Shoddy planning costs ICASA R1bn

Shoddy planning costs ICASA R1bn

ICASA’s unlawful act of postponing the implementation of a new fee structure creates a number of practical difficulties, says chairman Stephen Mncube in an affidavit.

The Independent Communications Authority of SA’s (ICASA’s) postponement of a new fee structure to April this year was unlawful, and also meant it collected at least R1 billion less than it could have.


ICASA postponed the new regulations because it did not have the necessary software, but its deferral notice was unlawful, and it is now appealing to the South Gauteng High Court to sort out the problem.

If the new fee regulations had come into effect last year, as initially intended, ICASA would have added at least R1 billion to its coffers in spectrum charges. Under the new system, frequency revenue increases to about R1.4 billion, a leap from the just more than R50 million under the old rules.

Implementation was postponed as ICASA did not have software to calculate new fees, and a manual system would not have been accurate enough. It has since found out that the deferral notice was unlawful and it is now in a situation where the new structure should have come into effect, but it was charging based on 1979 rules.

Rock and a hard place

ICASA published Radio Frequency Spectrum Fees Regulations after public consultation in August 2010. The regulations, which were meant to come into effect last year, repelled the 1979 rules.

Under the new regime, some licensees will pay less for spectrum, but others – such as Telkom – will pay much more. Implementation was put off for a year through a deferral notice because ICASA’s engineering department was unable to source software in time to implement the new structure last April and a manual system would be “too inaccurate”.

However, after a letter from Vodacom, ICASA asked counsel for a legal opinion. Gilbert Marcus and Steven Budlender pointed out that deferral notice was unlawful and did not postpone implementation of the new fee structure.

Chairman Stephen Mncube’s affidavit, published on the regulator’s Web site, says the situation creates a “number of practical difficulties” for ICASA. It could not use the 1979 law to charge for spectrum, but was not in a position to calculate payment based on the 2010 regulations.

Administrative burden

ICASA had charged operators under the old regime, and now faces the prospect of having to reverse all the payments and re-calculate fees, says Mncube. It might also have to reverse charges if operators had overpaid.

“This administrative task would be an enormous challenge for ICASA given the number of licensees whose fees would need to be recalculated and whose payments would need to be reconciled.”

ICASA can also not just waive the need for licensees to pay fees, writes Mncube. As a result, it now wants to make sure that payment of fees between April last year and this year is “on a lawful basis”.

The regulator is asking the South Gauteng High Court to have its unlawful action around the deferral set aside so that fees collected between April last year and this year are properly accounted for.

ICASA has cited Vodacom, the Department of Communications and all other holders of radio licences as respondents. It says it does not want any relief from these respondents, except for costs, if they seek to intervene.

The authority has issued 48 901 radio frequency licences, which have been attached to the proceedings only because they have an interest in the matter.