UMRABULO POLICY CONFERENCE 2022 SPECIAL EDITION

Digital Communications and Battle of Ideas

INTRODUCTION

This paper is divided into three parts. The first part contains a reflection on the developments that took place since the 54th national conference. In the second part, this report focuses on specific resolutions of the 54th national conference and how they have been fulfilled by the National Executive Committee (“NEC”) or the 6th administration.

These resolutions are discussed under the following topics: the battle of ideas, media, broadcasting, Information Communication Technology (ICT), the digitization of government, the digital transformation of society, and postal services. Lastly, the third part canvasses policy matters that were not covered by the 54th national conference but which are pertinent to the development of the ICT sector.

A. CONTEXT

The current policy review takes place against the backdrop of the Covid 19 pandemic, the United States of America (US) restrictions on the use of communication network equipment manufactured by OEMs from China, the international shortage of micro-chips, and irregular supply of electricity in South Africa.

The national lockdown necessitated by Covid 19 meant that all social, economic and government activity had to transition to virtual or online instantly. The successful transition was enabled by the availability of both fixed and mobile infrastructure. The South African electronic communications infrastructure proved to be resilient and effective.

However, the pandemic also highlighted gross inequality and uneven spatial development. Those in the margins of society suffered the most from the lockdown. They were excluded from online interactions because of lack of access to broadband and inadequate connectivity. They could not work from home or access essential services online.

Covid 19 has underscored the importance of electronic communications infrastructure and universal service and access. Future policy interventions should focus on increased deployment of fibre and mobile communication infrastructure to cover the length and breadth of South Africa.

The ongoing security concerns raised by the United States on network equipment from China requires close monitoring . Some of the Original Equipment Manufacturers (OEM) that have been blacklisted by the US are major network providers in South Africa and the continent. China and the US are South Africa’s major trading partners. A fallout between these world powers will have adverse implications on networks in South Africa and the continent. Most of the mobile network equipment in South Africa is provided by OEMs from China.

South African needs to proactively develop an approach that ensures continuous availability of its telecommunications infrastructure.

Furthermore, China produces 90% of the global production of rare earth metals (“REE”). REE properties drive technological advantages of performing at reduced energy consumption, greater efficiency, miniaturization, speed, durability and thermal stability. REE are used in Electric car motors, iPhones, military jet engines, batteries, and satellites. The continued disagreements between the US and China has implications on the global supply of REE.

The shortage of microchips has stunted manufacturing of electronic equipment and the provision of associated services in South Africa. Major economies have taken steps to ensure adequate supply of these chips for their own use. It is recommended that South Africa should embark on economic diplomatic efforts to secure supply of microchips to support domestic manufacturing and production of electronics, ICT and IT equipment.

Intermittent electricity supply has a negative impact on the delivery of mobile and fixed broadband services. The operators have resorted to power their base stations with diesel generators. This increases the costs of providing broadband and adversely impacts on the environment.

In summary, South Africa’s broadband aspirations require policies that will extend connectivity to outlying areas and the hinterland, adopt measures that advance network security against external intrusion, insulate the current network provision from geopolitical currents.

B. SPECIFIC POLICY AREAS

The section on the battle of ideas deals with the changing dynamics in national discourse and draws mainly from the assessment of the balance of forces. The media section examines policy developments in respect media diversity, digital, and print media.

In the section on ICT, this report analyses progress against the goals set out in the Integrated ICT Policy White Paper (the ICT policy) and SA Connect policy. The assessment of broadcasting policy developments canvasses topics such as radio, television, digital, public broadcasting, and the implications of broadcast digital migration.

In postal services, the report surveys the progress made in the licensing of the Post Bank, the transformation of the postal services to accord with the demands of a modern society.

The section on the digital transformation of society examines the extent to which South African society has embedded new technologies in their way of life.

In the section on the on the Fourth Industrial Revolution, this report reflects on the proposals contained in the report by the PC4IR .

Under each topic, the report recaps on the policy objectives, canvasses how these objectives have been met since the 54th national conference and advances new policy proposals, where applicable.

1. BATTLE OF IDEAS

The battle of ideas is the struggle over agenda setting on the ideas themselves, and a struggle for the progressive production and dissemination of ideas in society, including the media, the educational and training system, and the policy apparatus within the state.

The terrain of struggle for the battle of ideas also include a wide range of cultural and faith based institutions and practices. The ANC struggle is, and remains that of attaining political hegemony in the South African society and, in this regard, within a heavily contestation to win the hearts of South Africans towards full attainment of freedom and democracy.

The ANC is guided by the historic mission of building a united, non-sexist, free democratic South Africa. In this task, the ANC has seeks to renew its membership base, to keep the organization rooted in the masses of our people, rural women, and all the motive forces retaining the mass democratic character of the organization, as a leading disciplined movement.

In 2012, we asserted that there exist an ideological onslaught against the ANC using all forms of media including broadcasting, print, social media and the internet seeks to dislodge and undermine the character of the movement. This view persist in the current phase, where the organization faces new challenges including policy contestations which seeks to impose other policies within the governance system led by the opposing forces to the ANC, in particular the opposition political parties. There exists a political agenda which seeks to portray the ANC government as loosing hegemony amongst the masses, weakened force failing to lead the national democratic state.

These kinds of tactics by the opposing forces should be thwarted, dislodged, and promotion of political governance of the state taking centre stage at all times, where the ANC demonstrate leadership character in the state, leading in all levels of governance, eliminate corruption, and consistency through policy implementation founded in the Constitution of the Republic. South Africa needs a renewed strong ANC which also mobilize all motive forces within the ANC lead Alliance with COSATU and the SACP, but also women, youth, and the urban, and rural poor masses with the national democratic revolution guided by the strategy and tactics document.

