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[2016] ZAGPPHC 883
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Minister of Telecommunications and Postal Services v Acting Chair, Independent Communications Authority of South Africa and Others; Cell C (Pty) Ltd v Acting Chair, Independent Communications Authority of South Africa and Others and Others (2016/59722, 2016/68096) [2016] ZAGPPHC 883 (30 September 2016)
THE
HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
REPORTABLE
CASE
NO 2016/59722
IN
THE MATTER BETWEEN:
MINISTER
OF TELECOMMUNICATIONS AND POSTAL SERVICES APPLICANT
AND
ACTING
CHAIR, INDEPENDENT COMMUNICATIONS AUTHORITY
OF
SOUTH AFRICA
FIRST
RESPONDENT
INDEPENDENT
COMMUNICATIONS AUTHORITY
OF
SOUTH
AFRICA SECOND
RESPONDENT
VODACOM
(PTY)
LTD
THIRD RESPONDENT
MTN
(PTY) LTD
FOURTH RESPONDENT
NEOTEL
(PTY) LTD
FIFTH RESPONDENT
TELKOM
SOC
LTD
SIXTH RESPONDENT
CELL
C (PTY)
LTD
SEVENTH RESPONDENT
CASE
NO 2016/68096
IN
THE MATTER BETWEEN:
CELL
C (PTY)
LTD APPLICANT
AND
ACTING
CHAIR, INDEPENDENT COMMUNICATIONS AUTHORITY
OF
SOUTH
AFRICA FIRST
RESPONDENT
INDEPENDENT
COMMUNICATIONS AUTHORITY OF
SOUTH
AFRICA SECOND
RESPONDENT
MINISTER
OF TELECOMMUNICATIONS AND
POSTAL
SERVICES THIRD
RESPONDENT
MINISTER
OF
COMMUNICATIONS FOURTH
RESPONDENT
MOBILE
TELEPHONE NETWORKS (PTY) LTD
SIXTH RESPONDENT
TELKOM
SA SOC LTD
SEVENTH
RESPONDENT
NEOTEL
(PTY) LTD
EIGHTH
RESPONDENT
JUDGMENT
SUTHERLAND
J:
INTRODUCTION
1.
This judgment addresses two applications, both involving the same
parties, save that the Minister of Communications is cited
in one
case but not the other. In the two applications the parties are cited
with different numbers assigned to them, and therefore
to avoid
confusion the parties are called only by their names or their
familiar acronyms.
2.
The applicants in each case, the Minister of Telecommunications (MOD
and Cell C, both desire certain decisions taken by the Independent
Communications Authority of South Africa (ICASA) to be set aside. MOT
has brought a bifurcated application in which it seeks in
part B, a
review of the decision, and in Part A, an interim interdict
suspending implementation of the impugned decision pending
that
review. Only Part A is before this court. Cell C has brought an
application for the identical interim relief, and intends
to bring a
review application in due course.
3.
Not all the cited litigants have participated in the controversy
about interim relief. The active parties are on the one side,
ICASA,
and arraigned on the other side in support of the interim interdict
are MOT, Telkom and Cell C. The remaining parties abide
the outcome
of the application for interim relief but may participate in the
review in due course.
4.
The impugned decision of ICASA is the
invitation
to
apply
(ITA) published on 15 July 2016 to
participate in an auction of rights to use certain bands of radio
frequency spectrum which would
be followed by a licensing by ICASA of
such use to the successful bidders.
5.
The
critique
of
the
ITA
spans
several
grounds.
The
scope
of
the
controversy
includes
whether ICASA is obliged to subordinate its discretion to certain
policy making processes
driven
by
MOT,
and
more
broadly,
by
the
processes
of
the
cabinet
of
the
South
African
Government,
whether
ICASA
has
acted
in
breach
of
its
statutory
obligations
or
certain
promulgated
statutory
policies
and
plans,
in
one
or
more
of
several
ways
and
whether
the
decision
exhibits
irrationality
in
one
or
more
of
several
ways.
During
the
course
of
the run-up
to
the
hearing,
ICASA
by
way
of
amendments
to
the
ITA,
or
clarifications
of
the ITA
resolved certain criticisms about which
no further
comment is necessary.
[1]
6.
The immediate issue is limited to whether the requirements for an
interim interdict have been shown: a prima facie right, albeit
open
to some doubt, a risk of irreparable harm if interim relief is not
granted, an absence of an alternative suitable remedy and
a balance
of convenience in favour of the interdict. As regards interim relief
pending reviews, in
Pikoli v
President, RSA 2010 (I)
SA 400 (GP) at 404
it was said by Du Plessis J:
'The
requirements for an interim interdict are well established and I
shall in due course deal with each of them. More in general,
one of
the aims of an interim interdict is to preserve the status quo
pending the final determination of the rights of the parties
to
pending litigation. The interim interdict does not involve a final
determination of the parties' rights and it does not affect
such
final determination. When considering whether to grant or refuse an
interim interdict, the court seeks to protect the integrity
of the
proceedings in the main case. The court seeks to ensure, as far as is
reasonably possible, that the party who is ultimately
successful will
receive adequate and effective relief. The court itself has an
interest to ensure that it will ultimately be in
a position to grant
effective relief to the successful party. For reasons that will
appear in due course, the issues in the main
application and also in
this application are constitutional issues. In such cases the court
considering whether to grant or refuse
an interim interdict must also
bear in mind that the courts have a constitutional obligation to
uphold the Constitution and to
'declare that any . . . conduct that
is inconsistent with the Constitution is invalid to the extent of its
inconsistency'. The
court must also bear in mind that not only the
parties but society as a whole have an interest in upholding the
Constitution and
that relief in cases of constitutional breaches must
vindicate the Constitution. As a first requirement, the applicant had
to show
that he has at least a prima facie right, though it might be
open to some doubt, to the relief he seeks in the main application,
that is, to review and set aside the decision to remove him from
office. In other words, the applicant had on a prima facie basis
to
prove facts that establish that his removal from office was unlawful
and therefore subject to be reviewed and set aside.'
7.
In addition, as regards the interdicting of a body exercising
statutory authority, ever since
Gool
v
Minister
of
Justice
1955 (2)
SA
682
(C)
at
688F
–
689C
[2]
the
approach
of
a
court has
been
to
require
a
higher
threshold
of
a
strong
case
and
exceptional
circumstances
to be
shown
where
the
exercise
of
powers
sought
to
be
interdicted
is
not
alleged
to
have been
exercised in
bad faith.
Moreover,
in
National
Treasury
v
Opposition
to Urban Tolling Alliance
(OUTA)
2012 (6)
SA
223
(CC) at [44]
it
was held that sensitivity to the doctrine
of
separation
of
powers
should
be
added
to
the
scope
of
the
factors
that
incline
a court
to
acute
circumspection
before
inhibiting
a
statutory
body
from
fulfilling
its
role.
I do
not
understand
the
judgment to
materially
affect
the
test,
but
rather
it
requires
of
a court to
reflect consciously about the implications of judicial and executive
powers
clashing,
a
circumstance
which
although
an
occupational
hazard
of
organs
of
state,
is
to
minimised.
8.
I
CASA,
a
statutory
body,
and
a
Chapter
9
institution,
[3]
is
such
a
body
as
contemplated
by these
authorities.
THE
CONTEXT OF THE CONTROVERSY
9.
The parties have marshalled a substantial body of material relevant
to the controversy. I offer a succinct account of what is
pertinent
to the decision about interim relief.
10.
Our
everyday experience of telecommunications
in the form
of radio, television, internet
and
cellular
telephones,
and
so
on,
is
made
possible
by
the
service
providers
utilising
a portion
of the radio frequency, which exists naturally, to transmit
electronic signals. The radio
frequency
spectrum,
like
water
and
electricity
is
a
crucial
dimension
of
social
life.
