Case Law[2025] ZAGPPHC 193South Africa
Vodacom (Pty) Limited v Independent Communications Authority of South Africa (ICASA) and Others (054724/2024) [2025] ZAGPPHC 193 (21 February 2025)
High Court of South Africa (Gauteng Division, Pretoria)
21 February 2025
Headnotes
during March 2022. Billions were paid by MNOs for obtaining licences from ICASA for assigned spectrum.
Judgment
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# South Africa: North Gauteng High Court, Pretoria
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## Vodacom (Pty) Limited v Independent Communications Authority of South Africa (ICASA) and Others (054724/2024) [2025] ZAGPPHC 193 (21 February 2025)
Vodacom (Pty) Limited v Independent Communications Authority of South Africa (ICASA) and Others (054724/2024) [2025] ZAGPPHC 193 (21 February 2025)
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sino date 21 February 2025
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO:
054724/2024
(1)
REPORTABLE: YES/NO
(2)
OF INTEREST TO OTHER JUDGES: YES/NO
(3)
REVISED.
DATE 21/02/2025
SIGNATURE
In
the application of:
VODACOM
(PTY)
LIMITED
Applicant
and
INDEPENDENT
COMMUNICATIONS AUTHORITY OF
SOUTH
AFRICA (“ICASA”)
First Respondent
CHAIRPERSON,
INDEPENDENT COMMUNICATIONS
AUTHORITY
OF SOUTH AFRICA
Second Respondent
MOBILE
TELEPHONE NETWORKS (PTY) LTD (“MTN”)
Third Respondent
CELL
C (PTY) LTD (“CELL C”)
Fourth Respondent
LIQUID
TELECOMMUNICATIONS SOUTH AFRICA
(PTY)
LTD (“LIQUID”)
Fifth Respondent
TELKOM
SA LIMITED
Sixth Respondent
RAIN
(PTY) LTD
Seventh Respondent
JUDGMENT
LABUSCHAGNE
J
[1]
Vodacom applies for interim relief in Part A of proceedings set down
for
a special allocation on the basis of semi-urgency. In Part
A, Vodacom seeks, pending final determination of Part B proceedings,
an interdict:
1.1
Interdicting MTN from using or transmitting on the following radio
frequency
spectrum (“RFS” or “spectrum”);
1.2
In the 1800 MHz band, from 1749.7 to 1759.9 MHz paired with 1842.9 to
1854.9
MHz, which is licensed to the fourth respondent (Cell C);
1.3
In the 1800 MHz band, from 1710.3 to 1722.3 MHz paired with 1805.3 to
1817.3
MHz, which is licensed to the fifth respondent (Liquid);
1.4
In the 1800 MHz band, from 1722.3 to 1722.7 MHz paired with 1817.3 to
1817.7
MHz, which is the guard band;
1.5
In the 2100 MHz band, from 1935 to 1950 MHz paired with 2125 to 2140
MHz, which
is licensed to Cell C; and
1.6
In the 900 MHz band, from 880 to 890 MHz paired with 925 to 935 MHz,
which is licensed
to Cell C;
1.7
It seeks an interim interdict against Cell C, restraining it from
transmitting on
the following spectrum:
1.7.1
In the 2100 MHz band, from 1950 to 1965 MHz paired with 2140 to 2155
MHz,
which is licensed to MTN; and
1.7.2
In the 900 MHz band, from 905 to 915 MHz paired with 950 to 960 MHz,
which
is licensed to MTN.
1.8
Interim relief is sought against Liquid restraining it from
transmitting the
following spectrum:
1.8.1
In the 1800 MHz band, from 1722.7 to 1734.7 MHz, paired with 1817.7
to 1829.7
MHz, which is licensed to MTN; and
1.8.2
In the 1800 MHz band, from 1722.3 to 1722.7 MHz, paired with 1817.3
to 1817.7
MHz, which is the guard band, for which each of MNT, Cell C
and Liquid do not hold licenses issued by ICASA.
[2]
In Part B proceedings, Vodacom seeks an order declaring that:
2.1
The decision taken by ICASA on or about 14
June 2022 to approve the
applications by MTN and Liquid and by MTN and Cell C for RFS sharing
in the form of RFS pooling is unlawful,
reviewed and set aside.
2.2
Any decision taken by ICASA on a date unknown
to Vodacom, authorising
MTN, Cell C and Liquid to use and transmit on guard bands, whether
done implicitly or otherwise, is reviewed
and set aside.
RELEVANT
BACKGROUND
[3]
Radio frequency spectrum is the tool that mobile network operators
(MNOs) use
to compete. It is a finite resource under state control,
to be used for the benefit of all. Lower frequency bands provide
broader
geographic coverage for mobile service communications. Higher
frequency bands offer higher capacity and faster data speeds but
cover smaller areas.
[4]
Three radio frequency bands are relevant to this application, namely
the 2100,1800 and 900 MHz bands. The guard bands (buffers in between
allocated spectrum) in the 900 MHz spectrum band have been
removed by
ICASA and the issued licences of the respondent MNOs have been
amended to cater for the effect of the removal of guard
bands.
[5]
A special spectrum sharing dispensation applied during the pandemic.
On
24 April 2020 ICASA approved an application by MTN and Liquid to
temporarily pool their radio frequency spectrum in the 1800 MHz
band. The duration of the approved spectrum pooling arrangement
would be from date of approval until three months after the
end of
the National State of Disaster.
[6]
There were legal disputes between cell phone companies and ICASA
regarding spectrum
allocation. The wrangling culminated in an auction
of spectrum which was held during March 2022. Billions were paid by
MNOs for
obtaining licences from ICASA for assigned spectrum.
[7]
In the period 4 to 11 April 2022 MTN, Cell C and Liquid applied to
ICASA
in terms of Regulations 18(3) and 18(4) for approval of
spectrum pooling arrangements.
[8]
On 12 April 2022 ICASA asked MTN, Cell C and Liquid to “
provide
more information/details on how the pooling arrangements as applied
for will in particular promote the objects set out in
terms of
section 2(f)
of the
Electronic Communications Act No. 236 of 2005
.”
The subsection states as one of the objects of the ECA the
promotion of competition in the Information Communications and
Technology
Sector.
[9]
On 4 May 2022 MTN, Cell C and Liquid submitted a response to ICASA’s
request in terms of
section 2(f)
of the ECA.
[10]
On 10 June 2022 ICASA’s CEO signed a memorandum to the Council,
recommending
approval of the applications.
[11]
On 14 June 2022 ICASA’s Council approved “
the
application submitted by (MTN and Cell C) to share their respective
assigned radio frequency spectrum in the IMT 900 MHz;
IMT 1800
MHz and IMT 2100 MHz bands”
and “
the application
submitted by (MTN and Liquid) to share their respective assigned
radio frequency spectrum in the IMT 1800 MHz band.”
[12]
On 21 June 2022 ICASA wrote to MTN, Cell C and Liquid, advising them
that their applications
have been approved subject to certain
conditions.
[13]
On 30 June 2022 the temporary spectrum pooling arrangement between
MTN and Liquid
came to an end.
[14]
In the latter part of 2022, Vodacom contends that it started noticing
anomalous results
being yielded by its tests of the relative
performance of MNOs in the market, especially as to speed
relative to spectrum
holding and site infrastructure.
[15]
In March 2023 Vodacom contends that it noticed that MTN’s
download and upload speeds
consistently and increasingly outperformed
other MNOs download and upload speeds.
[16]
In August 2023 Vodacom conducted further tests. Vodacom
addressed a letter to ICASA
requesting information about MTN’s
entitlement to transmit on spectrum not licensed to it by ICASA.
[17]
ICASA did not respond to Vodacom’s letter and Vodacom made a
formal request
on 5 December 2023 for access to information in terms
of the Promotion of Access to Information Act, 2 of 2000 (PAIA).
[18]
On 22 February 2024 Vodacom addressed a follow-up letter to ICASA,
following up on
the PAIA request.
[19]
On 28 February 2024 ICASA responded seeking an indulgence, contending
that
it is considering the request and has requested MTN, Cell C and
Liquid’s consent in terms of sections 47 and 48 of PAIA and
would respond on or before 26 March 2024.
[20]
On 4 March 2024 Vodacom agreed to ICASA’s requested
indulgence.