The potency of social media influence in the political landscape in South Africa cannot be denied. Given its strength in rapid and instant communication, social media has emerged to be an engine of activism, mobilisation and digital leverage, as well as a conduit for channelling sensationalism, peddling disinformation and hate speech.

Social media goes beyond people sharing views and opinions online, but the technology can also play a pivotal role in orchestrating protests that move beyond the digital realms of communications.

In terms of statistics, an estimated population of about 59.62m million, at the beginning of 2020 around 36.54 million South Africans were internet users, and 34.93 million people could access the internet through their mobile phones. By 2023, it is estimated that this will increase by 40%. This is by-far a commendable growth, which is a function of market demand, aggressive and competitive marketing, and a conscious policy by the ANC -led government in embracing the technology revolution.

It is estimated that about 25 million South Africans are currently social media users, and a vast number of about 21.56million users access the platform through mobile devises.

On the role of social media, it is observed that this new phenomena of online media network has changed the terrain of battle of ideas, and engagement, in particular, where the opposition parties take advantage and launch attacks on the government and the ANC in general, targeting performance in government, local and provincial administration in particular.

Misinformation and false news has also added a layer of new forms of misleading the people in the public domain. The reduction in the value circulation of print media newspapers, and quality of news report has the potential to distort the hegemony of the ANC, the alliance (SACP, COSATU) as the true leader of the national democratic revolution advancement for freedom, and democracy.

The ANCs performance in the elections if used as a demonstration and indicator for assessing the ANC and government leadership in the battle of ideas in society, there are challenges faced by the democratic movement in this regard, amongst others disunity and leadership discipline. Notwithstanding the prevalence of Covid-19, the ANC dipped below 50 percent during the local government elections in 2021 for the first time since democracy.

The ANC must operate in a coordinated and disciplined manner to set the agenda in the battle of ideas. The war of ideas must be fought like a real war therefore there must be a strict coordination of content and messages between all structures of the organization. The advent of the community and public media space offers a potential, progressive opportunity for the ANC, depending on the ability to influence this media and provide it with adequate support.

In the post-Covid-19 governance era, the ANC and its deployed cadres must continue to articulate the ANC policy positions in a manner that is consistent and coherent, with clear content. In the era where corruption has become endemic in society, it remains important that the principle of articulation of policy position is handled acknowledgement that credibility of any message lies in the credibility of the messenger.

The ANC has continued to show strong presence during the national state of disaster related to the Covid-19, with a strong showing of leadership that cares for the masses. However, the corresponding element of corruption during the disbursement of funds, and related Covid-19 PPE spending has the potential to undermine trust in the governance of the state.

The outcomes of the Commission on State Capture in the form of volume reports of the Commission bring forth a new agenda setting trajectory in the social and mainstream media. The ANC is expected rally its leadership capability to articulate its position on the State Capture findings, bringing ethics of accountability and restoring the credibility of government, and state institutions, and a state founded on the Constitution.

The ANC’s organizational renewal program must be underpinned by a mass program of political education and training, seeking understanding of the organizational revolutionary role, the constitution and leadership discipline. ANC branches should engage in understanding the basic documents of the ANC such as the Constitution, Strategy and Tactics, Organizational Renewal and the Conference resolution in order to inculcate a culture of revolutionary discipline within the organization across all provinces, regions and branches.

The ANC should consider a implementing a media literacy program for its members in order to educate on cyber-disinformation campaigns or operations and ensure that members understand the impact of peddling or sharing fake news – this would further ensure that members are not persuaded by those who wish to fight the ANC in digital platforms.

The Policy conference should discuss the battle of the ANC against:

- the political platform of the South African counter revolution;

- the ideas advanced by the neo-liberal forces; and,

- the ideas advanced by world imperialism.

In the end, the ANC Policy Conference must respond with a concrete program of what platforms with the organization use in order to respond as it engages in this battle of ideas.

The document should reflect on how the ANC should liaise with its Allies and the MDM to ensure that all these act in concert with regard to the battle of ideas.

2. DIGITAL BROADCASTING

The Broadcasting Act articulates the founding principles and policies underpinning broadcasting in South Africa, and these remain relevant for the move from analogue to digital broadcasting technology. Broadcasting services remains the most powerful method of sharing information that influences the minds of the citizens. For any democracy to achieve the objectives of freedom and access to uncensored information, broadcasting policies need to be progressive and take into account the changing platforms for content distribution.

User generated content and non-linear broadcasting content distribution have become the order of the day.

Ownership of the media assets remain the most powerful strategy adopted in South Africa and protected by the Constitution, and provided for in various pieces of legislations. The idea of ownership of assets is not only driven by market interest, but also hegemony and influencing the agenda in the battle of idea, what gets broadcast. In addition, the agenda for providing information, education and entertainment informs its key role in our democratic society. When considering broadcasting policy, the broadcasting value chain discussed below should be considered:

i. Content generation

Content is the main driver of audience reach. When considering how content draws audiences, especially local content, any broadcaster who seeks to succeed in the sector needs invest more than 50% of its annual budget on content generation. Not only that, there has to be some focus on special interests content such S SPORTS. Especially sports of national interest.

The sporting bodies should not sell broadcast rights on an exclusive basis.

If they do so, there should be an agreement upfront to make all sports to be sports of national interest. This should not be a burden to public broadcaster to carry these sports codes on commercially unviable basis.

A policy should be adopted to ensure funding of local content generation is a priority. This will drive local production and create local jobs,

ii. Content distribution

What is the point of creating compelling content if you can’t get the content to the eyeballs of the viewers? There are different platforms of content distribution such as Digital terrestrial, Satellite, OTT etc. The cost to deploy these platforms vary from levels of sophistication and control mechanisms used to protect the content from piracy. For the private sector broadcasting sector, the method of funding is simply from the shareholders of the business and it is mainly a venture for profit gain.

