Background:

Limited Competition:

Communications, the ability to communicate cheaply and reliably between ourselves, about all those things we feel are important, irrespective of the opinions of others, is central to a functioning democratic society.

Communications in SA are not as reliable or cheap or informative nor as free from interference as we would like them to be.  The communications industry is in the hands of a few major players.  The telephone and cellular phone industry by Vodacom and MTN with a struggling Cell C hanging in there, the television houses, namely the SABC and E TV, the radio broadcasting houses, mainly dominated by the SABC and Prime Media, so it seems, and significantly, government is a major player in all these activities.

Content Control:

Further, not only do government have their fingers in too many ICT (Information and Communication Technologies) pies they also are trying to interfere in content, with the so called ‘secrecy bill’ enabling some lowly local government bureaucrat  to declare the menu at your favourite pub a classified document, which could land you in jail for decades for possession and sharing.  Exaggeration? Only just!  See Fact Box:  A look at SA’s Secrecy Bill.

But that is not the only legislation that effects the ICT market place. There is also the The Film and Publications Act, No. 65 of 1996 as amended by the Film and Publications Amendment Act, No. 34 of 1999, both of which are nominally aimed at protecting children from access to sexually explicit material and material depicting extreme violence unless the material is previewed and rated by a control board and distributed under conditions set by that board.  It also prohibits all contact with images or material that depict or seem to depict child pornography (see ISPA Advisory 3).

Moral Creep:

Noble as that intention is it seems to be too broadly applicable and anyone with an internet connection is at risk from inadvertent possession of such material, at risk even if these laws skirt the boundaries of constitutionality.  It also puts internet and other ICT service providers at risk and imposes a huge and almost un-doable duty on them to comply with these acts.

The danger here is  that government is setting a precedent of being able to control all sorts of media content on moralistic grounds.  A typical example is ‘The Spear’ painting, which while it clearly is offensive to certain members of society,  equally clearly is not offensive to others, who will contend that it makes a valid moral and social statement, as do many other ‘provocative’ works of art.  

The point being; where does government begin and end making moral judgments about society at large and imposing its moral judgments on all or some of its citizens?  The DDF believe this is dangerous ground that has an element of moral creep attached to it, and that there are better and more effective ways of dealing with the problem of child pornography and child exploitation, and protecting children from exposure to adult material, than the route taken by these two acts.

Institutional Control:

Government also attempts to dominate the ICT market through its holdings in Telkom, Sentech,  Broadband Infraco and the SABC and sets itself up for conflict of interests in legislation and regulation, typical of which is the heel dragging on the liberalisation of the sector demanded by the WTO (World Trade Organisation), which, technically the government complied with but on the ground they delayed as much as possible, giving vested interests (mostly government stakeholders) ever increasing advantages over those who stood to gain from the market liberalisation.  As a result the South African market has continued on its path of high costs and sluggish services delivery and South Africa has a far way to go to modernisation.  It needs a modern ICT market that government can make use of to bring South Africa’s millions into the 21st Century.  So far, the government, ICT’s single most significant stakeholder, is not delivering anything better than words, words, words.

Profit and Loss From Failure:

The South African government, through their business deals and stake-holdings with foreign businesses (SBC Communications and Telekom Malaysia through a special purposes vehicle Thintana Communications) may have cost South Africa billions of rands in a failed effort to bring DECT infrastructure and services to rural South Africa.  These businesses  held stakes in and negotiated preferential and exclusivity agreements for Telkom, in the expectation that they could milk these deals.  Instead  the cost of service was so high that the plans failed and were abandoned.  

The DDF do not know what that cost Telkom and the country but a 1998 report  suggested a 2 billion rand ($400 million) plan for delivery of  420 000 lines over a 2 year period, and up to 2.8 million lines, probably at some more billions of rands cost, within a 5 year period,  That’s not small change.  And it was all just abandoned, and now we are left with the same problems we were faced with 12 years ago.  How to service SA’s rural community?  Thintana, however, came away smelling really sweet from reducing their stake in Telkom in 2004, a deal that netted them 6.1 Billion Rands.

 What was this?  Shoot first and ask questions later or just a lot of financial smoke and mirrors?  Whatever it was it was also a lesson in how to profit from failure.   The mind boggles!

A Better Way:

One opinion is that if the South African Government had sold its stake in Telkom when Telkom shares were at their peak, the proceeds could have more than covered the cost of setting up high speed broadband and 4g networks throughout South Africa, and then some.  The same opinion believes that the SA Government should divest itself of its ICT stakes before they become worthless, and permit the buyers to get on with the business of succeeding in the ICT market by providing that infrastructure.  The DDF think that opinion is probably worth listening to.

Then there is the question of what to do with additional wireless spectrum that will become available from use of 4g networks?  That is slated to become another ‘can of worms’. 

So there is much to do to get the ICT sector functioning for the benefit of all South Africans rather than for the benefit of their government and a few select vested interests.

 Relevant readings:

South African Telecommunications Sector Performance Review 2006
Myths of SA’s high priced pre-paid mobile services

Strategies: