjwara moved to discuss broadcasting. In the past, this had been used as a direct political tool. He noted the legislation framework and the growth and outlook of the environment, as well as licence projections, what services were available, and whether the infrastructure was accessible. He emphasised the need to reach areas. The research had to consider the question of content and how it had changed; and in this regard he pointed out that the top ten TV shows were all locally produced. The new sector of broadcasters, the community radio stations, must be supported and coverage should be available to all. He summarised the growth of audiences and the stations giving offerings in TV (see attached presentation). The main challenges in broadcasting were the legal and regulatory framework, and review of policies could not be delayed any longer because of the impact upon broadcasting. Internet was the biggest medium for services, so the broadcasting framework must be linked directly to that. There was a need to look closely into SABC, its role in the digital era, its development programming and priorities, services, events of national interest, and funding, governance and structure. If conditions were not created for local content, this would undermine other aspects of the policy.

Mr Mjwara outlined the postal services, setting out a summary of the legislative framework, growth and outlook, infrastructure and global integration. The main policy issues here included the role of the South African Post Office (SAPO), substitute products, SAPO’s integration and involvement in the e-government environment, including its role in getting textbooks delivered, and the public sector’s use of competing postal services. There was a need to decide what kind of infrastructure was needed to enhance government service delivery. There had been considerable spending on infrastructure in the past and there was a need to keep apace of developments. The universal services obligations and role of Postbank must also be considered, as the link between a successful post office and Postbank was strong. Effective sector monitoring and enforcement was necessary as there were more than 2 000 fly-by-night postal services.

Mr Mjwara then moved to discussion on e-services and the need for cyber security, outlining the current legislation and e-government initiatives and the state of e-commerce and global integration. He set out tables of the ranking of South Africa. In the political and regulatory areas, it was ranked (by the World Economic Forum indicators) as amongst the top players in the West, but the ranking dropped much lower in terms of business and innovation measurements (despite having legislation), and use of ICT in delivery services. It was also not ranking well in terms of economic and social impact, because ICT was not being used to deliver services, and this ranking fell even further when considering government service and usage. Regrettably, South Africa was in the top ten in regard to cybercrime. Chapter 2 of the Electronic and Communications Act detailed what had to be done, but not all of this was being taken into account when it came to implementation. Again, this was linked to the role of ICASA, funding, and use of the domain name .za.

Discussion
Ms Kilian said this presentation was very interesting and reinforced matters that had previously come to Members’ attention. She was particularly concerned about cyber security, particularly because people could get access to internet, yet not be aware of the risks, particularly phishing and malware, making them vulnerable to fraud.

Mr Mjwara said that there was work being done on cyber security.

Mr Jabu Radebe, Chief Director, DOC, said that there was establishment of the cyber security hub, which would continue to monitor cyber-security, and that would assist in identifying where to tap into resources. There were collaborative attempts to raise awareness around cyber security issues, including cyber bullying and ATM fraud.

Ms Lesoma commented that Telkom should be looking at how to make itself more relevant, and so should SAPO, for mail and other matters. She agreed that the Committee, as an oversight body, must engage with the Department in a robust and healthy manner, and ensure that the executive was accountable in line with the predetermined objectives.

Ms Muthambi referred to slide 18, outlining the process, and asked for clarity on the two dates of 3 and 24 March. She emphasised the need to consolidate the comment.

Mr Mjwara said that ultimately citizens should be aware of what was being said. The online environment was easier to exploit. Organisations could not wait until policy was settled; the longer this took, the more South Africa would lag behind. The consultation referred to: the written part, for which an extended time frame (to 24 March) had been granted, at the request of many organisations who said that they needed more time to consult and give input. However, DOC would in the meantime also be meeting with industry and associations and members of the public.

Ms Kilian asked about skills development in the sector, and whether there were the necessary skills and institutions capable of supporting such development. South Africa ranked below other African countries, such as Malawi, in terms of preparedness on skills, and she asked if South Africa was too slow into transforming academic qualifications into more practical technological qualifications, and asked how DOC would be engaging with the education sector to ensure that people were trained for the jobs.

Mr Mjwara agreed that there were some skills that South Africa desperately needed to develop.

Ms Ndabeni, Deputy Minister, agreed that there were a number of skills challenges, which was why DOC wanted to fill the vacancies with people capable to drive the agenda. DOC and the parastatals should have an approach whereby those capable of adding real value would be sent out to work on projects and teams. If these skills could not be found internally, then DOC would contract. It was building capacity for the entire government, and needed to guide on how to use ICT in areas of deployment.