The public broadcaster on the other hand, the mandate is to get the content to the broad audience. This will require a policy shift on. How the public broadcaster is funded. The current funding model of the SABC lands itself on a pseudo commercial and yet expected to be carrying public broadcast mandate of universality.

iii. Content Regulation

The issue of content regulated has been sufficiently covered in the current regulatory framework of ICASA where the local content quotas are regulated. In Fact it has become clear that local content drives audience uptake. Most broadcasters have done more than the quotas stipulated because local content is more compelling and results in more viewers preferring to watch the home grown content as their television channels of choice.

The policy consideration could be to consider the following:

a) Set a minimum of 60% local content limit as a minimum in the future. The transition should be managed so that policy and regulations of local content do not have the unintended consequences of loss of audience resulting in drop in advertising revenue.

b) The public broadcaster should focus on delivering a high percentage of local content.

c) Funding of local content as a way of promoting local culture and heritage should be encouraged. The modalities of who should be the custodian of funding local content should be discussed and a policy position be taken. In Australia, there is a debate on dropping local content quotas and replacing that with the funding model for local content. In RSA, the consideration should be for both regulated quotas and funding that promotes locally produced content.

iv. Ownership and control

Media ownership plays itself out in how content is broadcast. This is especially through when it comes to politically charged content. Ownership of media assets by indigenous South Africans is critical. Broadcasting assets ownership is expensive and therefore any policy that seeks to prescribe minimums must link it to some incentives.

How much local ownership is correct for protection of democracy and freedom of speech and access to information deserves some consideration. It could be helpful to limit foreign ownership of the privately owned broadcasting assets to 45 %.

However, broadcasting has changed in form and even in substance. This means that it could even be more difficult to impose ownership quotas in the digital broadcasting world. This is because more broadcasters could just turn to online content distribution platforms.

Therefore, South African owners of broadcasting content should be encouraged to be majority owned by South Africans and link this to the incentive funded local content.

As South Africans, we should not be shy to initiate concepts which are originally South African. Therefore, for the sake of industry transformation, South Africa should promote majority South African owned media assts.

v. Public broadcasting and its role in a building democracy

The benefits of having a public broadcaster far outweigh the funding required to deliver public service content. RSA’s current broadcasting system requires a different form of funding. This will alleviate the pressure on the broadcaster to focus on commercial drivers. The broadcaster has to be funded for most of its high cost budge items such as local content, local sports rights acquisitions, signal distribution costs and local content that is educational and informative.

The sports rights for broadcast is a highly contested area. This requires strict oversite and regulatory intervention. There is a big question about using TV license fees as a means for generating funding for the public broadcaster. There is high level of piracy resulting in many free to air TV license fees not being collected. The fact that there is an exemption on license fees for the indigent who are beneficiaries of free STBs for digital migration demands that there be a policy change regarding Free-to-Air (FTA) TV licenses.

The following policy considerations should be made:

a) the SABC should be a fiscus funded public broadcaster

b) All commercial broadcasting services should not be part of the SABC because it bring mandate confusion.

c) The PBS service should be funded for generating local content of all different genres.

d) All sports of national interest should be live on PBS.

e) All signal distribution costs should be funded directly from the fiscus.

vi. Funding models for community broadcasting services

Community media remains an important pillar of the broadcasting system in South Africa. However, this sector’s sustainability remains questionable under the current funding model. The biggest challenge for the sector is the cost of signal distribution. Also the quality of service for this sector, especially TV remains a challenge because of high cost of producing good quality content. For a number of years, the community broadcasters remain financially challenged. It is critically important that this sector is kept alive with some financial support.

The policy considerations should be that:

a) Funding the community broadcast signal distribution cost from the fiscus.

b) This funding should be directed to the signal distributer as a mandate to carry community media for a medium to long term horizon.

c) MDDA to focus on funding the community for long term sustainability

vii. Diversity of media platforms

A move from analog to digital is under completion this year. As a result, policies and regulations should focus on digital platforms like Digital Terrestrial Transition (DTT), and Over-the-top (OTT) services and the well-established Direct-To-Home delivered over satellite technology.

On DTT: The regulator should be encouraged to appoint multiplex (Mux) operators to establish and maintain the DTT network. A policy should inform the regulations on how many muxes should be licensed per broadcaster. All DTT frequencies should be licensed to the signal distributor to enable it to configure multiplexes based on demand by channel owners/broadcasters. There is a need for regulatory reform when it comes to digital broadcasting.

On the OTT Services: The challenge faced by the broadcasting industry is how to best manage the licensing of OTTs. The general view is that let OTTs be free from licensing constraints, however, the regulation of content and how its appropriateness remain critical for the protection of children.

On DTH: The regulations on DTH remain practical for now for commercial and free- to-air services. It is important that the regulator authorizes all channels that are carried on any content delivery platforms.

The capacity on licensed muxes must carry different languages to promote diversity.

On 5G Broadcast: For the future of broadcasting, spectrum should be allocated for 5G broadcast. This could mean that all VHF spectrum post digital migration should be reserved for the next generation of broadcasting systems. A number of papers have been published by the European Broadcasting Union (EBU) on the future of broadcasting spectrum under the banner of 5G Spectrum for broadcasting. A policy consideration should be taken to allocate some spectrum for broadcast under the 4IR technologies like 5G.

SENTECH plans to implement a satellite technology strategy where South Africa’s access to satellite beaming into the whole of Africa. The satellite technology investment will improve South Africa’s satellite access and capability in order to provide multiple technology -based services including Direct-To-Home broadcasting services.

Also develop capacity for over-the-top (OTT) services in order to support the growth of the broadcasting industry and online service for various communities.

