Regulation is a necessary facet of any economy. It provides assurance about the safety or effectiveness of products and services, and set minimum standards, thereby ensuring confidence in products and services. They exist to facilitate investment, encourage a healthy market, and to safeguard and protect consumers. Conversely, poorly crafted regulations can stifle innovation and investment.
In the world of ICT regulations can also assist in connecting connect that vast section of the population — in SA at least — that still has no access to online services. IT is arguably the most important component of the modern economy as digital technologies are now embedded in many sectors including agriculture, banking, retail, transport, and so on.
However, some ICT regulators lag behind frontier technologies such as cloud computing, 5G, blockchain, and the Internet of Things. In SA, the Independent Communications Authority of SA (Icasa) delayed the auction of the much-needed spectrum, which affected the rollout of broadband and stalled innovation and productivity growth generally.
It's not a surprise therefore that industry stalwart Andile Ngcaba has called for Icasa to be shut down or at least be transformed. Existing legislation, which outlines the implementation of SA’s ICT regulatory framework, was drafted when Ngcaba was director-general in the communications department.
Speaking at the AfricaCom 2022 event in Cape Town last week, Ngcaba said that while the ICT regulatory model may have worked at the beginning of the digital era it was outdates now and could be counterproductive. “We need to change regulators ... it’s whether we close them down,” he said.
To thunderous applause, Ngcaba suggested that ICT regulators should rather “enablers” who facilitated new solutions in the digital world rather than focusing on “stopping innovation through regulation”.
On target or wide of the mark?
Is Ngcaba’s argument on the money or is it an attention-seeking comment? Bear in mind that digital transformation has the potential to support every sector of the economy and change societies and market landscapes while improving access to and delivery of services across multiple industries.
Still, this fast-paced innovation has created challenges for regulators. For instance, how can Icasa regulate a vehicle manufacturer that sells connected cars — vehicles that can communicate with other systems, share internet access, and hence data, via a SIM card, Wi-Fi or other wireless technology?
Icasa needs to decide whether to remain an enforcer of outdated legislation or to take a fresh look at its internal processes and be an enabler for the industry and the economy as a whole to flourish. Perhaps it and other ICT regulators should even be phased out? The International Telecommunications Union (ITU), an agency of the World Bank, notes that as policymakers start to implement their digital plans and adapt their regulatory frameworks to the digital economy, they must avoid the mere extrapolation or expansion of existing, potentially outdated laws and regulations to new players or new topics.
“Instead, policymakers should adopt measures — which may include deregulation, self-regulation, or a co-regulatory approach — that will lead to greater innovation, easier deployment of new and emerging technologies, incentivise investment, and focus on inclusivity and collaboration,” ITU argues in a paper titled “Collaborative approaches to policy implementation for digital transformation”.
Alternatively, Icasa must have the flexibility to implement have flexible regulations that are updated regularly to deal effectively with ever-changing digital innovation.
Some industry observers warn that front-runners like Ngcaba may use the slow pace of regulation innovation as a means to stifle competition. On the other hand, consumers may appreciate powerful regulators that can force operators to lower the prices of telecom. For their part, progressive governments would want regulators to enhance the delivery and access of services in all areas, including rural communities.
State of flux
In SA, the current regulatory model clearly is in flux as a result of fast-paced technological developments that bring about complex challenges. It is difficult, if not impossible, for an entity, country, or continent to take on these challenges single-handedly, given the blistering pace of technological and societal change.
Icasa is therefore best advised to work with other regulators. I also believe an overhaul of the current moribund regulatory model for the telecom industry is long overdue. This must happen as quickly as possible to ensure that new technologies aren’t hampered by static, inflexible regulations.
Regulators such as Icasa must initiate that change in partnership with governments, and various other watchdogs stakeholders, including banks, retailers, fintechs, and the like.
In the meantime, SA’s government could revive plans to merge Icasa , the Film and Publication Board, and .ZADNA (the .za Domain Name Authority for SA). However, instead of creating a super-regulator, the government could set up a digital enabler that will focus on new tech solutions and services as quickly as possible, which would be more productive than a gatekeeper.
• Lourie is the founder and editor of TechFinancials.
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