Access
to
the
utility
of the
frequency
spectrum
implicates
the
optimal
achievement
of several
constitutional values and rights, including the freedom of trade,
modem education and the dissemination of information
pursuant to
freedom of expression. Achieving effective
access
to
its
utility
implicates
equality
too
because
of
its
role
in
facilitating
these
several
rights.
[4]
The
regulatory
regime
owes,
as
alluded
to
earlier,
in
part,
its
lineage
to
the
Constitution.
Accordingly, radio frequency spectrum is a
highly
regulated affair because of
its
scarcity
and
critical
role
in
the
communications
industry
and
the
importance,
in
tum, of
that
industry
to
modem
economic
and
social
activity.
11.
This resource is optimally usable when a single provider has
exclusivity over a band of the frequency spectrum; were it otherwise,
transmissions would overlap and render the communications network
incoherent and unreliable. Spectrum bandwidth is finite
and is
the object of keen competition by service providers. The spectrum is
therefore 'allocated' to various uses in three regions
world-wide by
the International Telecommunications Authority (UTA) of which South
Africa is a member and locally is allocated by
MOT in the radio
frequency plan. ICASA is responsible for licensing its use and in
that context assigning bandwidth.
12.
Two statutes regulate the usage of radio frequency: the Independent
Communications Authority Act 13 of 2000 (the ACASA Act),
and the
Electronic Communications Act 36 of 2005 (ECA). Each was most
recently amended by Acts 1 and 2 of 2014. Together they are
the
statutory foundation for the regulatory regime.
13.
Under the provisions of these statutes !CASA was created and
both it and MOT are accorded roles in the regulation of
telecommunications. Discerning their relationship and respective
powers is among the controversies in this matter.
14.
For several years, especially since from about 2010, when the initial
ITA in draft form was published but withdrawn at the request
of MOT,
the potential expansion of access to bandwidth has been under
consideration. For one or other reason, there have been delays
in MOT
expediting development, much to the irritation of all concerned, not
excluding the consumers.
15.
The immediate dispute was triggered on 15 July when! CASA issued the
ITA. It had been preceded by an information memorandum
on 9 September
2015, though the terms of each differ slightly. The opposing parties
all criticise the decision to publish the ITA.
Whether these
criticisms are valid is the issue which the review court shall decide
finally. The interim relief is aimed at holding
up the process
initiated by the ITA on the grounds that irreparable harm is likely
to be suffered were the decision to be later
set aside.
16.
A careful examination of exactly what harm can arise and to whom,
which can reasonably be characterised as 'irreparable', is
necessary.
The foundation for that idea is that, by its very terms, the ITA sets
in motion a process of receiving applications
from interested service
providers who must meet certain criteria to be eligible for selection
to participate in an auction of 4
designated lots of spectrum
bandwidth, after which, the successful bidders shall be issued
licences by !CASA, to which are attached
various conditions, some
very onerous. The critical proposition is that should this process
progress, as envisaged by the ITA,
and the review court sets the ITA
aside, immense prejudice shall eventuate to the industry actors who
choose to participate or
indeed, if the ITA is not set aside, the
industry actors who choose not to participate shall suffer immense
prejudice, constituting
irreparable harm, thus, warranting the
interim interdict. The peculiarity of these circumstances are
pertinent to the application
of the rule in
Gool,
referred to
above.
17.
What then is the culpable conduct ostensibly committed by ICASA and
the consequences that might wreak such harm, is the issue
for
decision in these proceedings.
THE
ESSENCE OF THE CONTROVERSIES
18.
The principal allegations are:
18.1.
!CASA may not lawfully issue the ITA until it has considered MOT's
policy, at present in the form of a white paper
before
the cabinet.
18.2.
The ITA contradicts the 2013 radio frequency plan which makes it
unlawful.
18.3.
The ITA fails to meet statutory obligations to promote competition,
and is indeed anti-competitive.
18.4.
The ITA is irrational in certain respects.
19.
The principal defences advanced by ICASA to these criticisms are
these:
19.1.
ICASA is independent and the MOT is out of order in demanding
deference to a draft policy.
19.2.
The delays by MOT hitherto are no longer tolerable.
19.3.
The ITA is not in violation of the radio frequency plan.
19.4.
The few valid criticisms of the ITA can be (and have been) remedied
by amendments or 'clarifications' to the ITA.
19.5.
No irrationality is shown to afflict the ITA.
19.6.
No irreparable harm is shown to exist, should an interdict be
refused.
19.7.
No strong case or exceptional circumstances have been shown to exist.
20.
In my view, the case turns on the three major issues, ie, (1) the
alleged pre-emption of the MOT's new national policy,
(2) alleged
non-compliance with the radio frequency plan, and (3) the risk of
anti-competitive attributes contaminating the ITA.
A fourth issue is
founded on the criticism that the ITA consists in part of
technological demands of industry actors that are irrational,
an
issue which is distinct in kind from the other issues.
A
PRIMA FACIE RIGHT
Can
ICASA lawfully issue the ITA before applying its mind to MOT's
'imminent' policy.
The
legislative framework
21.
It is necessary, at the outset, to traverse the statutory framework
.!CASA is described in section 2 of the! CASA Act
as an 'independent
Authority' which, inter alia, is mandated to:
'regulate
electronic communications in the public interest,'
Section
3(3) states that CASA:
'is
independent and subject only to the Constitution and the law and must
be impartial and must perform its functions without fear,
favour or
prejudice'.
Section
3(4) states that ICASA:
'must
function without any political or commercial interference'.
[5]
22.
There is a difference of opinion about the import of section 3(3) as
regards the circumscription of ICASA's independence. The
section
provides:
'No
policy made by the Minister in terms of subsection (1) or policy
direction issued by the Minister in terms of subsection (2)
may be
made or issued regarding the granting, amendment, transfer, renewal,
suspension or revocation of a licence, except as permitted
in terms
of this Act.
Does
this section relate to a given specific licence or does it apply
generically? In other words is this simply a safeguard against
a bill
of attainder, or a restriction on the general powers of MOT, in
effect cautioning MOT to keep a distance. Perhaps the point
is to
restrict MOT's section 3 power to formulate policy within the ambit
of the statute? If so, why say something so obvious?
Alternatively,
it is argued the use of 'a' points to the aim being to eliminate the
risk of victimisation. I am inclined to agree
with the latter
construction, although, in my view, it is unnecessary to decide that
point definitively for the purposes of this
case, because on either
view, MOT is constrained in the use of section 3 powers.
23.
Despite these sweeping provisions about independence, it is plain
that the decisions that ICASA may make are, in certain
important
respects, circumscribed,
as to process,
although its
substantive decisions are not subordinated to any other statutory
authority. Section 4(1) of the ICASA Act, perhaps
over-cautiously,
(and reminiscent of section 3(3) of ECA about the limits of MOT's
powers) articulates the self-evident constraint
that ICASA is to:
'....(a)
exercise the powers and perform the duties conferred and imposed upon
it by this act, the underlying statutes and any other
applicable
law',
and
provides further that:
'(c)
subject to section 231 of the Constitution, [ICASA] must act in a
manner that is consistent with the obligations of the Republic
under
any applicable international agreement'.
Within
that ambit, in terms of section 4(3)(c) of the ICASA Act:
'[ICASA]
must control plan administer and manage the use and licensing of the
radio frequency spectrum in accordance with bilateral
agreements or
international treaties entered into by the Republic.'
All
of this, though significant, is fairly generalised. Indeed, the real
meat of what is to be done and how it is to be done is
in ECA.
24.
Both the ICASA Act and ECA have provisions which state that the
statute prevails over all other legislation; ie sections 24
and 94
respectively. Section 94 of ECA omits reference to postal services.
ECA is a later enactment. In my view, it ought to trump
the ICASA
Act;
ergo:
ECA prevails over the! CASA Act in the case
of any conflict or contradiction.
25.
Section 20) of ECA includes the statement that among the primary
objects of the statute is to 'provide a clear allocation of
roles and
assignment of tasks between policy formulation and regulation within
the ICT sector'. (Emphasis supplied)
26.
There are several concrete examples of the process constraints on
ICASA in the provisions of the ECA, in which statute
the roles
and powers of MOT and of ICASA are set out in some detail. This
matter is concerned with the powers of ICASA and MOT
respectively in
respect of licensing radio frequency. The apportionment of their
respective powers in this respect are not identical
to their
relationship in respect of other subject matter regulated by ECA. For
example, it is notable that section 3(l)(e), provides
that it is
within the remit of MOT to issue 'guidelines for the determination by
[ICASA] of licence fees and spectrum fees associated
with the award
of the licences ....'Also section 5(6) reserves to MOT the power to
circumscribe how ICASA deals with individual
electronic network
licences. These provisions assign to MOT, rather than to ICASA, a
power to make a substantive decision in respect
of the work ICASA is
enjoined to perform, but they have nothing to do with radio frequency
spectrum regulation.
27.
In the field of radio spectrum regulation, MOT is, not surprisingly,
pursuant to section 34(1) of ECA, the state's link to international
agreements and obligations. This is quite important because the
latitude to decide anything domestically cannot prudently be
undertaken
before looking over our shoulder to check whether it is
compatible with what the rest of the world is doing. Moreover,
section
231 of the Constitution compels compliance with our
international agreements.
28.
Domestically, section 3(1) of ECA empowers MOT to:
'make
policies on matters of national policy applicable to the ICT sector
consistent with the objects of [ECA] and of related legislation.'
Importantly,
in section 3(l)(a) 'radio frequency spectrum' is first on the list of
topics.
29.
On the cardinal matter of the frequency spectrum plan, section 34
regulates how MOT and ICASA are to work with one another
and has a
lot to say about MOT's role in relation to ICASA and vice versa:
'Radio
frequency plan
(1)
The Minister, in the exercise of his or her functions, represents the
Republic in international fora, including the ITU,
in respect of-
(a)
the international allocation of radio frequency spectrum;
(b)
the international coordination of radio frequency spectrum usage; and
(c)
the co-ordination and approval of any regional radio frequency
spectrum plans applicable to the Republic, in accordance with
international treaties and multinational and bilateral agreements
entered into by the Republic.
(2)
The Minister
must
approve the national
radio
frequency plan developed
by
the Authority,
which must set out the specific
frequency
bands
designated
for
use by particular
types of services, taking
into account the radio
frequency
spectrum
bands
allocated to the security
services.
3)
The Authority must assign radio
frequencies
consistent
with the national
radio frequency plan
for the use
of radio frequency spectrum by licence holders and other services
that may be provided pursuant to a licence exemption.
(4)
The Authority must, within 12 months of the coming into force of this
Act, prepare the national radio frequency plan or
make appropriate
modification to any existing radio frequency plan to bring it into
conformity with this Act.
(5)
The national radio frequency plan must be updated and amended when
necessary in order to keep the plan current. When updating
and
amending this plan due regard must be given to the current and future
usage of the radio frequency spectrum.
(6)
The national radio frequency plan must-
(a)
designate the radio frequency bands to be used for particular types
of services;
(b)
ensure that the radio frequency spectrum is utilised and managed in
an orderly, efficient and effective manner;
(c)
aim at reducing congestion in the use of the radio frequency
spectrum;
(d)
aim at protecting radio frequency spectrum licensees from harmful
interference;
(e)
provide for flexibility and the rapid and efficient introduction of
new technologies;
(f)
aim at providing opportunities for the introduction of the widest of
services and the maximum number of users thereof as is
practically
feasible.
(7)
In preparing the national radio frequency plan as contemplated in
subsection (4), the Authority must-
(a)
take into account the ITU's international spectrum allocations for
radio frequency spectrum use, in so far as ITU allocations
have been
adopted or agreed upon by the Republic, and give due regard to the
reports of experts in the field of spectrum or radio
frequency
planning and to internationally accepted methods for preparing such
plans;
(b)
take into account existing uses of the radio frequency spectrum and
any radio frequency band plans in existence or in the course
of
preparation; and
(c)
consult with the Minister to-
(i)
incorporate
the radio frequency spectrum allocated
by
the Minister
for the exclusive use of
the security services into
the national
radio
frequency plan;
(ii)
take account of the government's current and planned
uses
of the radio frequency spectrum, including but not limited to. civil
aviation, aeronautical
s
ervices
and scientific research;
and
(iii)
co-ordinate a
plan for
migration of
existing users, as
applicable,
to make
available
radio
frequency
spectrum to
satisfy the requirements
of
subsection
(2)
and the
objects
of this
Act and of the related
legislation.
(8)
The Authority must give notice of its intention to prepare a national
radio frequency plan in the Gazette and in such
notice invite
interested parties to submit their written representations to the
Authority within such period as may be specified
in such notice.
(9)
The Authority may, after the period referred to in subsection (8) has
passed, hold a hearing in respect of the proposed
national radio
frequency plan.
(10)
After the hearing, if any, and after due consideration of any written
representations received in response to the
notice mentioned in
subsection (8) or tendered at the hearing, the Authority must forward
the national radio
frequency plan
to the Minister
for approval.
(11)
The Minister must, within 30 days of receipt of the national radio
frequency plan, either approve the plan, at
which time the plan must
become effective, or notify the Authority that further consultation
is required.
(12)
Upon approval of the national radio frequency plan by the Minister,
the Authority must publish the plan in the
Gazette.
(13)
Any radio frequency plan approved in terms of this section and all
the comments, representations and other documents
received in
response to the notice contemplated in subsection (8) or tendered at
the hearing must be-
(a)
kept at the offices of the Authority; and
(b)
open for public inspection by interested persons during the normal
office hours of the Authority.
(14)
The Authority must, at the request of any person and on payment of
such fee as may be prescribed, furnish him or
her with a copy of the
radio frequency plan.
(15)
The provisions of subsections (6) to (14) apply, with the necessary
changes, in relation to any amendment made by the
Authority to the
radio frequency plan.
(16)
The Authority may, where the national radio frequency plan identifies
radio frequency spectrum that is occupied
and requires the migration
of the users of such radio frequency spectrum to other radio
frequency bands, migrate the users to such
other radio frequency
bands in accordance with the national radio
frequency plan, except
where such migration involves
governmental entities or
organisations, in
which case the Authority-
(a)
must
refer
the
matter
to
the
Minister;
and
(b)
may migrate the users after consultation with the Minister.'
(Emphasis added)
30.
In my view, section 34 of ECA demonstrates amply that! CASA is bound
to important
process-bound
constraints
before it
can make its decisions about frequency spectrum, and must, as is
plain, procure from MOT an approval of the plan. Similarly,
MOT can
only approve a plan put forward by ICASA. There is no room to
contemplate a free hand has given to either MOT or ICASA
in any
aspect of the policy making on this topic. MOT is the ultimate
gatekeeper on policy, but cannot
formally
initiate any
proposal, a task reserved for CASA.
31.
By contrast, section 3, to which reference was earlier made when
introducing the topic of regulation of frequency spectrum,
deals with
the composition by MOT, after soliciting views from the public and
after a compulsory consultation with ICASA, of
national
policy.
However ,ICASA in regard to this policy,
has merely
a
duty
to
take
it
into
account
when
considering its own decisions.
'(1A)
The Minister may, after having obtained Cabinet approval, issue a
policy direction in order to-
(a)
initiate and facilitate intervention by Government to ensure
strategic ICT infrastructure investment; and
(b)
provide for a framework for the licensing of a public entity by the
Authority in tenns of Chapter 3.