3. PRINT MEDIA

Sustainability of print media as advertising revitalisation programme

The ANC policy acknowledges that journalism as a practice has a long and rich history commencing in 1824, which has had a double edge sword. That is has been a contributor to the struggle of freedom and a champion of media literacy at the same time. It has become a conduit for reporting content that generates a buying mood resulting in higher circulation and distribution figure. That, the end apartheid and the election of Nelson Mandela and the ANC government was a moment of real optimism;

Print media is considered a bulwark of democracy and that the South African Constitution in section 16 guaranteed the right of freedom of expression, including freedom of the media.

The ANC itself has a long record of accomplishment of commitment to media freedom. It therefore means that the deepening of South Africa’s democracy will depend upon the acceptance and tolerance by the ANC and the government of the scrutiny by the media of its performance.

Print media faces challenges of usage and adoption in the face of mass popular digital social media, therefore for its sustainability, it needs to adapt to the changing digital landscape in order to continue to serve society. It must also seek to develop content that serve a different purpose than that of digital sources which have a distinguished value as opposed to something that is offered e.g. online

Print media is an age-old business and service. It has been for a long a time a primary form of conveying information, until competition from ICTs, Internet, OTTs and social media platforms such as Twitter and Facebook. These platforms have now become the vehicle for breaking news stories and changed the way people consumed content. This form of media has posed a serious threat to the long-term sustainability of print media.

The four key phenomena are driving the transformation of media audience are media/audience fragmentation; audience autonomy, exorbitant production and distribution cost.

Further, note that, despite the negative tones in the industry print remains profitable as a business. There are still many areas in South Africa which still depend on the printed format owing to lack of infrastructure coupled with the excessive data cost.

The average daily circulation of South African newspapers and magazine has declined by 7%; that despite acquisition taking place, however, the sector is still dominated by four big players who control the entire value chain of the market thus creating a barrier to market entry for small and emerging players.

The ANC notes that GCIS needs to implement various programmes aimed at the print and digital media revitalisation;

The ANC believes that support is critical for the sustainability of the newspaper industry, GCIS can do more, including supporting a diverse mainstream and community press, whilst maintaining media independence.

The ANC emphasize and understanding the importance of reviewing and concluding the transformation charter to enable the sector to deal with content diversity and comply with B-BBEE. At the same time, the print and digital media and GCIS must with immediate effect implement measures that protect the print and digital media, MAC sectors against the proliferation of Facebook, Amazon, Google, (FANGs) etc. protect South African businesses.

4. STRENGTHENING THE COMMUNITY AND SMALL COMMERCIAL MEDIA SECTOR

The community media needs continued support to strengthen its role in building a strong democracy. In fact, various policies such as ComTask Report 1996 and ICASA’s Triple Inquiry Report, and pieces of legislation identified public funding for the public broadcaster and community media as important for attaining media diversity. , The latter recommended support for community media and that funding from industry and foreign donors should also be provided by government.

The 1998 White Paper on Broadcasting was the first major policy document not only to shape the vision for broadcasting including for community broadcasting, in which the Policy emphasized the need for subsidies for community radio to ensure that freedom of expression was accessible to all communities.

The current Draft White Paper on Audio- visual and Content Policy, a successor to the 1998 White Paper on Broadcasting introduces new provisions in government public service media the broadband and in the multichannel environment.

The National Development Plan (NDP 2030) highlights that “access to information via print, broadcasting and the internet are vital for building an informed citizenry. It also contributes to education and economic development”. The media plays a core role in nation building and are critical for democracy to function. Community media in particular, in both broadcast and print has the potential to create employment and drive innovation in predominantly rural provinces.

The there is a need for review and adoption of policy which must position the issues of community and small commercial media issues prompting the need for a standalone policy governing this important sector.

Further, community and small-commercial media has grown from 3 radio station in 1994 with less than 2% listenership to over 215 radio station, over 300 community print and over 50 small-commercial media projects with an estimated 33 million listeners across all provinces or 25% of the market share.

A combination of factors has weakened the impact of community broadcasting support and the mushrooming of community broadcasters in a single community, resulting in high signal distribution tariffs and rental funds for premises to host community broadcaster.

The revenue through advertisement has fallen due to increase of licensed stations in the same vicinity and the broadcasting environment has become increasingly complex. That with the increasing demand for the support amid declining public funds, clarity has to be provided regarding the objective, nature and criteria for the support as well as clear value proposition for public funding to community media of the future.

Despite the growth of the MDDA support over the years, it had its own limitations in terms of both resources and its current Act. It has no comprehensive policy to deal with individual station’s, uniqueness and needs, the exclusion of community TV, narrow in scope and not often linked to other government programmers around job creation and industry development, not subjected to regular reviews for improvement.

There is increasing demand for community broadcasting and a growing number of Community TV initiatives sprouting in the various parts of the country presents community TV as an inevitable reality.

Therefore, it can no longer be ignored, both in terms of policy planning and future support

In recent broadcasting developmental years, a number of international developments have changed both the landscape of community broadcasting, licensing environment and the expectations for the community they operate and represents.

The government (GCIS /MDDA) needs to consider the developments in technology and online media in the digital media era, (4IR). Community media policy should consider licensing issues for community broadcasting which might include a single frequency plan. Must make provisions for digital radio; offer distinguished community media support packages especially in areas where there is limited or no economic viability for long-term sustainability of the sector; Must redefine audio-visual service, online video-on-demand (VOD) re- introduce provincial community Television and make policy provisions for a media diversity index or media plurality in South Africa.

There is a broad base of knowledge about how the sector provides the voice of the Community and expanding the opportunities for youth to acquire skills and experience. The community broadcasting programs must be based on developmental framework and provide solution to social ills; and centred on nation building and social cohesion.

