Electronic Communications Act, 2005 (Act No. 36 of 2005)RegulationsAmendment Regulations in respect of the Limitations of Control and Equity Ownership by Historically Disadvantaged Groups (HDGs) and the application of the ICT Sector Code, 2021Explanatory MemorandumBackground |
| 1. | The Authority bears an obligation to promote B-BBEE, in granting a licence, which includes the empowerment of women, the youth and persons with disabilities, in accordance with the requirements of the ICT Sector Code. |
| 2. | In addition to the obligation to promote B-BBEE in granting licences, the EC Act requires the Authority to require an Individual Licensee to demonstrate that 30% of its equity ownership is held by persons from historically disadvantaged groups ("HDG"). |
| 3. | As an organ of state, section 10(1) of the B-BBEE Act requires the Authority to apply the relevant code of good practice issued in terms of the B-BBEE Act in determining qualification criteria for, amongst others, the issuing of licences. |
| 4. | In December 2011, the Authority informed the ICT Sector of its intention to conduct an audit of Individual Electronic Communications Network Services and Electronic Communications Services. |
| 5. | In the 2013 / 2014 financial year, the Authority undertook an audit and review of the regulatory framework governing the broadcasting and telecommunications industries. This review process resulted in the Authority publishing a number of findings documents and reports. |
| 6. | Following this audit process, the Authority published the Discussion Document: Equity Ownership by Historically Disadvantaged Groups and the application of the ICT sector code in the ICT Sector in terms of section 4B of the ICASA Act ("Discussion Document").1 The purpose of this Discussion Document was to inform the ICT Sector of the Authority’s intention to conduct an inquiry in terms of which the Authority’s position in respect of the following would be determined: |
| 6.1 | the implementation of the ICT Sector Code in light of the EC Act’s ownership requirement in respect of HDGs; and |
| 6.2 | the promotion of B-BBEE and equity ownership by HDGs as required in terms of the EC Act. |
| 7. | On 15 February 2019, following the public inquiry process and consideration of stakeholders’ submissions, the Authority published the Findings Document and Position Paper on the inquiry into equity ownership by HDGs and the application of the ICT Sector Code in the ICT Sector2 ("Position Paper"), which outlined the Authority’s position in respect of the abovementioned issues. |
| 8. | Section 4 of the EC Act and section 4(3)(k) of the ICASA Act read with section 13(3)(a) of the EC Act empower the Authority to make regulations on the empowerment requirement to promote B-BBEE. |
| 9. | On 14 February 2020, the Authority published the Draft Regulations in respect of the Limitations of Control and Equity Ownership by Historically Disadvantaged Groups and the application of the ICT Sector Code to address its various obligations toward the promotion of B-BBEE in the ICT Sector3 ("Draft Regulations"). The Authority invited interested parties to submit their representations on the Draft Regulations. |
| 10. | The Authority took its position as set out in the Position Paper into consideration when preparing the Draft Regulations. |
| 11. | Pursuant to a comprehensive public consultation process, the Authority has published these Regulations. |
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1 Government Notice 274 in Government Gazette No. 40759 of 31 March 2017
2 Government Notice 85 in Government Gazette No. 42234 of 15 February 2019
3 Government Notice 91 in Government Gazette No. 43021 of 14 February 2020