(2)
The Minister
may,
subject
to
subsections
(3)
and
(5),
issue to the Authority
or. subject
to
subsection
(5),
issue to the Agency
policy
directions
consistent
with the
objects of this Act. national
policies
and
of the related
legislation
in
relation to-
(a)
the
undertaking
of an inquiry
in terms of
section 4B of the ICASA Act on any matter within the Authority's
jurisdiction and the submission of reports to the
Minister in respect
of such matter;
(b)
the
determination
of priorities
for the
development of electronic communications networks and electronic
communications services or any other service contemplated
in Chapter
3;
(c)
the consideration of any matter within the Authority's or Agency's
jurisdiction reasonably placed before it by the Minister
for urgent
consideration;
(d)
guidelines for the determination by the Authority of spectrum fees;
and
(e)
any other matter which may be necessary for the application of this
Act or the related legislation.
(3)
No policy made by the Minister in terms of subsection (1) or policy
direction issued by the Minister in terms of subsection
(2) may be
made or issued regarding the granting, amendment, transfer, renewal,
suspension or revocation of a licence, except as
permitted in terms
of this Act.
(4)
The Authority
or the Agency,
as the
case may be. in exercising
its powers
and
performing
its duties in terms of this Act and
the related
legislation must
consider
policies
made by the Minister
in terms
of subsection
Cl
) and policy
directions
issued
by the Minister
in
terms
of subsection
(2)
.
(5)
When issuing a policy under subsection (1) or a policy direction
under subsection
(2)
the Minister-
(a)
must consult the Authority or the Agency, as the case may be; and
(b)
must, in order to obtain the views of interested persons, publish the
text of such policy or policy direction by notice in the
Gazette-
(i)
declaring his or her intention to issue the policy or policy
direction;
(ii)
inviting interested persons to submit written submissions in relation
to the policy or policy direction in the manner specified
in such
notice in not less than 30 days from the date of the notice;
(c)
must publish a final version of the policy or policy direction in the
Gazette.
(6)
The provisions of subsection (5) do not apply in respect of any
amendment by the Minister of a policy direction
contemplated in
subsection (2) as a result of representations received and reviewed
by him or her after consultation or publication
in terms of
subsection (5).
(7)
Subject to subsection (8),
a policy
direction issued
under
subsection
(2) may be
amended,
withdrawn
or
substituted
by
the Minister.
(8)
Except in the case of an amendment contemplated in subsection (6),
the provisions of subsection (3) and (5) apply,
with the necessary
changes, in relation to any such amendment or substitution of a
policy direction under subsection (7).
(9)
The
Authority
may
make
recommendations
to
the
Minister
on
policy
matters
in accordance with the objects of this Act.
(10)
If it is reasonable and justifiable in the circumstances, as
contemplated under the Promotion of Administrative Justice
Act, 2000
(Act 3 of 2000), the Minister may depart from the time period
specified in subsection (5) (b) (ii).'
(Emphasis
supplied)
32.
There is no room to doubt that pursuant to these provisions ICASA
must 'consider' whatever MOT puts up whether in the form of
national
policy or a policy direction, an obligation repeated in section 4(3A)
of the !CASA ACT. In addition, in terms of section
4(2)(a) of the
ICASA Act, !CASA is authorised to make policy recommendations to
MOT. Failure by ICASA to consider MOT's
proposals or policies is
plainly at odds with the statute. Nonetheless, MOT's substantive
ideas in such a policy plainly do not
bind ICASA, who owes them no
deference. In addition to MOT formulating national policy it may also
issue policy directions in terms
of section 3(2) including the
conducting of an enquiry as contemplated by section 4B of the! CASA
Act in which! CASA 'may' (not
must, in this example) conduct
enquiries consistent with the statute. In such instances too,
ICASA is not bound to act on
the direction but must merely consider
it. It seems to me that the effect of these provisions is simply to
compel each party to
be open to the ideas of the other.
33.
ICASA is allotted the 'task' of licensing radio frequency spectrum in
section 31 of ECA. In that realm it operates on
its own without
reference to MOT. Section 31(3) and (4) make that plain:
'(3)
The Authority may, taking into account the objects of the Act,
prescribe procedures and criteria for-
(a)
radio frequency spectrum licences in instances where there is
insufficient spectrum available to accommodate demand;
(b)
the amendment, transfer, transfer of control, renewal, suspension,
cancellation and withdrawal of radio frequency spectrum licences;
and
(c)
permission to assign, cede, share or in any way transfer a radio
frequency spectrum licence, or assign, cede or transfer control
of a
radio frequency spectrum licence as contemplated in subsection (2A).
(4)
The Authority may amend a radio frequency spectrum licence-
(a)
to implement a change in the radio frequency plan;
(b)
in the interest of orderly radio frequency spectrum management;
(c)
to effect the migration of licensees in accordance with a revised
radio frequency plan or the transition from analogue to digital
broadcasting;
(d)
if requested by the licensee concerned to the extent that the request
is fair and does not prejudice other licensees; or
(e)
with the agreement of the licensee.'
34.
Among other obligations on ICASA, of importance in this case, is
section 67 which addresses the duty on! CASA to promote competition
in the ICT sector. Its provisions are the subject of later
examination in relation to whether ICASA has complied with its
duties.
The relevant point to be made at this juncture is that ICASA
is directed to perform this function without reference to MOT.
The
controversy
35.
If a plausible basis exists to claim that ICASA is in breach of any
of these process-bound injunctions, ICASA has, prima facie,
acted
unlawfully. I tum to the allegations of breach.
36.
MOT's main grievance is that a new national policy is imminent, a
fact of which ICASA is well aware having given input to the
development thereof. MOT claims that it is unlawful to issue an ITA
which shall be overtaken by the new national policy and which
shall
risk incongruence. The related grievance is that on two occasions MOT
issued a policy directive to ICASA to conduct enquiries
into the
competition attributes of the ICT sector which has been ignored by
ICASA.
37.
ICASA's answer is not to deny incongruity may result from a later
policy publication. Rather ICASA says it does not affect its
legal
obligations, because it is not obliged to subordinate itself to the
substance of any such policy anyway; and moreover, its
duty is to
consider policy that actually exists, not wait upon a promised policy
which may be years in the making.
38.
The point to answer is that by ignoring the 'imminent' publication of
a new national policy, ICASA cannot apply its mind thereto
because
pre-empting the publication of the policy with full knowledge that it
is imminent is tantamount to circumventing the obligation
to give
attention to what that policy has to say. This conduct has been
described
as a 'disabling' of itself to comply with future duties. ICASA's
riposte is to say that the obligation is limited to applying
its mind
only to policy that has been published
at the
time
a
decision
is
made.
Can this be correct? Moreover, on such a view, immediately the
new policy is published, ICASA must, in any event, consider it and
must face the prospect of concluding, on prudent grounds, to make
material alterations which may upset the plans to which industry
actors might have already become committed.
39.
As to the policy directive, as I understand ICASA's stance, its view
is that it was superfluous to suggest to it to perform
what section
67(4) requires it to do anyway, but independently of that formality,
the policy direction was noted and MOT was informed
that such
enquiries were taking place.
40.
Can a purposive construction of the statutes yield an understanding
that there is an implied duty on ICASA of co-operation
with MOT and
vice
versa?
If so, can that imply that a
draft policy which MOT says is imminent, obliges deference to that
process?
Deference
to
the
process
does
not
necessarily
imply
deference
to
MOT.
MOT
and
ICASA
have,
at
most,
a
co-governance
relationship,
not
a
hierarchical
one.
[6]
41.
Moreover, as to the alleged 'imminence' of MOT's new national policy,
there is no suggestion MOT is untruthful, even though
scepticism,
based on past performance of protracted delay and unfulfilled
promises is understandable. ICASA states it has
been waiting
since 2010, six years ago, for the plethora of incumbents of the
office of MOT to produce a policy to consider, whilst
the need to
licence more bandwidth has become ever more pressing. MOT suggests
the wait has not been that long, but this is an
irrelevant quibble.
MOT makes no attempt to explain or justify the delay or hint as to
the likely substance that might make further
delay justifiable, nor
can MOT offer a likely date for publication. At what point is a
responsible body whose functions are to
be discharged in the public
interest to say that no further waiting is tolerable?
42.
Moreover, paradoxically, on the facts as deposed to by MOT, ICASA is
fully versed in the contents of the White Paper which is
said to soon
be before the cabinet for consideration. In giving its views to MOT,
it has indeed considered what is proposed. If
the policy truly is
imminent, the likelihood of material change is slim. If the
'imminence' is another chimera as, in the past,
it has been so many
times, ICASA shall have nothing to consider within a reasonable time,
by anyone's standards.
43.
This traverse of the these various factors yields the conclusion that
the interpreter has to work quite hard to read into the
statutes a
set of reciprocal obligations to set up a relationship of
co-dependence.
Further, in my view, a duty to wait for
MOT's policy is tenable only in a relationship of co-dependence.
44.
The provisions of the statutes can indeed support a construction that
implies a duty to co operate as part of a rational
approach to
the duty to consider any of MOT's policies, and vice versa, a duty on
MOT to co-operate to facilitate! CASA fulfilling
its mandate. But
that interpretation does not, necessarily, lead on to a compulsion to
defer to each other's preferences; were
it to be so, the references
to the independence of ICASA would be waffle.
45.
Moreover, Industry Actors are subject to the occupational hazard of
policy changes and they enjoy the opportunity to make submissions
at
the formulation stages. Plainly, their rights vest in accordance with
any existing policy at the time they acquire any such
rights, and if
better opportunities only emerge after a later policy change or
strategic advantages are perceived only after policy
changes, those
outcomes seem to me to be simply the obvious facts of life in respect
of which there is no substance to a complaint.
46.
A simpler and more obvious interpretation is that CASA must function
within
existing
policy, consider
existing
national
policy and
existing
policy directives. Whenever a new
policy is published by MOT the duty arises
then
to
consider what adaptations, from then onwards, if any, are
appropriate, and whenever an amendment is made, then again, so on and
on, forever. Married to that, is the point emphasised in the argument
on behalf of ICASA that the statutes compel action on the
part of
ICASA, eg, the word 'must' appears in respect of injunctions to act
and that must mean more than a discretion to act or
not. The failure
to act in this way shall result in a paralysis of action, well
evidenced by the 6 years of dithering by MOT, which
ICASA has
hitherto indulged. I agree.
47.
Of course, there may be many sound reasons to have adopted a more
accommodating stance to MOT's preferences, but a refusal cannot
be
elevated to a reviewable irregularity. The most prominent example
addressed in the debate is the expectation that the White
Paper, that
is to say, the proto-policy, shall be profound and heralds
significant innovations for the future of the Information
and
Communications Sector (ICT sector). That prognostication is
unsubstantiated by anything concrete in these papers, but it is
unquestionable that such expectations have been deliberately
cultivated by MOT, and moreover, objectively there is a crying need
for these expectations to be fulfilled.
However,
the merits of the white Paper are, in truth, beside the point. It is
ICASA's judgment call to make whether or not to wait
or to proceed.
48.
In addition to the several considerations already mentioned is the
further fact of lCASA's status as a chapter 9 Institution.
The
appropriateness of all such bodies being able to enjoy the power to
choose to defy the executive government in defence of their
independence is no small matter, and warrants endorsement as a
necessary condition of diffused power in the democratic order founded
on our Constitution. Such bodies are entitled not to be
second-guessed by a court on the wisdom of any such defiance,
provided
they stick to the limits of their statutory powers.
Conclusion
49.
In summary therefore, ICASA's duty to co-operate with MOT, whatever
the reach of that duty may be, is confined to existing
policies and
the law. In my view, no cogent argument is shown why a court should
trump ICASA's choice not to wait indefinitely
for a MOT policy to see
the light of day.
IS
THE
2013 NATIONAL RADIO FREQUENCY PLAN
VIOLATED
BY THE
ITA?
50.
The radio frequency plan of 2013, prepared by ICASA and approved by
MOT, presently in force, regulates the allocation of various
spectra
to various uses. The uses include mobile telecommunications,
broadcasting, security communications and so forth. The spectra
in
issue, the ranges described as 700mhz, 800mhz, and 2.6ghz are
allocated to several different usages of which one is mobile use.
51.
The complaint, in simple terms, is that the bandwidth in issue, is
not available for
exclusive assignment
to mobile networks
under the current terms of the radio frequency plan, and the radio
frequency plan must be amended to allow exclusive
allocation.
Moreover, independently of the validity of such an exclusive
assignment, such assignment cannot occur until after
the
migration out of those bandwidths of present non mobile network
operators, which exercise has yet to be costed and needs
a MOT
decision for the switch-over date. Therefore, the notion of ICASA
that it can lawfully assign the whole of this bandwidth
to mobile
networks is wrong, but even if it could do so lawfully, it cannot
give access to the bandwidth because broadcasters are
still occupying
parts of the spectrum.
52.
ICASA
says
that
no
amendment
to
the
plan
is
necessary
to
facilitate
the
immediate
assignment of bandwidth in these frequency ranges exclusively to
mobile operators. Both the
allocation
of
spectrum by
UTA,
and
the
allocation
in
the
South
African
frequency
spectrum
plan,
permit
multiple
uses,
including
mobile.
[7]
Th
e
jargon
in
use
is
that
some
spectra
are
allocated
'exclusively'
for
one
particular
kind
of
usage
and
other
spectra
are
allocated
for
multiple
uses
on
a
'co-primary'
basis. Ina
spectrum
where
the
allocation
is
a
number
of
co-primary
usages,
it
is
ICASA's
stance
that
it
can
assign
bandwidth
to
one or
more
operators
for
one
or
more
usages,
and
that
it
may
also
choose
to
assign
spectrum
only
to
one
type
of
operator,
eg
mobile,
to
the
exclusion
of
other
types
of
operators
The fact
of
allocation
of
spectrum
for
non-mobile
usage
does
not
mean
that
non-mobile
operators have a right to demand an assignment.
53.
As
cited
above,
section
31
(3)
and
(4)
of
ECA
empowers
ICASA
to
migrate
operators
out
of
a
spectrum
by
changing
the
terms
of
the
licence.
Moreover,
ICASA
is
further
empowered
to effect such
migrations
in terms of the Frequency Migration Regulations.
[8]
Obviously
there are
process
protections for the affected parties.
54.
MOT's apparent view is that the co-primary allocations inhibit the
assignment
exclusively
to mobile users. The suggestion by MOT
that ICASA concedes that it cannot assign 100% of the spectrum
now
to mobile users is a misreading of the allegation in ICASA's
affidavit.
55.
ICASA's view is that the fact that a revision of the radio frequency
plan is appropriate to make it impermissible, in
future, to assign
any part of this spectrum to any user other than mobile is not a
reason to regard assignments exclusively to
mobile operators, before
that time, as irregular. The World Radio Conference 2012 has decided
to allocate the 700 Mhz exclusively
to mobile. South Africa shall
have to consider an amendment to our plan correspond with that
decision. Section 34(7) regulates
that and prescribes a process
involving public participation. As to the other bands, ICASA's view
is that it is consistent with
international decisions to amend the
plan to reserve all of it for mobile. This view seems to be correct.
56.
In my view, the true locus of the controversy is confined to the
implications flowing from the presence of non-mobile
operators, at
present assigned space in the spectrum. Whether those parts of the
spectrum already assigned to non-mobile services
can be assigned, or
perhaps, 're-assigned' to mobile operators before and until the
current non mobile operators are migrated
out of the spectrum,
even though, in the interim deferring effective access to the 'new'
mobile assignees, is problematic. According
to! CASA, the current
non-mobile users occupy a small space in the spectrum and, thus, a
significant amount of space can be accessed
right now and the
remaining space, presently occupied bandwidth by non-mobile operators
can, after the migration, then be accessed
at an unknown future date,
the mobile operators using the interim to gear up for a total roll
out.
57.