5. GOVERNMENT COMMUNICATION SYSTEM THE DRIVER OF COHERENCE OF MESSAGING.

Government communication mechanism is an important tool for imparting information about government’s service delivery work and the state in terms of the Constitution as a structured way of engaging with its citizens.

Research suggest that more frequent and better-quality public communication about government performance can improve the relationship between government and citizens.

Further that communicating public information is therefore a powerful instrument for the reconstruction, transformation of industrial, technological, educational, political and socio-economic development.

The government communication system, through GCIS has the sole responsibility to ensure coherence in disseminating and educating all citizens about government programmes, policies and activities and serve as feedback machinery of government. It also has the daunting task of selling and promoting the nation brand internationally for socio-economic benefits.

The public perceptions of the country locally and internationally depends on the government communications machinery. Thus without a powerful and positive reputation or “nation-brand”, no country can consistently compete for consumers, tourists, investors, immigrants and the respect and attention of other countries and the world’s media.

Government service delivery programmer is the implementation of a mandate it received from its constituents. Regular and consistent interaction with the citizens becomes an imperative that drives service delivery.

A dynamic engagement with society with regard to communication and information dissemination is a constitutional imperative for all the spheres of government.

6. INFORMATION COMMUNICATION TECHNOLOGY

a) institutional arrangements

The 54th national conference resolved, amongst others, that the institutional arrangements within the ICT sector be strengthened through the immediate implementation of the Integrated ICT Policy, augmentation of the capacity of ICASA to be able to discharge its public interest mandate, and the reconfiguration of the executive arm of government to reflect convergence of ICTs.

The executive arm has been duly reconfigured through the formation of the DCDT. This has had the desired effect of delivering policy coherence and oversight.

The augmentation of ICASA requires a comprehensive review of ICASA’s functions, mandate, and organizational structure, funding and operational model. ICASA may be benchmarked against global best practice in the configuration of ICT regulators in developing economies. The review and augmentation of ICASA should improve its operational independence and effectiveness as a regulator.

Furthermore, the review of ICASA should provide legislative certainty on the role of ICASA as a regulator and licensing authority, the Minister as the policy maker, and Parliament as the oversight and appointing authority. ICASA must discharge its functions in accordance with national policy.

Much has happened since the promulgation of the Integrated ICT Policy in 2016. It has become dated in material respects. The policy should be revised policy to take into account, amongst others, the impact of new technologies, the structure and dynamic of competition in the mobile market, the relevance of the Wireless Open Access Network (“WOAN”), open access obligations, the emerging fibre market, the need to attract investment in the deployment of ICT infrastructure, infrastructure sharing, and the best approaches to universal services and access.

b) Rationalization of State-Owned Companies

In line with the resolution to merge Sentech and Broadband Infraco (BBI), the DCDT has developed the SOE Rationalization Framework to merge Sentech and Infraco to establish the State ICT Infrastructure Company. The acquisition progress would be completed in the 2022/23 financial year. The recapitalization of the merged entity will be critical for enabling the company to fulfil its mandate.

In December 2017, Cabinet approved the framework for rationalization. The DCDT is proceeding with the preparations to amalgamate the two entities. The merger or amalgamation raises a fundamental issue whether the government should be investing in ICT infrastructure assets. If so, what the rationale for such investment should be. It is recommended that the government should develop an investment framework or approach that will guide its investment in, or disposal of, particular asset classes in the ICT sector.

c) Licensing of IMT spectrum

ICASA has concluded a successful auction. It was a sophisticated yet well executed auction. ICASA raised R14 billion from the auction. The auction took place within the context of regulatory and policy uncertainty. It is open to question whether the licensing of spectrum complied with national policy and whether its outcomes accord with the resolution of the 54th national conference on the promotion of competition in the ICT sector. Policy and regulatory certainty are necessary conditions to attract investments.

More IMT spectrum remains unassigned. It is important that this spectrum is licensed urgently. Furthermore, South Africa should align its licensing of spectrum with the cycles of the International Telecommunications Union on the declaration of spectrum as IMT.

South Africa should start preparing for the licensing of the millimeter wave spectrum. Further licensing of spectrum should be informed by South Africa’s policy priorities. In particular, South Africa should produce a policy on 5G urgently setting out priorities for the rollout or deployment of 5G, incentives, and how 5G can support the digitization of government.

d) Repositioning of the State Information Technology Agency

In terms of the conference resolution, the government is required to review the mandate of SITA to ensure that it is not only be procurer of IT products and services but an enabler of local capacity to produce software and hardware products. This work has begun but it needs to be expedited.

SITA must also lead the implementation of the digitization of government. Its mandate must be informed by an approved digitization plan for the public service. The Government should clarify the role of the DCDT, Department of Public Service and Administration and SITA in the digitization of government services and the provision of IT products and services.

e) Promotion of effective competition

In line with the Integrated ICT Policy, the 54th national conference called for asymmetric regulation to address existing dominance in the mobile telecommunications industry. In its Data Services Market Inquiry (“DSMI”), the Competition Commission found that high mobile data prices were caused by amongst others, the lack of effective competition in the market for mobile broadband. This was confirmed by ICASA in its Mobile Broadband Services Market (“MBSI”).

The Commission directed the large Mobile Network Operators (“MNOs”) to lower retail prices for mobile broadband services. The MNOs duly obliged. Although this is commendable, regulation of retail prices is undesirable and may have far-reaching consequences or innovation by the MNOs.

ICASA has promulgated a regulation to ensure that the mobile broadband market is competitive. This regulation promotes continuous monitoring by ICASA but imposes no measures that will impact on the lack of effective competition.