[21]
On 14 March 2024 ICASA responded and informed Vodacom that it
received applications from
MTN, Cell C and Liquid on 4 April 2022 and
approved them on 14 June 2022 (and ICASA attached a redacted copy of
the Council’s
meeting minutes and copies of the letters dated
21 June 2022, informing MTN, Cell C and Liquid of the approval of
their applications).
ICASA undertook to respond to the balance
of the requests in response to Vodacom’s 4 March 2024 letter by
29 March 2024.
[22]
On 29 March 2024 ICASA responded by refusing access to MTN, Cell C
and Liquid’s
applications.
[23]
On 8 and 22 April 2024 Vodacom contends that it conducted further
tests, which
showed that the pooling arrangements were skewed in
MTN’s favour.
[24]
On 17 May 2024 Vodacom launched the current two-part application.
Part A was
set down for the hearing of urgent interim relief on 13
August 2024.
[25]
Answering affidavits were filed by Liquid (on 26 June 2024), ICASA
(on 28 June 2024) and
Telkom filed its explanatory affidavit on 27
June 2024.
[26]
On 4 July 2024 Vodacom wrote to the DJP requesting a special
allocation for Part A.
[27] On
1 July 2024 Cell C filed its answering affidavit to Part A
proceedings. MTN followed
soon, on 5 July 2024. Vodacom
filed its replying affidavit in Part A proceedings on 18 July 2024
and ICASA filed its answer
to Telkom’s explanatory affidavit in
Part A proceedings on 30 July 2024. A meeting was secured with
the DJP in August,
a week after the set down of 13 August. The matter
was removed from the urgent court roll and that meeting gave rise to
the hearing
before this court.
THE
CASE FOR VODACOM
[28]
The licensing and the use of radio frequence spectrum is governed by
the Electronic
Communications Act, 36 of 2005 (“the ECA”).
High Demand Spectrum (HDS) is a finite resource in the ICT sector.
The
demand for HDS far outstrips the supply.
[29]
Section 31(1) of the ECA provides that no person may transmit any
signal by radio
or use radio apparatus to receive any signal by radio
except under and in accordance with a radio frequence spectrum
license granted
by ICASA to such person in terms of the ECA.
[30]
In terms of the aforesaid section an individual applies for and
is granted a license
for a specific block of spectrum in a frequency
band, measured in MHz. What Vodacom impugns in Part B
proceedings is the
approval by ICASA of the pooling of high density
spectrum between MTN, Cell C and Liquid. Vodacom contends that
particularly
MTN is favoured in respect of its available spectrum
bandwidth to the “
serious competitive prejudice of Vodacom
(and Rain and Telkom)”
.
[31]
Vodacom advances the following propositions :
First,that
MTN and its pooling associates have been permitted to unlawfully
transmit on significant blocks of HDS for which they
are not licensed
as required by the ECA in the regulatory framework. Vodacom
contends that this was done in secret without
notice to Vodacom and
without public participation.
Second,
an application for sharing has resulted in impermissible pooling –
i.e. creation of a new block of spectrum that includes
the previously
unassigned guard bands – i.e. buffer zones between licensed
spectrum bands. Without the incorporation of the
unlicensed guard
band into the pool of spectrum, the pooling in question would not
work effectively. On this latter issue
there is agreement
between Vodacom and the respondent MNOs.
Third,
that allowing the pooling parties to transmit on these guard bands
without having had these licensed to them under the process
prescribed for the licensing of HDS (i.e. Regulation 7), is
unlawful. The application is aimed at directing MTN, Cell C and
Liquid to refrain from transmitting on spectrum for which they are
not lawfully licensed, pending the review and setting aside
of
ICASA’s approval of the pooling arrangements in Part B.
[32]
Vodacom posits the need for licences based on sec 31 and Regulation
18 for each pooling
participant for the shared spectrum, after
following a process of public participation,ie. a transparently
consultative process
with role players in the ICT sector. The
latter flows from the high demand and public interest in
HDS and the effect
its assignment has on competition between MNOs.The
need for public participation flows from the ECA and its regulations.
Alternatively
it flows from sec 3 or 4 of PAJA.