The Minister added that the launch should take place in April, after the public hearings.

Broadband presentation
Mr Jabu Radebe, Chief Director, DOC, gave a brief presentation on broadband. The broadband policy was approved by Cabinet in December. Prior to then, the 2010 policy had been reviewed, and the revised version had been gazetted in April, and the DOC had taken into account stakeholder input, meetings, and international symposiums where there had been interactions. The salient issues here included looking at the whole value system of the regulator and its role, as well as policy considerations such as the need to stimulate demand and economic growth. The policy was informed by the Constitution, National Development Plan, and the priorities were linked to ability to stimulate growth.

The purpose of the broadband policy was to have a robust and cost-effective market structure, with mechanisms for coordination between the SOCs and other parties.

SA Connect was a national project that would galvanise the capacity, resources and energy of public and private actors. The policy objectives were to enable investment, efficient public service delivery, public and private enterprise delivery, to build a strong national skills base and create the environment for a vibrant industry.

Turning to slide 9, Mr Radebe noted the definition, and emphasised that this was deliberately broad to take into consideration the whole value chain. By 2020, all South Africans should have access to the services, at a cost of 2.5% or less of the population’s average monthly income. The number of Mbits and range of access would grow incrementally over time, under 2030. A number of strategies, including digital readiness and policy strategies would link. Digital development spoke to leveraging the spend. The digital future spoke to developing and integrating broadband, and the opportunities aspect included development of skills.

Mr Radebe gave more detail on the digital readiness, saying that this included establishing a Broadband Council and institutional capacity, and having an enabling environment through infrastructure build .There were challenges around spectrum and coordination. There was a need for a legal and regulatory framework to enforce policies. Data information and indicators were needed, and this went back to Mr Mjwara’s earlier points about the need for credible and reliable databases. A gap analysis had been done, and the results were set out on slide 13. He stressed that the international connectivity had increased tenfold, but the greatest challenges lay in the access networks. He repeated that about 86% of the population was close enough to fibre nodes but access was still problematic.

He noted that government spend on broadband should be use to leverage infrastructure in all government departments, at quality and rates usable to government. DOC would like to see all departments having 5Mbits, at the earliest opportunity. It would be working with various stakeholders to achieve that, after defining the specific requirements. The next step would be building a digital future through an integrated network taking into consideration the roles of public and private role-players, and dealing with the rationalisation of the SOCs. The network should be based on open access principles and would be accessible to different role-players so that people without their own infrastructure would still be able to play a role at services level, which would hopefully stimulate competition and possibly impact on prices. There was a need to realise digital opportunities, and this related more to addressing supply side skills and demand side skills. Content and applications development was important; countries that were growing were using ICT and government connectivity to a much higher degree, but relevant applications also had to be developed. The last slide (slide 18) looked to the various strategies and what would be done.

Discussion
Ms Shinn focused on the multi-plan entity, noting that the policy spoke to a merged Sentech/Infraco and existing players. She asked what role Telkom would play and if new network operators would be allowed. In the post-Cabinet press conference announcing this policy, it seemed that the Minister was referring to public/private partnerships, at service level. She wondered if that would exclude private networks from being active and ongoing players in the national network.

Mr Kekana wanted to know more about training and skills. He pointed out that many engineers and technicians were in further education, but when they finished, the South African Engineering Council, which was still a white-dominated body, would complain that they were sub-standard and they could not break into the profession. The reason given was that trainees were not gaining on-the-job experience because the white-owned companies would not expose the black graduates to jobs. He asked if there were arrangements to expose trainees to this on-the-job exposure, and for any relevant numbers.

Mr Radebe responded that there were projects that sought to bridge the gap between the skills and their usability in the work environment. There was more focus on on-the-job training. An initiative was due to be launched in this week. It had not finally been decided who should play what role, but certain principles had been put in place to discourage duplications. There would be debates on the extent to which infrastructure would be used.

Ms Morutoa asked what, so far, was expected of broadband policy, and how it could in particular assist in the National Health Insurance, or help other departments to utilise solutions. She said she was asking this because the Western Cape provincial departments always claimed that they were ahead, but she wanted to know the demand.

Mr Radebe said that one of the matters prioritised was the development of the Digital Development Plan. It would place a focus on the connectivity of schools and health centres. DOC was working with the relevant departments to try to determine, within the broad framework, what exactly would need to be prioritised. Nothing had been clearly defined as yet.

Mr Muthambi asked about the postal infrastructure and whether there was a plan to integrate this as part of the broadband, especially in the rural areas.