It is necessary that these findings be followed by holistic policies and regulatory measures to address the lack of effective competition decisively and comprehensively. ICASA must regulate holistically and ensure that its regulatory instruments are all consistent with the promotion of effective competition.

f) Transformation of ownership and control

By resolution, the 54th national conference encouraged the participation of youth, women, Black people, and people with disabilities in the ownership and control of licensees in the ICT sector. To this end, ICASA has harmonized its regulations with the Broad-based Black Economic Empowerment Act and the applicable sector code.

ICASA now requires licensees to report any drop over 5% in black equity in a licensee. In terms of the Regulations in respect of Limitation of Control and Equity Ownership by Historically Disadvantaged Group, all large Individual Licensees are required to have 30% Black ownership by 31 March 2024.

There is a need for a regulatory impact assessment to determine whether the measures proposed by ICASA will deliver any meaningful transformation of the ownership patterns in the sector. In particular, an assessment should be made whether the applicable flow through principle in the regulations does not dilute the transformation objective of the regulations. Furthermore, the rationale for the legislative and regulatory threshold of 30% needs to be reviewed.

g) Universal service and access

The SA connect phase 1 was completed in the financial year2019/2020. A major drawback in the achievement of SA Connect goals is the lack of funding.

On 28 January 2022, cabinet approved the revised model and implementation plan for Phase 2 of SA Connect. This plan proposes, amongst others, the connection of 18 036 schools, 3 873 health facilities and 8241 tribal authority sites within 36 months. Further, the plan intends to have 15 691 government sites connected including 949 libraries and Thusong Centers. To date close to 600 sites have been connected. Eastern Cape, Western Cape and Gauteng are currently implementing similar initiatives.

The SA Connect initiative is complements by universal service obligations (“USO”) that successful bidders of spectrum must fulfil.

These include the connection of health and education facilities.

The assessment of the effectiveness of past USOs suggests that when contrasted with positive acts by provincial governments in connecting schools and extending ICTs to the marginalized, USO have had far less success. In light of this, it is recommended that the government, the ICT sector, and the sector regulator should conclude a positive social compact on universal service and access. This compact should provide a blue-print on universal access. It should assess the connectivity gap and the policy and legal instruments required to support universal access, the implication of the universal access compact on the local manufacturing and repair of end-user devices, the priority sectors to be connected, the revival of the hub and spoke method of extending access to ICTs, the necessary trade-off between the contribution by licensees and the regulatory obligations.

h) Promotion of investment in ICT infrastructure

The past national conference encouraged the government and the private sector to deploy broadband infrastructure and services. The government efforts are reflected in the execution of the SA Connect roadmap.

The private sector invests in the upgrade, modernization, and expansion of their infrastructure in line with their business requirements. The 2020 State of the ICT sector report suggests an upward trend in investment in ICT infrastructure. The report records an investment of about R38,9 billion in 2019, an increase of about 13,3% over the 5-year period. However, this is not enough to address the underserved areas and the extension of fibre and 4G enabled base stations to marginal towns, townships, and rural areas.

The recent licensing of spectrum is likely to inspire more investments in mobile infrastructure. New technologies such as 5G will also require investments in fibre infrastructure to backhaul and support mobile services. These should not only end in the urban centers.

In order to enable South Africa to advance in technology and to take advantage of benefits of the Fourth Industrial Revolution, there is a need to singularly focus on the acceleration of the deployment of fibre and mobile infrastructure.

The government and the regulator should study options to accelerate the deployment of ICT in South Africa and adopt supportive policy and regulatory infrastructure. These policies and regulations should ensure that scalable, Gigabit-capable, reliable, secure infrastructure is extended to rural areas, marginal towns, and areas identified as underserved.

(i) Fibre

- Lower the costs of deploying fibre;

- Promote the local manufacturing of fibre optic ables;

- Provide tax and trade incentives for the mass deployment of fibre in rural areas and townships;

- Promotion of innovative methods of infrastructure deployment, co-investment and risk sharing arrangements.

(ii) Mobile infrastructure expansion and 5G

- 4G mobile technology to be the minimum technology offering in South Africa. This should be accompanied by an orderly deceleration and decommissioning of 2G and 3G technologies.

- Although the licensing of radio frequency spectrum is neutral, it is not technology agnostic. It is based on available technology ecosystems. The Minister should issue a policy direction on radio frequency spectrum that will promote sustainable investment in 5G and 6G technologies.

- South Africa should have a 5G strategy that sets out the best options in which the private sector and the government may extract maximum benefits from ITU identified 5G use cases. This strategy should set out priorities for the rollout of 5G in sub-national government (smart cities) and specific economic sectors such health, education, and manufacturing.

- The unassigned spectrum in the mid- band should be released in 2024 and the government should provide a policy framework for the licensing of millimeter wave spectrum urgently.

- ICASA should closely monitor the distortion or developments in the mobile and fixed market that may stifle competition and discourage investment infrastructure.

- ICASA must introduce a secondary market for spectrum and provide a regulatory framework to ensure that the resultant transactions do not impact negatively on competition. ICASA must introduce regulations to enable flexible sharing models between licenses, spectrum pooling, lease, and sales of spectrum licences.

(iii) Tax incentives

The government should encourage mass and rapid deployment of mobile and fixed infrastructure through taxation. In this regard, the government may consider the following options as a minimum:

- Real Estate Investment Trust (REIT) framework – extend the framework to cover unlisted ICT infrastructure such as towers and fibre networks. This will enable individual and institutional capital investment in fibre and tower companies and promote more deployment and sharing of critical infrastructure. The proposed recognition of unlisted property as REIT is foreshadowed in the 2017 amendment of the Financial Sector Act and annexure C to the 2019 national budget review.

- Depreciation of ICT infrastructure assets – The current depreciation of fibre is between 10-25 years. There is a need to investigate an appropriate period of depreciation for both mobile and fixed infrastructure to encourage savings and reinvestment.