Vodacom contends that ICASA does not
have the power to approve spectrum pooling arrangements under the
spectrum sharing Regulations.
Vodacom further contends that
ICASA could not approve the use of guard bands in the 1800 MHz band
without following a similar spectrum
harmonization process and
issuing or reissuing spectrum licenses, including the guard bands as
it did in respect of the 900 MHz
band.
URGENCY
[33]
ICASA, MTN, Cell C and Liquid dispute that the application is urgent,
contending
that Vodacom has been dragging its feet. They
contend that Vodacom was already aware in November 2022 of Vodacom’s
enhanced performance. MTN contends that Vodacom has
unreasonably delayed the commencement of the application contending
that
Vodacom knew in April 2022 of the pooling agreement. ICASA
raises the same point, using April 2022 as starting date.
MTN
further contends that Vodacom can obtain substantial redress in due
course.
[34]
Vodacom points a finger at ICASA, contending that ICASA as regulator
is to
blame for the delay. The glacial pace at which it dealt
with Vodacom’s request for information in terms of PAIA caused
an undue delay. In the end, the information sought was refused.
[35]
The application was launched in May 2024. The hearing dates of
this matter
before this Court (13 and 14 February 2025) were
determined following the case management meeting with the Deputy
Judge President
in August 2024 as set out in the chronology above.
[36]
Vodacom did tests to determine the reason behind MTN’s upload
and download
speed and it is contended by the respondents that the
information derived from such tests should have caused the earlier
institution
of these proceedings. Vodacom contends that it was
required to determine from ICASA whether there were licensed
amendments
to MTN’s spectrum holdings and to determine how this
was possible without a public participation process. Vodacom
therefore
engaged with ICASA as regulator and the regulator first
delayed the process and then refused to provide the information as
requested.
[37]
Vodacom contends that there is clear unlawfulness in the utilisation
of pooled spectrum,
which includes guard bands, and it is contented
that the rule of law on its own could justify the Court being
approached on the
basis of urgency.
[38]
In
Pharmaceutical Manufacturers Association of SA and Others: In
re:
Ex parte
application of President of the RSA
and Others
[2000] ZACC 1
;
2000 (2) SA 674
(CC) at paragraph
[40]
, the
Constitutional Court held that:
“
The rule of law is
specifically declared to be one of the foundational values of the
constitutional order, fundamental rights are
identified and
entrenched, and provision is made for the control of public power
including judicial review of all legislation and
conduct inconsistent
with the Constitution.”
[39]
In
Mogalakwena Local Municipality v Provincial Executive Council,
Limpopo and Others
[2014] 4 All SA 67
(GP);
2016 (4) SA 99
(GP)
at paragraph [65] the following was stated regarding urgency in
vindicating the rule of law:
“
The case for the applicant
is that the respondents are seeking unlawfully to take away its
lawfully derived power to govern the
municipality at a local
government level. That case, if ultimately substantiated, is
directed at redressing nothing less
than a serious violation of the
rule of law. The prejudice to the applicant is manifest.
Every action taken by someone
who is in law a usurper of power is
unlawful and, especially where third parties are involved, might give
rise to complex questions
of fact and law.”
[40]
The grounds for urgency raised by Vodacom include the following:
40.1
Vodacom suspected over time that there was something untoward with
the enhanced performance of MTN’s network. However, it
had no evidence nor any other basis on which it could approach
a
Court for relief until after 14 March 2024 when ICASA eventually
disclosed that it had approved spectrum sharing and pooling
arrangements by MTN, Cell C and Liquid;
40.2
This was after a protracted engagement since October 2023 by Vodacom
trying to extract this information from ICASA;
40.3
The shortage of information and ICASA’s refusal to make the
applications that it had approved available, resulted in further
delays. The application was brought as soon as ICASA had
responded, and the respondents were provided with reasonable time
periods to file their responses.
[41]
In my assessment it would be premature to launch an application
without obtaining
information from the regulator. It is not
unreasonable to seek clarity from ICASA on whether MTN or any other
MNO was licenced
to transmit and receive signal on spectrum bands not
reflected in the public licence register. The regulator is the
repository
of public information on who is licensed for use of
spectrum. A significant period of time was wasted by ICASA avoiding
its duty
to be transparent in the face of a reasonable request for
information.