Even though
such a conditional assignment, a
s
!
CASA
envisages, shall not (on present information) ostensibly, impact
adversely, on
the present
non-mobile operators who have been
assigned
the
spectrum
and
who
will
continue
to
enjoy
effective
access
for
the
time being,
is
it
appropriate
or
indeed
valid
to
re-assign
on
such
a
basis?
In my
view,
although,
practically,
it
could
be
done,
the
validity
is
indeed
suspect. It
is
uncontroversial
that
the
exercise
of
a
public
power
must
adhere
loyally
to
the
prescripts
under
which
the
power
is
conferred.
[9]
58.
First,
the
concern
is
a
matter
of
interpretation
of
the
plan
and
its
enabling
legislation.
Is
a
're-allocation'
implicated?
Should
the
'allocation'
by
MOT,
for
exclusive
use
by
mobile
operators,
not
precede
a
decision
by
ICASA
to
'assign'
a
licence,
'exclusively'
for
only
one of the eligible usages?
Should the
assignments ICASA contemplates be restricted
only
to
unassigned
spectrum?
Is
such
an
assignment
out
of
kilter
with
the
prescribed
'allocations'?
Second,
should
MOT
not
defer
such
an
amendment
until
a
secure
harbour is
found
for
the
operators
who
are
to
exit
this
spectrum,
especially
given
the
uncertainty
as
to
when
that
can
be
effected?
On
the
facts
at
a
practical
level,
does
it
make sense
to assign
space
in
the
spectrum
that
is,
at
present,
inaccessible
on
the
basis
that
at
a
future
unknown
date,
access
will
be
made
available
when
two
other
happenings
have
to
take place
to
give
effective
access
to
the
newcomers,
ie,
first,
the
migrated
operators
need
to have
another
spot
assigned
to
it
they
have
to
make
do
with
a
reduced
bandwidth
and,
second,
in
terms
of
the
amended
Broadcasting
Digital
Migration
Policy
of
18
March 2015,
[10]
the
analogue-to-
digital
migration
process
is
subject
to
a
switch
off
date
which
is to
be
determined
by
MOT
in
consultation
with
the
cabinet,
a
decision
which
shall
be made
after
a
process
of
engagement
with
the
affected
parties
has
been
concluded
and
is not
expected to be soon. Accordingly, ICASA cannot migrate the current
non-mobile users without MOT's participation and an orderly
process
requires co-ordination between them.
This
gives
rise
to
a
highly
problematic
set
of
circumstances
not
capable
of
being
managed
by
ICASA
on
its
own.
59.
In summary I conclude that, first, the assignment of spectrum already
assigned to other operators is of questionable validity
and secondly,
to assign now and defer access to an unknown future date, which is
dependent on a host of process-dependent happenings
has the look of a
reckless decision and for that reason an irrational decision.
60.
In my view there is a real prospect that the review court could reach
these conclusions. A prima facie case is made out.
HAS
ICASA HAS COMPLIED WITH ITS DUTY TOPROMOTE COMPETITION
61.
The fount of the duty to promote competition is section 2(f) of ECA
which provides:
'The
primary object of this Act is to provide for the regulation of
electronic communications in the Republic in the public interest
and
for that
purpose
....promote competition in the ICT sector'.
Other
provisions of section 2 enjoin the promotion of investment, and
consumer interests. Section 67 of ECA addresses extensively
the
particular steps that ICASA must take to promote competition, in
particular, by imposing conditions in the licences. The obligations
on ICASA involve, among other steps, a continual monitoring of the
market relations and effecting modifications to sustain a competitive
environment. ICASA does not dispute the duty to consider the
competition dynamics that its decisions can precipitate. The duty
of
ICASA pursuant to section 2(f) has been commented upon in
Telkom
SA
SOC
v
Mncube
NO
&
others
[2016]
ZAGPHC
93
(2
6
1
0
2
1
2016)
thus:
'[72]
Following a consultation process that was conducted by Acacia, ICASA
received a report from Acacia which indicated that the
proposed
transaction may raise a number of potential anti-competitive effects
and it recommended various possible remedies that
could be undertaken
by ICASA. It was also pointed out by MTN in its founding affidavit
(par 144) that Counsellor Pillay has admitted
in her affidavit in
proceedings before the Competition Tribunal that "if Vodacom is
assigned Neotel's spectrum, it will gain
an irrevocable advantage Jn
the market and further delay the full benefits that would result from
there being a competitive market
for information and communication
technology services in South Africa".
[73]
Section 4B(8)(b) of the ICASA Act specifically refers to the
Competition Commission which has primary authority to detect and
investigate past or current commissions "of alleged prohibited
practices within any industry or sector" and also to review
mergers. In terms of section 1 of that Act "prohibited practice"
means a practice prohibited in terms of Chapter 2 of
the Competition
Act which is primarily concerned with restrictive practices in terms
of an agreement between parties and the abuse
of a dominant position
by a particular firm.
The purpose of
this Act is
to
promote and
maintain competition
"
in
the
Republic"
in
order to.
inter
alia,
promote
the efficiency.
adaptability
and
development
of the e
conomy. The purpose
of the EC Act is, on the other hand, much more defined and focused
when it refers "to promote
competition within the ICT sector".
It therefore appears that the Competition Act does not deprive
ICASA of jurisdiction
over competition matters relevant to the
communications sector or that ICASA is exempted from its duty to
properly consider
the competition issue.
[74]
Having regard to all these considerations, I have to conclude that
competition within the ICT sector was a relevant consideration
with
regard to the Neotel/Vodacom application. Facts placed before ICASA
also demonstrated that the Neotel/Vodacom application
raised various
competition concerns. Furthermore, having regard to the statutory
provisions referred to above, I am of
the view that
ICASA
had
a statutory duty to also consider the issue of
competition
in
order
to
promote the
objects
of
the
EC Act
before a
decision
was
t
aken. Put differently, the
statutory obligation to promote competition within the ICT sector
implies an obligation to
also consider and take into account
competition which is part of the decision making process and cannot
be delegated or deferred
to another organ of state. ICASA's failure
to do so and its decision to defer to the Competition Commission were
both, in my view,
wrong in law. I therefore find that ICASA's failure
to also consider competition and to defer to the Competition
Commission in
this regard was materially influenced by an error of
law within the meaning of section 6(2) of PAJA.' (Emphasis
supplied)
62.
The contention advanced is that the ITA is anti-competitive. Several
criticisms are advanced.
63.
One line of argument can be disposed of at once. The idea that ICASA
is obliged to acquiesce in MOT's policy directive
of 4 March to
conduct an enquiry into the competition implications is incorrect, as
a reading of the statutes has already revealed.
In any event,
contemporaneous correspondence reflects a positive stance to carrying
out such an enquiry. On 22 June 2016 ICASA
informed MOT that it was
embarking on a market review, sought to identify 'priority markets'
and insofar significant for this case,
stated that it was looking
keenly at broadband developments including in the two spectra at
issue.
64.
Of course, Section 67(4) independently of MOT's directions says ICASA
must:
'....
following an inquiry, prescribe regulations defining the relevant
markets and market segments and impose appropriate and sufficient
pro-competitive licence conditions on licensees where there is
ineffective competition, and if any licensee has significant market
power in such markets or market segments. The regulations must, among
other things-
(a)
define relevant wholesale and retail markets or market segments;
(b)
determine whether there is effective competition in those relevant
markets and market segments;
(c)
determine which, if any, licensees have significant market power in
those markets and market segments where there is ineffective
competition;
(d)
impose appropriate pro-competitive licence conditions on those
licensees having significant market power to remedy the market
failure;
(e)
set out a schedule in terms of which the Authority will undertake
periodic review of the markets and market segments, taking
into
account subsection (9) and the determination in respect of the
effectiveness of competition and application of pro-competitive
measures in those markets; and
(f)
provide for monitoring and investigation of anti-competitive in the
relevant market and market segments.'