7. CYBERSECURITY

The 54th national conference observed that there is a need to strengthen capability for cybersecurity to enhance protection of critical databases, systems and critical infrastructure resources, including protecting society against fake news, cybercrime, cyberattacks, and hacking.

On 21 May 2021, the President assented to the Cybercrimes Act, 2020. Furthermore, the government has established the Cyber security hub to monitor potential breaches to security. Since the 54th national conference both the government and the private sector have experienced cyber breaches. There is a need for the ongoing review and heightening of capabilities and technology to monitor cyberattacks on critical databases in South Africa. The advent of 5G and the increased digitization of society and government demand more expertise, capabilities, technologies, and cooperation with other security agencies.

8. SMALL MEDIUM AND MICRO ENTERPRISES

The conference identified the need for the government must put in efforts to ensure that SMME opportunities are created in the whole ICT value chain. Some of the SMMEs have benefited in the rollout of SA Connect but this is restricted to the deployment of infrastructure. It is important that the Minister issues an appropriate policy directions to promote the use of SMMEs in the whole ICT value chain particularly by licensees and their major technology and equipment suppliers.

At retail level, the policy direction should consider the stimulation of economic activity in the township and rural areas.

9. FOURTH INDUSTRIAL REVOLUTION (4IR)

In line with the 54th national conference resolution, the President established the Presidential Commission on the fourth Industrial Revolution. In March 2020, the Commission delivered its report. In summary, the Commission recommends that South Africa should:

- Invest in Human Capital - South Africa’s greatest opportunity and greatest resource is people. In essence, the Commission recommends the redesign of the education system to enable it to produce skills and expertise that will promote innovation and sustain the digital economy. This is consistent with the 54th national resolution which calls for the “[d]evelopment of digital skills, reskilling, target of new entrants in the labour market should deliberately target rural areas and provinces in preparation for the digital economy.”

- Establish an AI Institute - Artificial intelligence (involving the theory and development of computer systems to perform tasks usually requiring human intelligence), is a bedrock technology in the 4IR, underpinning the growing connections in cyber-physical and biological systems.

- Establish a platform for advanced Manufacturing - The revival of South Africa’s manufacturing sector is a core concern of the Industrial Policy Action Plan given the centrality of these for job creation and global competitiveness. To be successful in the context of the 4IR, it is imperative that the manufacturing sector be supported by a state-led research initiative focused on advanced manufacturing and new materials.

- Secure and avail data to enable innovation - The principal opportunity in the 4IR is the storage of large sums of data. Reliable, accurate, standardised, integrated and easily accessible citizen data is critical for building e-government services across sectors such as health, transport and justice. However, this opportunity must be safe guarded by securely organising public data through the bolstering of cyber-security capacity and capabilities. Comsec should be strengthened to enable it to provide the much-needed security of state information.

- Incentivise future industries – The government should consider a set of deliberate incentives to encourage the emergence of industries of the future. For instance, these incentives may be used to support the acquisition and application of advanced technologies in manufacturing.

- Build 4IR infrastructure – the Commission recommends that 4IR be integrated in infrastructure planning. This means that the delivery of other critical infrastructure should be future proof and factor the implications of advanced technology.

- Policy and legislation – amend policies, statutes and regulation that inhibit innovation and the application of new technologies. The overriding objective is to provide flexible environment for experimentation and development of new technologies and ideas.

- Coordinating Council – the Commission recommends the establishment of the Council to be located in the Presidency. It is envisaged that this council will be responsible for implementation, coordination, resource unlocking, accountability, and policy coherence.

The work of the Commission is commended. The implementation of its recommendations and observations requires the government to designate specific capacity. It is recommended that instead of an addition to the established structure of government in the form of the coordinating council, the government should constitute an Inter- Ministerial Committee (IMC) that will oversee the digitization of government and the implementation of the recommendations of the PC4IR. The Chairperson of the Inter-Ministerial Committee can be the interface between the public and the private sector on issues relating to 4IR.

10. DIGITISING GOVERNMENT

The 54th national conference made three critical resolutions on the digitization of government. First, that public servants at all levels be empowered with IT skills and enabled to deliver public services through technological interfaces. Secondly, that government should use ICT to address the communications needs of people with disabilities, use of Apps to address government needs and services, etc. Lasty, digitizing and automating systems will assist in minimizing crime, coordinating information about citizens and Government services, integrating education system, Home Affairs, and the Justice cluster.

In essence, the national conference expected measures to be put in place to ready the government personnel and systems to deliver public services through technology. In the view of the conference, technology can be used to improve services in sectors such as health, education, and crime prevention.

A lesson that may be learned from the administration of the courts is the introduction of the system known as caselines for the filing of court processes and documents and the use of MS Teams to hold court hearings. This improved the efficiency of the courts and allowed the courts to operate seamlessly during the national lockdown.

Covid 19 has accelerated the digitization process of other government processes which impact on the public. The public has had to interact with the government remotely. Now, it is possible for the public to book appointments with different government departments or agencies using the internet. These efficiencies should be harnessed and used a springboard for further innovation.

On education, the 54th national conference resolved that all learners should have the benefit of the advanced electronic communication infrastructure at their schools. The resolution encouraged government to invest nationally in a paperless system. In the Gauteng and the Western Cape, the provincial governments have made strides in the delivery of technology in schools.

There is a need for the Council of Education Ministers to oversee the expeditious implementation of this resolution and to report to an IMC tasked with the oversight of the digitization of government.

The digitization of public service requires a deliberate plan with identified priorities and set timeframes. Similar to the implementation of the report of the PC4IR, it is recommended that this be an agenda of the same IMC. The President should hold this IMC into account on the development and rollout of the government digitization. The municipalities should adopt plans that are consistent with the national plan.

