ISPA Calls for ICASA Amnesty on Ownership and Control Transactions

30 June 2022

The Internet Service Providers’ Association of SA (ISPA) has issued a call for  the Independent Communications Authority of SA (ICASA) to take steps to clarify industry confusion relating to licensees entering into transactions which affect their ownership structure.

At the heart of this confusion is ICASA’s failure to take a clear position on which transactions will require the regulator’s prior approval because they will have the effect of changing who controls a licence and which transactions require only that ICASA be notified within 7 days of the transaction being implemented.

The difference between these two processes is massive. An application for prior approval requires payment of a non-refundable application fee of R69 409 per licence and can take anything from 8 – 15 months for ICASA to process. A notification has no cost, and no further action is required from ICASA other than to update its records.

“We’ve had a decade of disarray because many licensees have used the wrong process and ICASA is now – notwithstanding its persistent silence on the matter – ordering that licensees’ reverse transactions entered into more than five years ago,” says Dominic Cull, ISPA’s regulatory advisor.

As a result ISPA is requesting that ICASA implement an amnesty in respect of transactions where the required application was not made and take immediate steps to clarify its position on what constitutes a change of control over a licence.

“ISPA is seeking an amnesty allowing affected licensees to approach ICASA to regularise their position without any sanction being imposed. ICASA would still receive and evaluate applications for approvals of transfers,” Cull says.

At the same time, it is critical that all licensees and all those seeking to acquire a licence or an ownership interest in a licence are able to follow a clear set of guidelines issued by ICASA on the correct characterisation of the transaction and the correct process to follow.

ISPA has noted recent proposals to introduce a new process under which a preliminary submission will need to be made to ICASA which will then itself decide which process needs to be followed. But ICASA has failed to offer any insight into how it determines whether a transaction involves a change of control over a licence.

ISPA’s call for clarity echoes its calls for ICASA to limit red tape by reducing the amount of regulation which SME licences are required to comply with. By doing so it would align itself with undertaking given during the President’s 2022 State of the Nation Address to take

 “far-reaching measures to unleash the potential of small businesses, micro businesses and informal businesses”.

The President continued:

There are too many regulations in this country that are unduly complicated, costly and difficult to comply with. This prevents companies from growing and creating jobs.”

This is precisely where SME licensees find themselves. The unduly complicated and unclear regulatory burden on licensees is contributing to licensees surrendering licences as well as acting as a barrier to entry into the ICT industry for SME firms.

See ISPA’s submission on ISPA-Draft-Amendment-Standard-Terms-and-Conditions-for-Individual-Licences-2022050.

More information available at: ispa.org.za.