This
obligation, inserted by an amendment in 2014, cannot be understood to
mean that the fruits of it had to precede the issue of
the ITA, or
any other decision of ICASA.
Moreover,
its terms point in the direction of regulation though license
conditions rather than assignment of spectrum.
65.
Second, the criticism that ICASA has not applied its mind to the
question of competition, because it got an expert report
from Aetha
two years earlier and another from Acacia after the publication of
the ITA is unfounded because that inference cannot
be made from those
facts. On the contrary neither the timing nor the content of the
commissioned reports suggests that to be the
case. In addition, an
expert report from Acacia on competition matters that came to light
in the course of the litigation about
a merger between Vodacom and
Neotel (the very litigation that resulted in the
Mncube
judgment cited above) prior to the ITA being composed, which
self-evidently ICASA had regard to, points to ICASA being abreast of
available recent data.
66.
The provisions of the statute, in my view, do not compel
an
ad
hoc
study
to be made
of the intended decisions of ICASA and the dicta in
Mncube
cited above, should not be read to imply that is a requirement;
rather the duty is to develop a general awareness and expertise about
the market dynamics and its changing character so that adaptations
can be made to sustain a pro-competitive market. Obviously such
awareness is necessary prior to making relevant
competition-implicated decisions, such as the ITA, but
Mncube
is
no authority for an
ad
hoc
link. It must
be borne in mind that the ITA follows on a much delayed decision to
issue it. Moreover, the ongoing attention given
to competition
aspects, even after the ITA was issued, as evidenced in the Acacia
report which addresses the ITA, points in the
opposite direction
suggested by the criticism. If this impression is to be dented by
closer examination in the forthcoming review,
it is not apparent on
these papers. ICASA is criticised for offering chapter and verse on
its thinking about competition matters.
A reading of the answering
Affidavit does not justify that level of criticism. The Fact that
they could say more, and chose not
to, may not dispel a suspicion
about the quality of ICASA's thinking, but the information on record
is simply inconsistent with
the notion that they were derelict in
relation to their section 2(f) or 67(4) duties.
67.
A more cogent criticism flows from the allegation of an un-level
playing field laid out in the ITA. Both Telkom and Cell
C point to
several attributes which supposedly substantiate that perspective.
The model of the ITA is to divide up the 700 mhz
,800 mhz and 2.6 ghz
spectra into five lots, A -E. Lot "A" is not on the
auction, but is reserved. The four remaining
lots are deliberately
composed of segments which combine the more and less attractive
bandwidths. These packages are not of equal
utility. The reserve
price for each is R3billion. Lastly, onerous licence conditions are
envisaged including coverage and speed
targets by 2020, albeit
slightly ameliorated to accommodate lack of access to the full
spectrum prior to migrating the non-mobile
operators.
68.
Telkom's principal criticism is that by auctioning 'unequal' lots,
the bigger networks with most money will outbid the
smaller rivals
for the plums and obtain 'first mover' advantages, thereby
entrenching the 'duopoly' at present constituted by the
market
dominance of MTN and Vodacom. ICASA's answer is that it has reserved
lot 'A' for a manifest public purpose, a wholesale
open access
network (WOAN), which shall facilitate small retail operators and be
attractive to consortia. Moreover, the four lots
up for auction to
the commercial operators must all be sold or none are sold. Thus, the
idea is that bidders will want to bid for
what will suit their
business plan; if any lot is so unattractive that it cannot attract a
bidder, the auction will fail entirely.
69.
That this approach is the appropriate or optimal model to promote
competition is not obvious., CASA invokes international
best practice
for the auction
per
se.
As to the range
of lots put up for auction, it justifies the scheme on a holistic
assessment of what it is expected to bring about,
and having taken
advice from experts. There is a criticism that the experts did not
prescribe this exact model, but that view is
misdirected because
slavish adherence to advice is not a safe indicator of a proper
application of mind.
70.
It is not obvious to me that the review court, in making a
qualitative assessment about the pro-competition attributes
of the
ITA, shall conclude that ICASA has failed to consider competition
aims or not tried to promote pro-competitive aims. It
is rightly
argued that
the
obligation of ICASA is not to present the very best pro-competitive
model objectively possible. By its very nature, a policy
choice of
such a nature is not susceptible to nit picking analysis
precisely because it is a qualitative assessment about
which all too
often reasonable people will disagree. Expert reports are paraded on
both sides of the debate.
71.
The chief difficulty, at this stage of the proceedings, is how a view
can be adopted one way or another. If the reviewable irregularity
is
said to be ICASA failing to apply its mind to competition matters, in
the manner the statute compels, it seems to me a case
is absent. If
the irregularity is said to be that the ITA fails to promote
competition, ie it is anti-competitive, I an uncertain
such an
inference can be drawn. If the ITA has a combination of attributes
which are, on the one hand, pro-competitive (ie the
vision for lot
'A' to be used for a WOAN) and, on the other hand, attributes which
seem indifferent to competition (ie inherent
bidding advantages to
the 'big two'), can it be said! CASA breached its statutory duties?
Indeed, how the duopoly is to be diluted,
assuming the public
interest is served by doing so (an aim taken for granted, but not
really addressed) and whether this model,
or any other model for the
ITA, can be used effectively to advance that objective (assuming the
duopoly is capable of dilution
over any short or medium period of
time, or ever) is not a question capable of being answered on these
papers.
72.
In my view, ICASA has not been shown to have breached any positive
duty imposed on it to promote competition.
DOES
THE
I
TA
EXHIBIT
IRRATIONAL
ATTRIBUTES?
73.
Several examples of supposed irrationality were initially offered but
were resolved by ICASA's amendments to the ITA. I address
the sole
issue pressed in argument by Cell C.
74.
It is contended that the composition of Lot 'B' is irrational because
the utility of the spectrum packaged therein, for technological
reasons, lacks the capacity to achieve the speeds of data processing
demanded by the proposed licence conditions. The critical
controversy
is not about the technological challenge per se but rather about the
technology necessary to exploit the package.
75.
In succinct terms, the package of different spectra would require the
operator to put in place technology that would enable
an aggregation
of two bandwidths. This can be done and is called 'carrier
aggregation'. The mischief is the absence, at present,
of handsets
capable of reading the aggregated signal. The present absence is
common cause. However experts on both sides predict
different
scenarios. ICASA's expert says the relevant equipment will soon be
'ubiquitous'. Cell C's experts deny this and suggest
that there shall
be a lag in supply, in part, because manufacturers need to gear up to
supply the market with the capacitated equipment.
76.
The difficulty with this controversy is that it is irresolvable on
paper. The onus to show an irregularity by ICASA is not satisfied.
IRREPARABLE
HARM AND BALANCE OF CONVENIENCE
77.
A distinction must be made between the harm that the review court
might find would follow from proceeding with the ITA process
and what
harm might befall anyone in the interim period who participates and
the ITA is set aside, or who does not participate
and the ITA is not
set aside.
78.
The potential for harm in the interim period is said to be that if
the industry actors participate in the process initiated
by the ITA
they must put up R3m entrance fees and R100m guarantees, prepare
detailed presentations and expend funds to get ready
to bid. This
exercise would involve raising capital from investors against an
uncertain prospect, engaging experts to advise on
an uncertain set of
possibilities, and drawing up business plans of great complexity.
Cell C alludes to the cost to maintain a
R100m guarantee over the
relevant period as R3m alone. It estimates that costs of R16m will be
consumed in participating. These
are onerous commitments and much is
put at risk. To go into such a process when uncertainty overshadows
the process is unwelcome
and unfair on participants. The risks of a
total setting aside and of a partial setting aside are both specters
which can result
in great wastage of resources and moreover implies
the need to make strategic choices which might backfire in a changed
scheme.
ICASA has tendered to refund the entrance fee if the ITA is
set aside which is small change in this scheme of things.
79.