Mr Radebe said that this was still being defined so he could not answer the question in detail. However, government interventions would be identifying resources that could be made available to infrastructure providers, to hasten the broadband rollout – for instance, a post office with electricity connections could provide facilities for those wanting to erect masts. SAPO, although its role was not clearly defined, would certainly have some role to play.

Ms Muthambi said she had raised this point because it was important to boost the role of the Post Office.

The Deputy Minister confirmed that a breakdown of the schools connected, as earlier requested by Ms Muthambi, would be provided, listing the schools in the provinces and the Dinaledi schools. In regard to the upgrades, she said that for two years there would be internet connectivity and upgrades covered by DOC, but on expiry of that period, there would be further engagements on the responsibilities, although it was accepted that DOC, overall, bore the responsibility to ensure the rollout of broadband to everyone. DOC had also considered checking the availability of the Funds in the USAF, but these were still options and no final decisions had been taken.

She added that MOUs had been signed in regard to training of schools connected, and there was other operators who could offer training. It was hoped to create partnerships and see how people could benefit. In regard to training courses, she noted that there were already several courses in different provinces and the DOC planned to extend the offerings, using the newly established universities The FET Colleges were using infrastructure from the universities, and were rolling out some online courses also. In answer to an earlier question from Ms Lesoma, she assured the Committee that there was a relationship already with the FET Colleges, and meetings had been held with the Deputy Minister for Higher Education and Training, with agreements that skills needed to be built at that level.

The Deputy Minister then answered an earlier question as to whether there had been audits of the USAF, and said that annually, audited reports would be obtained in respect of the agencies, and tabled through the Minister to Parliament. There had been some audit queries and the Ministry was overseeing the audit correction process.

The Minister thanked the Committee for raising the questions, which had been valuable, and this input would be incorporated into the process. Ideally, he would have liked to spend a full day discussing the ICT policy on the Green Paper, but once the elections were over, the incoming Minister and Deputy Minister would be handed an exit report from the current executive. He urged everyone to read the Green Paper, and suggested that this would be very useful also for new Committee members in the Fifth Parliament, as it provided an excellent overview of the issues. In regard to broadband, he suggested also that the new Committee should ask for monthly updates, stressing the importance of broadband for economic development.

The Chairperson noted that the Committee had run out of time, and no further questions on the Minister’s update could be entertained. He quipped that he hoped that nobody would question the minutes of this meeting, because everyone was agreed on the importance of all the issues.

Other Committee business
The Chairperson noted that the NCOP had dealt with the Electronics Communications Amendment Bill and the Independent Communications Authority of South Africa Amendment Bill, and the proposals made on the latter would be referred back to this Committee, and would need to be discussed in the following week.

Committee minutes 11 February
Ms Shinn noted that the names of the ICASA delegation needed to be changed: their first names and initials must be indicated, and name spellings and correct titles needed to be checked.

Mr Steyn noted that his suggestion for yesterday’s meeting was not accepted, yet in this minute there was a reference to the very same concerns, about the SABC lack of skills. He suggested that the sentence should rather read: “The Committee noted with concern the lack of competency of senior management, based on the skills audit and therefore expressed their reservations whether the management can turn SABC around”.

Ms Muthambi asked for clarity. She thought that this was changing the content of the minutes.

Ms Shinn pointed out that when the SABC had appeared before the Committee there was much robust debate and there were serious doubts whether the current management was capable of correcting the audit queries. She agreed with Mr Steyn that the minutes did not seem an adequate reflection of what the Committee had discussed. The Committee would be neglecting its oversight if the minutes reflected “a minor concern”, because Members had been very concerned about the issues.

Ms Lesoma said that she had the same comments as the previous day. (The remainder of her comment was inaudible).

The Chairperson noted that paragraph 2.2 of these minutes was dealing with the correction of the minutes of 4 February. This Committee was concerned at the lack of competence. However, if in fact the Committee did not express what Mr Steyn had suggested, at that meeting, then this was not a correction, but a re-creation of the issues.

Mr Steyn agreed on the principle, but insisted that the phrase “lack of competence” must be inserted.

The Chairperson noted that the Committee was supported by support staff. He proposed that the Committee adopt the minutes, with Mr Steyn’s correction of “lack of competence” and said if Members felt that the minutes were not up to scratch, then this matter should be referred to the Committee section. He agreed that the Committee should not be spending so much time at every meeting correcting the minutes.

The minutes were adopted, subject to the corrections.

The meeting was adjourned.