ICASA change of regulations regarding ownership

Thu, 02/21/2019 - 15:30

ICASA has given notice of its intention to create regulations relating to ownership and control of licences issued under the ECA within the context of transformation of the industry. This will apply to all WAPA members which hold a class or individual licence issued by ICASA.

In its Findings Document and Position Paper on its Inquiry into Equity Ownership by Historically Disadvantaged Groups and the Application of the ICT Sector Code in the ICT Sector, ICASA has adopted the following conclusions which will inform the content of the proposed regulations:

  • ICASA will move away from focusing on “historically disadvantaged groups” and instead require that the prescribed minimum equity ownership of 30% be held by “Black People”, defined as:

African, Coloured and Indian people who are citizens of South Africa by birth or descent or who have become citizens of South Africa by nationalization before 27 April 1994 or on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalization prior to that date;

  • Both the 30% minimum equity ownership by Black People requirement and the ICT Sector Code will apply to individual licensees.
  • ICASA does not have the power to prescribe a minimum ownership requirement for class licenses, but it will apply the ICT Sector Code to holders of class licenses.
  • A mandatory minimum B-BBEE status of level 6 in terms of the ICT Sector Code will be compulsory for all licensees and must be maintained for the duration of the licence.
  • ICASA recognises that a process will be required and that licensees will require sufficient time in order to become compliant. It may consider "sliding-scale" principles used in other regulatory contexts to front-load compliance. For example, the sliding-scale principle might stipulate that a licensee would need to be 80% compliant within the first 50% of the duration of the licence.
  • A licensee will need to be compliant with the minimum mandatory B-BBEE status (class and individual licensees) and the minimum equity ownership by Black People (individual licenses only) when making any licence-related application to ICASA, including transfers and renewals of licenses.
  • In assessing whether the equity ownership target has been met, the Authority is satisfied that all ownership principles in the B- BBEE Codes, except for the Modified Flow-Through Principle, may be applied.
  • A single B-BEE verification certificate can be used in respect of both equity ownership and ICT Sector Code compliance.
  • State ownership of licensees will be recognised as ownership by Black People where the state entity is designated as a B-BBEE Facilitator by the Minister of Trade and Industry, in accordance with the B-BBEE Codes.

 

In short:

 

Current

Proposed

IECS and IECNS licences

30% ownership by Historically  Disadvantaged Individuals / Groups

30% ownership by Black People

+

Obtain and maintain minimum B-BBEE status of level six

CECS and CECNS licences

No obligations

Obtain and maintain minimum B-BBEE status of level six

 

Next steps:

  1. ICASA will proceed to draft proposed regulations over the next few months, which draft regulations will be published for public comment and thereafter finalized. It is not clear whether there will need to be any amendments to legislation.
  2. WAPA will engage with members so that it can get guidance from its members in approaching ICASA regarding the above.
  3. Full 105 page document available from https://www.ellipsis.co.za/wp-content/uploads/2019/02/Findings-Document-and-Position-Paper-HDI.pdf