No less significant is the risk of not participating. If an industry
actor chooses to stay out, and the ITA is not set aside,
the
opportunity to participate is forfeited. That is probably enough
danger to compel the industry actors to participate, come
what may.
80.
The
Gool
approach to interdicting a statutory body, as alluded
to, requires exceptional circumstances. The ITA process is, for all
intents
and purposes, a commercial transaction driven by a statutory
body and the affected parties have Robson's choice to participate.
This is not an instance of inhibiting a public institution from
rendering a service to the people. In my view, the circumstances
are
indeed exceptional.
81.
The case in support of ICASA breaching the frequency plan or acting
irrationally by assigning spectrum without access and indifferent
to
the time delay in giving effective access, is not one I would
describe as strong. However, in line with the sort of balancing
approach which the decision in
Olympic
Passenger
Services
v Ramlagan
1957 (2)
SA
382
(D)
at
383F
had in mind, in my
view, the degree of exceptionality is so great that a less than
strong case may properly not be insisted upon.
The concern about the
violation of the rule of law by not complying with the frequency
spectrum plan, in my view, does not require
interim relief as the
review court can put that right and no irreparable harm can occur in
the interim.
82.
One response offered by ICASA on the balance of convenience is that,
at worst, if the ITA is set aside, a court can fashion
appropriate remedial relief for the industry actors. This is not a
good answer. In my view, to throw the responsibility onto a
court to
craft a pragmatic solution to ameliorate the fall-out from an
irregularity is simply wrong; a court cannot be likened
to a
proto-team sent into a colliery to rescue miners trapped by a
collapsed hanging. The better approach is to examine the hanging
before initially entering the mine. That approach, in this matter, is
to look coldly at the alleged risks and the strength of the
facts
adduced to substantiate the alleged risk.
83.
In my view, as regards the industry actors, the peril in which they
stand is substantial. If the review succeeds, industry
actors who
participate will suffer irreparable harm in the ways described.
Moreover, the risk of knock-on litigation about the
vesting of
legitimate expectations, and the like, are to be avoided.
84.
ICASA
qua
regulator suffers no irreparable harm, but of
course, as guardian of the public interest is entitled to advance
that concern. The
critical contention on that score is the
justifiable impatience of consumers to get access to better services.
Can the envisaged
delay undermine this interest? In my view it
cannot. First, a messy process is undesirable. Second, ICASA itself
has twice since
publishing the ITA, postponed the deadlines to apply,
the most recent being to February 2017. This points in the direction
of an
absence of prejudice by the delay. The deadline for 2020 is, in
any event, a specious target given the deferment of a need to achieve
full roll out until access to I 00% of the assigned spectrum is made
available. The balance of convenience favours a grant of the
relief
sought.
THE
COSTS
85.
Various
submissions
have
been
made
that
a
costs
order
be
made
in
favour
of
the
protagonists
for
relief
against
ICASA.
In
my
view,
the
appropriate
order
is
that
the
costs,
including
the
costs
of
counsel
employed,
be
costs
in
the
review.
Cell
C
has
no
pending
review
as
yet.
I
t
has
already
had
some
substantial
success
in
the
form
of
the
amelioration
of
the
terms
of
the
ITA
already
mentioned.
[11]
Whether
it
chooses
to
bring
a
further
substantive
review
application,
or
ventilate
its
case
as
a
cited
party
in
the
other
application,
its
costs
shall
be
costs
in
whatever
matter
comes
before
the
review
court.
THE
ORDER
89.
Both the applications are granted in these terms:
89.1.
ICASA is interdicted and prevented from implementing the licensing
steps and processes referred to or contemplated in the
invitation to
apply in notice 438 of 2016, in GG 40145, pending the determination
of part B in case no 2016/59722.
89.2.
ICASA is interdicted from accepting bids in terms of the said
invitation to apply and from taking any of the steps set out
in the
invitation to apply to advance the invitation to apply or any similar
steps, pending an application by Cell C to launch
review proceedings
in respect the invitation to apply, provided the review application
is served by 14 October 2016.
89.3.
Costs, including the costs of two counsel, are to be costs in one or
other review.
____________________
Roland
Sutherland
Judge
of the High Court,
Gauteng
Division, Pretoria
Hearing:
27-28 September 2016.
Judgment:
30 September 2016.
MINISTER
OF TELECOMMUNICATIONS AND POSTAL SERVICES
Adv
Vincent Maleka SC, with him,
Adv
Nicole Mayet-Beukes and Adv Mawande Seti-Bata
TELKOM
Adv
Gilbert Marcus SC, with him
Adv
Muzi Sikhakhane SC and Adv Chris McConnachie
CELL
C
Adv
Johnny Blou SC, with him,
Adv
Mark Wesley and Adv Sha'ista Kazee
ICASA:
Adv
Wim Trengrove SC, with him,
Adv
Carol Steinberg Adv Mkhululi Stubbs and Adv Cingashe Tabata (Pupil)
[1]
These
disposed
of
issues
include:
A
complaint
about
a
30%
BEE
qualifying
threshold,
now
to
be
changed
by an
amendment
to
the
ITA,
to
a
Level
4
BEE
qualification
which
all
the
industry
actors
can
satisfy;
an abandonment
of
the
requirement
to
be
fully
funded
for
I
0
years,
whatever
that
meant,
now
substituted
with
the need
to
submit
a
credible
business
plan
to
show
how
funding
over
a
10
year
period
can
be
procured;
a
tender
to refund
the
entrance
fee
of
R3m,
which
was
initially
non-refundable,
if
the
review
succeeds;
and
a
deferment
of the
target
date
on
achieving
certain
milestones
in
roll
out
of
service
until
full
unimpeded
access
can
be
delivered
of
the
spectrum
to
be
assigned
to
an
operator.
[2]
The
decision
in
Gool
related
to
the
Minister
applying
the
Suppression
of
Communism
Act.
The
disposition
to accord
the
State
deference
in
that
era
is
no
longer
one
that
earns
admiration
in
post
-1994
South
Africa.
Although
not necessary to decide in this case, a better set of facts by which
to illustrate the propriety of the dicta would,
I expect, be
welcomed by many.
[3]
Section
192
of
the
Constitution
is
the
source
of
the
legislative
obligation
to
create
an
independent
authority.
That section provides that: 'National legislation must establish an
independent authority to regulate broadcasting
in
the public
interest, and to ensure fairness and a diversity of views broadly
representing South African society.
'
I
CASA is
that body.
[4]
See: Sections 9, 16,
22 and 29
of
the
Constitution. City of Tshwane Metropolitan Municipality
v
Link
Africa Ltd
2015 (6) SA 440
(CC) at [120] -
122]
[5]
[6]
Section
41(1)
of
the
constitution
does
not
apply
to
ICASA,
as
a
chapter
9
Institution,
it
not
being
within one
of the
three
spheres
of
government.
Nor
does
the
Intergovernmental
Relations
Framework
Act
13
of
2005;
section
2(2)(e) expressly excludes all chapter 9 Institutions.
[7]
The
allocations
of
permissible
usage
is
performed
by
MOT. CASA
performs
the
assignments;
section
1,
definitions:
'a/location',
in
relation
to a frequency band, means the entry in
the Table
of Frequency Allocations of
a
given
frequency
band
for
the
purpose
of
its
use
by
one
or
more
terrestrial
or
space
radio-communication
services or radio astronomy service under specified conditions;
'assignment',
in
relation to a
radio
frequency or radio frequency channel, means authorisation given by
the Authority for a radio station to use a radio frequency
or
radio
frequency channel under specified conditions, and 'assign' must be
interpreted accordingly;
[8]
GenN
352,
of
3
April
2015,
GG
36334
[9]
Pharmaceutical
Manufacturers
of
SA
In
Re
President,
RSA
[2000] ZACC 1
;
2000
(2)
SA
674
(CC)
at
[85]
ff.
[10]
R232
of
18
March
2015,
GG
38583.
[11]
See
footnote
I.