Stefaans BrUmmer
JAY Naidoo is embroiled in his first major controversy as post, telecommunications and broadcasting minister after he made “secret” eleventh-hour changes to the Telecommunications Bill accepted by Cabinet last week. Stakeholders accuse him of reneging on consensus painstakingly built over more than a year by his predecessor, Pallo Jordan.
The version of the Bill accepted by Cabinet differs significantly from the Telecommunications White Paper — the pinnacle of Jordan’s two-year incumbency — which was approved by Cabinet in March.
The Mail & Guardian has learnt that Willie Currie, the adviser Naidoo inherited from Jordan and who drove the wide-ranging Green Paper and White Paper policy consultations, resigned in protest this week. Key pillars of Jordan’s policy, now overturned, included a phased end to Telkom’s monopoly status and guarantees of an independent telecommunications watchdog.
Said a senior official involved in telecommunications policy formulation: “There had been an extensive consultative process, but at the last minute the minister makes changes … The minister should have gone back to the sector and said, `I’m not happy’ — instead of saying, when he first came in, that the minister has changed, not the policy.”
A telecommunications industry member who was involved in the White Paper formulation said industry stakeholders — with the exception of Telkom, which now appears to have an indefinite reprieve as monopoly operator — were “furious”.
And he warned that because Naidoo’s rewrite brought the proposed industry-wide South African Telecommunications Regulatory Authority (Satra) under the control of his own ministry, which also governs Telkom, there would be a “serious conflict of interest”. This could scare off international investors.
The National Telecommunications Forum (NTF), the industry stakeholders’ body formed in 1993 with representatives from the government, business, labour and civil society, and the main vehicle for Jordan’s consultative process, was to meet Naidoo on Thursday to “ask for an explanation”.
Ironically, the NTF had been the brainchild of Andile Ncaba, then a member of the ANC Department of Information Systems and now postmaster general. Ncaba, who backs Naidoo’s changes, earlier said about the NTF: “One of our objectives … was to create an investor-confident environment where policies could be addressed in the open, unlike during the apartheid years.”
To add to Naidoo’s troubles the five-person Eminent Persons’ Group — appointed by Jordan last December to resolve differences between stakeholders in the drafting of the White Paper — last Friday said in a memo to Naidoo it would not certify the new Bill as consistent with the White Paper, another of its duties.
But group member Dupree Vilakazi said yesterday the memo had been withdrawn on Tuesday after the final version of the Bill — which previously it could not obtain — was handed to it. “By Tuesday we were in full support of what happened in Cabinet.”
A central motive for Naidoo’s rewrite relates to government’s stated intention to privatise — a road Telkom appears to have travelled further than any other state utility, with players like Deutsche Telekom, France Telecom and the United States AT&T seriously eyeing the minority stake, worth as much as R10-billion, government wants to sell.
Naidoo seems to want to squeeze maximum value out of such a deal: The longer Telkom’s guaranteed monopoly is perpetuated, the greater is the value of the stake bought by the equity partner. Naidoo this week acknowledged the change could be seen as a “sweetener” to attract buyers.
But an industry source criticised this as “narrow minded”, saying that international experience has shown increased competition can only increase the strength of the former monopoly operator. Mexico’s Telmex, which was privatised in 1990 when it was twice the size of Telkom, has since grown to six times Telkom’s size.
Jordan’s White Paper proposed that Telkom’s monopoly be maintained for five years while it meets Reconstruction and Development Programme objectives to supply lines to under-serviced communities, followed by two years of phased market liberalisation.
But Naidoo’s Bill omits the time-frame altogether, leaving liberalisation at the sole discretion of his ministry. Vilakazi said: “You need a minister with teeth, not a minister who is toothless.”
The rationale behind the loss of Satra’s independence is less clear, but the official involved in policy formulation claimed it represented “some state of drift, of asserting more and more state power”.
Naidoo’s clipping of the comparable Independent Broadcasting Authority’s wings after he took office — he appropriated its policy-making powers for his ministry — seems to have informed his approach to Satra.
Government appears to have been stung by criticism over the IBA’s slow pace of work, and Naidoo may have felt a repeat of that experience could be avoided by placing the telecommunications regulatory function under his ministry. But this fails to address concerns about a conflict of interest where the same ministry controls Telkom and the body that has to regulate Telkom alongside other industry players.
ENDS