11. DIGITAL TRANSFORMATION OF SOCIETY

The DSMI has confirmed that a majority of South Africans access broadband via mobile handsets. In 2021, just over 60% of South Africans had access to internet. This number is expected to grow to over 67% in 2026. There is now a prevalence of online services, for example, e-market places such as take-a-lot, e-hailing taxi services, grocery retailers in urban centres have online stores, news is available instantly online, and bank customers are now able to transact online and via mobile applications.

There is a significant uptake of social media in South Africa. For instance, according to statista, in 2020, the potential audience that could be reached via facebook in South Africa was estimated at 24 million users.

On entertainment, streaming services are abundantly available and compete with scheduled television and cinemas. The demand side is expected to grow.

The affordability of the handsets and the availability of infrastructure at national level will drive further digitization of society. One of the catalysts for the digitation of society is the digitization of government. If government services are as available online same as banking and other retail services, it is conceivable that this will impact on the uptake of technology by society.

12. POSTAL SERVICES

The 54th national conference resolve that the Postbank must be licensed and capacitated to play meaningful role in providing banking services before the end of term of office of the current Government administration. The Banks Act has been suitably amended to enable the Reserve Bank to issue banking license to Post Bank. The Postbank has applied for the full banking license from the South African Reserve Bank. Based on the current progress, it is concluded that this resolution of the 54th national conference is likely to be met.

SAPO has been riddled with crisis that threatens its sustainability. Technology and competition have changed the postal services are conducted globally. SAPO does not seems have responded well to these changes. SAPO’s sustainability depends on the modernization of its services, adequate capitalization, and the recalibration of its business case. Funds must be made to available to SAPO to redefine its business case and present a future proof postal model that ensures that SAPO is efficient, reliable, and self-sufficient.

C. MATTERS NOT COVERED BY THE 54TH NATIONAL CONFERENCE

1. FINTECH

The introduction of fintech has the potential to democratize finance. If its innovative features are promoted and supported, fintech will extend financial services to the marginalized in society and increase financial services products that may benefit low income households.

Fintech in the form of digital banks, robo- advisers and online platforms will lower the transaction costs because it will transform financial intermediation.

The current challenges to the development of fintech and further innovation is in the intersection of financial services regulation and ICT regulations. Appropriate reforms are required to ensure that the operators and the financial services firms can take advantage of this innovative proposition. In financial services regulation, reforms are required in the licensing of banks or deposit taking institutions as well as the national payment system. On ICT regulation, appropriately licensed operators should be allowed to use airtime credits and data as legal currency.

The greatest challenge to maximise the benefits of fintech while minimising potential risks for the financial system and the protection of consumers.

Policy options include a specific regime for fintech or development of specific requirements that are directed at fintech which may bridge the gap between ICT and financial services regulation.

2. DATA CENTERS AND CLOUD COMPUTING

The increase in online transactions requires mass storage. This is only possible through cloud storage and data centers. The DCDT issued a discussion document of data and cloud computing. Further consultations should be encouraged. There is a need for policy and regulatory interventions to support the growth of data centers in South Africa. South Africa has the potential to be the data center hub in the African continent. It currently has the largest concentration of data centers.

Investment in data centers has the potential to drive economic growth. The Teraco has invested $250 million to build Africa’s largest facility on a single site in Johannesburg.

South Africa has been able to attract hyperscalers to locate their data centers in South Africa. Data centers are part of a unique value chain including electricity, fibre optic cables, IT, hosting and cloud providers, and internet exchanges.

Investment in data centers in catalytic.

3. SPACE AND SATELLITE

The South African satellite capability is built on the earlier efforts of the South African military. The state space infrastructure includes satellite assembly and testing facilities at Houwteq with RF Labs for EMC facilities, Telemetry and tracking capability, launch facility near Bedarsdorp, ground station complex at Hartebeesthoek with satellite and spacecraft tracking capability, magnetic observatory at Hermanus, Sentech infrastructure, Sentech infrastructure, Sentech infrastructure, Gerotek test facilities, National Antenna Test Range and EMC facilities.

South Africa is ranked 31 in Geospatial Readiness The country has grown and developed knowhow in Nanosatellite/CubeSat and Sub-Systems The expertise are driven by universities and entrepreneurs. Most are non-commercial but rather are funded by the State. There is an emerging global trend in Nano Satellites or CubeSats. South Africa need to develop a clear strategy regarding Nano Stats or CubeSats. South Africa must extend their global networks with other Nano Sat companies or countries. This extension will require appropriate bilateral agreements to take the CubeSat program to the next level.

There is a need to consolidate national space assets, allow access of use or transfer ownership to universities. The success of South Africa’s space aspirations depends on collaboration of the government and the private sector, awareness programs in schools, promotion of entrepreneurial activity, higher education institutions (HEIs) and research institutes.

There is a need for a national space policy. It must encompass a clear national space strategy and roadmap to support its implementation over the long-term. In the strategy or roadmap, the government must consider the creation of collaborative environment for the ecosystem to flourish. The leadership and coordination of South Africa’s space aspirations must be harmonized to address fragmentation - multiple government departments manage interactions with various stakeholders leading to silo operation mode.

4. MANUFACTURING

The acceleration of the uptake of technology excites demand for network equipment and end-user devices. South should encourage a localization of assembly and manufacturing of critical network components and end-user devices. The OEMs should be encouraged to localize their production of products or equipment that are consumed on mass scale by the ICT sector or the government. For example, the manufacture of low cost handsets that are used by leaners to access education may be standardized and produced in South Africa.

The increase in the deployment of fibre should support the local production or beneficiation of fibre optic cables in South Africa. Trade or tax incentives should be considered to support local production that is associated with the digitization of society and government.

Issued by the ANC, 20 May 2022