Catch the Convergence Bill if you can

Date:     30 Jul 2003

Convergence cometh, like it or not. Should we care? You bet. And here is why.

Soon the Department of Communications (DOC) will pop up a Convergence Bill for Parliament.

Once law, the Bill will encourage the growth of some comms technologies, and put paid to others. It will shape entire industries for decades, and affect your internet speed, cost and devices.

There will be mega-impact on our economics, politics and daily interaction and on our standing within the global system.

DOC minister, Dr Ivy Matsepe-Casaburri, called for the Bill last year saying it would regulate “the convergence of broadcasting, telecommunications, information technologies and new media”.

That moment is nigh, having happened at helter-skelter pace over the past month.

That’s Andile Ngcaba for you. He is Doc Ivy’s Director-General, and a man on a manic mission. So far his penchant for action has worked.

There’s a licensed cellular industry that has put 14 million mobiles into the paws of the South African public.

There’s competition coming for Telkom. We can choose from wide clusters of community, commercial and public broadcasting. Two new African language TV channels are in the wings. Satellite-delivered education is a reality.

The impending Convergence Bill could herald even more dramatic developments. But the move could also bring dangers; we may yet regret our headlong rush into the future.

Ngcaba’s argument is that foot-dragging incurs a high opportunity cost. He has a point: the tech goal posts keep moving, so staying put just leaves you further behind.

But the gamble is that no one knows exactly where these posts will be in a year or two, and what they'll look like. The rules themselves could change. So, while we need to place bets and aim for an orderly transition, the wrong decisions can be extremely damaging:

Huge investments spiralled down the drain in Europe, where state policies to auction “third generation” licences led to companies hugely overpaying for unprofitable business opportunities.

The USA sits today with massive unused capacity in its expensive broadband pipes, having woefully misread the market.

Hundreds of unregulated small telecoms players have gone bankrupt around the world.

Here at home, Telkom met its licence requirement of taking phones to disadvantaged areas. But today tens of thousands of people sit sans landlines after being cut off for their inability to pay. Telkom may as well write off the investment.

No one could easily foresee the results in such a fast, fickle and unfamiliar field.

The DOC believes we have to move ahead, fast, notwithstanding the risks. In particular, Director General Ngcaba wants to change the licensing regime in favour of more competition and new entrants.

This aim received broad support at a recent colloquium attended by established industry players in Johannesburg, and convened by Ngcaba.

As a result, instead of the current system where companies are licensed to run -- and oligopolise -- many sections of the “value chain” of converging communications, the new Bill will disaggregate it all.

According to such a “horizontal regime”, there will be different licences (and conditions) for players wanting to operate in any single arena or combination thereof.

So there will be licences for providing infrastructure like signals or cable; and other licences required for services that turn facilities to use as telecoms or broadcasting channels.

There will also be separate licences for applications like voice or e-commerce utilities over these channels. And there will be licences for distributing content. Re-selling licence permissions may be allowed.

The effects could be wide-ranging and complex:

The Bill may allow the Regulator, Icasa, to begin licensing telephony services over internet (a technology known as VOIP). New companies, not responsible for infrastructure provision, could then offer far cheaper calls than Telkom.

That in turn could lead to a boom in call-centre businesses, with South Africans chatting up consumers in First World countries. But who, then, would want to seek a licence to invest in telecoms infrastructure? It depends on the licence conditions.

The Bill’s outcome may require licences for WiFi delivery of wireless internet, a technology that is touted as a cheap way to spread broadband. But the bureaucracy, as well as specific licence conditions, could stifle investment and therefore roll-out.

On the other hand, licensing could foster helpful standardisation and economies of scale. So will the Bill bring -- or break -- Wifi? It's hard to say.

A likely aspect of the Convergence Bill will be the mantra of technology-neutral licensing. For example, a company that gets licensed to provide applications or content will be authorised to do so over any channel and for any receiver device.

On the other hand, inasmuch as information is sent over the airwaves, there is still likely to be regulation for local content quotas and for fair electoral coverage. In other words, if a company uses public spectrum to deliver content, "technology neutrality" is negated for these packages.

Such complexity is part of the reason why a number of big business groups called for cool heels at the DOC during the Johannesburg colloquium.

MTN stressed the word “gradual”; Multichoice talked of “caution”. Telkom decried a “big bang” approach. The SABC suggested that a Green Paper and White Paper process should precede any legislation.

On the other side of the debate, the Black Information Technology Forum vented its impatience over slow Black empowerment under the status quo. Sentech urged straight-out speed.

The State Information Technology Agency (Sita) attacked self-satisfied players for complacency. UU-Net said that calls for stability were simply code for protectionism. Appeals for slowness amounted to the big players seeking time to protect their business models.

The go-slow lobby had no chance against speedster Ngcaba and his allies. The colloquium made clear the train was leaving. Accordingly, companies scrambled to volunteer staffers to contribute to drafting the new legislation.

Akin to the rhetoric of Africa leapfrogging technologically over the West, the new Convergence Bill is leaping right over a more measured and broad public policy process.

Whether the result will be wiser or worse for this, no one can say. And whether this is one Bill that the public will have to foot, or whether it will bring major benefits, history will have to judge.

In the meantime, get conversant with convergence regulation: it’s happening with haste.

Thanks to readers for stimulating responses to my column last week. You proved that text on a screen can be interactive. So, now, what’s your take on configuring convergence? Guy Berger is head of Journalism and Media Studies at Rhodes University and deputy chair of the South African National Editors Forum (Sanef). He was recently nominated for the World Technology Awards.