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Sunday, 19 July 2009

Information and Communications Technology Bill 2009

A number of new bills have been enacted into law, covering some quite important areas we have covered on Zambian Economist. Unfortunately the Legislature is extremely poor at ensuring that the Zambian public are sufficiently plugged in between the time the Executive tables the bill and final enactment. Often we only find out about the bill when it has been passed! That said, I think there's still some merit in discussing some of the already enacted legislation, if only to see where a more reasonable Legislature than the present one may consider further refinements. Also part of the mission of the Zambian Economist is to encourage all Zambians to read and understand the laws that are being passed and how they affect us. So I hope it will encourage all of us to read these lengthy documents, which defines many of our freedoms without our input. In the next couple of posts I'll highlight very briefly some of main provisions in new bills from the Third Session of the Tenth Assembly.

Our first take is the Information and Communications Technologies (ICT) Bill 2009. This bill essentially builds on the bootleg version we discussed back in 2007., with a now non-existent URL linking to the document (CAZ removed the document). The ICT Bill 2009 repeals the Telecommunications Act 1994 and Radio Communications Act 1994. Its therefore a very important piece of legislation.

The Positive

There are certainly some important developments in the latest bill beyond changing CAZ's name to the Zambia Information and Communication Technology Authority (ZICTA). ZICTA is now an Economic Regulator with power to regulate tariffs for "dominant" players and agreements on interconnections. We have previously voiced concern over ZAIN's rising dominance, as well as the ability of ZAMTEL to restrict competition through interconnection and access agreements. A particular important point is the idea of "cost reflective tariffs" for dominant players in both interconnection agreements and internal tariffs. This will go some way to helping consumers. Cross subsidies and discounts are also now effectively eliminated - so no longer will ZAMTEL be able to maintain CELL-Z by making the profits from interconnection agreements with ZAIN and MTN (currently their customers effectively prop an inefficient ZAMTEL).

The Fog

ZICTA is now autonomous, but that clearly has been qualified with significant room for Ministers to dictate many areas that remain undefined and those provided by various sections of the Act.

A key area relates to "access agreements" clearly drafted with the International Gateway (IGW) in mind. The Act clearly implies that although ZICTA would regulate these sorts of infrastructure, how the appropriate gateway tariffs are determined may be dictated by statutory instruments issued by Ministers : "The Minister may, by statutory instrument, prescribe matters and other particulars for inclusion in access agreement". In short not only will how much is charged by ZAMTEL for the IGW largely be dictated by Ministers but also fees to anyone wishing to build another IGW would also be dictated by Ministers. No surprise therefore that while can speak of ZICTA pushing for greater competition and cost reflective tariffs in the area of interconnection and "other dominant" arrangements, with access agreement the wording is full of waffle - some musings about "reasonableness" and "non-discriminatory access".

Linked to the above, is the important point of how fees are set for various radiocommunications and electronic licences. It is part of ZICTA's remit to issue licenses but who determines the scope and levels of fees is not clearly defined. Again this appears to be an area where Ministerial influence may yet play significant role. Incidentally, there's no suggestion that further consultation would be necessary in this area with the public.

Another interesting proposal is the Universal Access and Service Fund which is designed, as the name suggests, for financing of universal access and service. The idea is to promote widespread availability and usage of electronic communications in "under-served" or remote areas. The Fund will be administered by ZICTA but unfortunately the Act does not specify just how it shall be funded! All it says is that the Minister, on recommendation by ZICTA, shall provide regulations which may include "the sources of funding and the manner in which the Fund will be paid" and "the annual contributions payable by any licencee to the Fund, shall not exceed the amount prescribed by the Minister...".

One hopes that Ministers would take the idea of asking licencees to contribute too seriously. I have a natural preference for using the the tax system to raise funds, instead of asking companies to pay more on top of taxes. Either we tax these licensees properly with enough revenue available for the sort of fund in question or we don't bother at all. I am yet to be persuade of the reason for such parallel arrangements (unless we are correcting specific market failures, which is not the case here), which only serve to bring yet more fog to the table.

The Bizarre

Perhaps, the most bizarre element in the Act is the proposed composition of th ZICTA Board. If you have ever doubted the chief lobbyists in Zambia with significant sway on the powers that be, one only needs to look at the proposed representative on the ZICTA Board. Can anyone honestly tell me why an act of Parliament needs to specify current national associations like Farmers Union and Law Association of Zambia (LAZ) to have atleast one representative on the ZICTA Board? What about other associations, present and future? What makes LAZ more qualified to sit on the ZICTA Board than say Economics Association of Zambia or Women for Change or Disabled Association of Zambia? It is foolish to prescribe specific associations to take seats on regulatory boards, at worst it is a clear sign of a corrupt Legislature that panders to lobbyists. Another criterion should have been found. In fact there's no clear discussion of how those Board Members will be vetted once chosen by associations, apart from the Minister agreeing to names or asking for another name! I know the concern was to make the Board sufficiently independent, but we also must guard against the pre-eminence of certain associations in legislation.

Going Forward

In general, the Act does represent a positive step beyond the status quo, especially with respect to economic regulation. But then again, we are starting from a very low base. Whether the provisions of the Act translates in tangible improvement in the sector depends on bigger questions - how robust will the board be? will ZICTA have sufficient resources (it will be funded from fines, license fees and GRZ pot)? how will the IGW question be resolved? how will the Zambia Competition Commission (ZCC) relate to ZICTA's new functions? Will ZICTA have enough courage to impose itself sufficiently, in regulating a Government owned company like ZAMTEL, when itself it is subject to Government Ministerial directions? Much will also depend on the quality of the personnel within ZICTA, and that is related to funding!



  2. Cho,

    Thanks for alerting me to the bills earlier. I've had a partial read through the ICT Bill 2009 and have already noticed too that the insertions of Ministerial controls seemed rather odd. I some places it almost popped up from nowhere, as if it was added as an afterthought.

    I'll try and read the rest of it, as you said people should get into the habit of reading and understanding laws because they affect us, however boring the documents may seem.

  3. Kafue,

    Yes, the Single Licence, very apparent from the Bill. Welcome development indeed. Actually we discussed this issue a while back I think.


    The other bill "Electronic Communications and Transactions" is interesting as well. Will write a short blog on it. Just finished reading it.

  4. Too many foreign telecom firms in Zambia?


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