[42] It
is also correct that a significant amount of time has elapsed since
the application
was instituted. It was envisaged to be heard in
August 2024. However, the delay since then in hearing the
matter is
a function of the administration of justice. The
papers were too voluminous for hearing in the urgent court in August
2024.
The duration of argument was also two days. In terms of
current practice directives as to the volume of papers and the
duration
of argument a special allocation was the only way for this
matter to be heard on an expedited basis. If the matter were not
heard
in this special allocation on the basis of semi-urgency, a
change in status quo that would set in and the establishment of
entrenched
rights before the proceedings are heard, may evolve.
[43]
The applicant contends that the advantage that MTN has gained cannot
be quantified
in a damages claim. If Part A is not heard it will not
obtain substantial redress in due course. The mere passing of
time
may result in review relief in Part B, though established, being
declined (see
The Chairperson: Standing Tender Committee and
Others v JFE Sapela
Electronics (Pty)(Ltd)
2008 (2) SA 638
(SCA) at apr [20] and [29]). This is a valid consideration.
[44]
On balance, I am satisfied that the matter should proceed to be heard
on the merits
insofar as there are allegations of unlawful
transmission arising from the pooling of spectrum. This is a
rule of law issue
which is sufficient to establish at least
semi-urgency.
THE
OUTA PRINCIPLE
[45]
As a defence the respondents raise the OUTA principle, contending
that the relief
sought will cause separation of powers harm. It will
interfere in the functioning of ICASA as regulator. Vodacom counters
this
contention by pointing out that it does not seek relief against
ICASA in Part A. It seeks to prevent the implementation by
private beneficiaries “
of an administrative authorisation
given to them that was unlawfully given. This does not entail
the OUTA principle at all”
(paragraph 36.3 of Vodacom’s
heads of argument).
[46]
As an alternative it is contended by Vodacom that the unlawfulness is
so manifest
that it meets the “
clearest of cases”
threshold applied in the OUTA context.
[47]
In
EFF v Gordhan (Economic Freedom Fightrs v Gordhan and Others;
Public Protector and Another v Gordhan and Others)
2020 (6) SA
325
(CC) at paragraph [59] and [60] the Court held:
“
[59] While I acknowledge
that OUTA is distinguishable on the facts from the present matter, it
is this very distinction that highlights
the lack of prospects of
success in the present case. In OUTA, this Court held:
‘
The
order prohibits SANRAL from exercising statutory powers flowing from
legislation whose constitutional validity is not challenged.
In
particular, the order prevents it from raising revenue through tolls,
a power the statute vests in it … At the behest
of a court
order, the National Executive is prevented from fulfilling its
statutory and budgetary responsibilities for as long
as the interim
order is in place.’
[60] What is evident from the
above is that the interim order sought in OUTA would thwart the
Executive from carrying out
its statutory and budgetary duties as
required by statute. Plainly put, it would prevent the
Executive from doing what it
was meant to do. Here, the interim
interdict sought is different. The Public Protector has already
performed the duties
and functions that the Constitution requires of
her. As I have stated before, the SARS Report has been
completed. Her
powers have been exercised and the SARS Report
has been published. The interim interdict sought in the High
Court therefore
did not have the effect of subverting her
constitutional powers.”
[48]
In
Eskom Holdings SOC Ltd v Vaal River Development Association
(Pty) Ltd
2023 (4) SA 325
(CC) at paragraph [303] the
Constitutional Court stated:
“
OUTA must be read in the
context of the fact that what was at issue there was a highly policy
laden decision by a member of the
Executive arm of government and
violations of fundamental rights protected in the Bill of Rights were
not at issue. In the
main, it is those two considerations that
informed the Court’s final conclusion. I believe that the
role to be played
by this factor must depend on the nature of the
Executive decision. Ordinarily, this factor must apply on a
sliding scale.
The more policy laden or polycentric the
decision, the more the role this factor must play in influencing the
court’s determination.
The lesser the policy-ladenness or
polycentricity, the lesser the influence of this factor.”
[49]
Vodacom stresses that the Court is not requested to assess and weigh
the decisions
made by ICASA in Part A proceedings. The
unlawfulness in question is a matter for the Court to determine,
rather than ICASA.
The question whether procedural fairness was
required and properly afforded is not a question that in any way
engages the need
for deference on the part of the Court to any
polycentric expertise driven or policy laden decision on ICASA’s
part (see
Vodacom’s heads of argument, paragraph 39).
[50]
My assessment of this defence appears later.
FAILURE
TO EXHAUST INTERNAL REMEDIES
[51]
The applicant approaches the Court on the basis of PAJA, contending
that the decision
in Part B is administrative action.
[52]
Section 7(2)(a) of PAJA provides that no Court or tribunal shall
review an
administrative action in terms of the Act unless any
internal remedy provided for in any other law has first been
exhausted.
The Court will however permit in exceptional
circumstances an application to be exempted from this requirement –
section
7(2)(c) of PAJA.
[53]
In
Dengetenge Holdings (Pty) Ltd v Southern Sphere Mining and
Development Company Ltd and Other
2014 (5) SA 138
(CC) the
Constitutional Court stated:
“
[119] In clear
and peremptory terms, section 7(2) prohibits courts from reviewing
'an administrative action in terms
of this Act unless any internal
remedy provided for in any other law has first been exhausted'.
Where, as in this case, there is
a provision for internal remedies,
the section imposes an obligation on the court to satisfy itself that
such remedies have been
exhausted. If the court is not satisfied, it
must decline to adjudicate the matter until the applicant has either
exhausted internal
remedies or is granted an exemption. Since PAJA
applies to every administrative action, this means that there can be
no review
of an administrative action by any court where internal
remedies have not been exhausted, unless an exemption has been
granted
in terms of section 7(2)(c). This is apparent from the
terms of section 7(2)(a) which begins with the words ‘[s]ubject
to paragraph (c).”
[120] Section
7(2)(c) empowers a court to grant an exemption from the duty of
exhausting internal remedies if,
as observed by the Supreme Court of
Appeal in
Nichol
, two pre-conditions are established.
These are exceptional circumstances and the interests of justice.”
[54]
MTN, Cell C and ICASA contend that Vodacom should have employed
ICASA’s
own complaints procedure. Section 17C(1)(a) of the
ICASA Act provides for disputes to be referred to the Complaints and
Compliance
Committee (the “CCC”). Vodacom contends
however that the complaints procedure does not encompass instances
where
the complaint is against ICASA itself. The challenging of
administrative action by ICASA is based on the contention that
ICASA’s decisions purport to authorise violations of the ECA
and the RFS Regulations. Any such complaint could not be
referred to an internal body such as CCC. ICASA cannot review
its own approvals. I agree.
[55]
Liquid and Cell C contends that Vodacom complains about the
anti-competitive elements
of the pooling arrangements (including that
they amount to prohibited practices (including pre-implementation of
an unnotified
merger, as understood in Chapter 2 of the Competition
Act) and contends that this Court lacks jurisdiction to determine
this dispute.
It is contended that Vodacom ought to have
proceeded in the Competition Tribunal to enforce its allegations that
the arrangements
entail the prohibited implementation of unnotified
merges. Liquid contends that Vodacom should have applied for
interim relief
before the Competition Tribunal in terms of section
49C of the Competition Act.
[56]
Vodacom’s counter argument to these contentions is that it has
not founded
its case thereon that MTN, Cell C and Liquid have engaged
in prohibited practices in terms of the Competition Act. The
statutory
violations relied upon by Vodacom are to be found in the
licensing framework of the ECA and attendant Regulations, and not in
a
violation of the Competition Act.
[57]
I accept as correct the submissions by Vodacom. While Vodacom
initially considered
approaching the Competition Tribunal, and
requested the respondents to respond, the respondents were not
amenable. To now suggest
otherwise loses sight of the nature of the
complaint of Vodacom. It is a legality issue framed in terms of PAJA,
not a complaint
about unlawful pre-implementation of an unnotified
merger or prohibited practices under the Competition Act.
[58]
None of the suggested internal remedies are adequate remedies, and
none of them stands
in the way of these Part A proceedings. This
issue will also feature in Part B proceedings. I deal with the
exhausting of internal
remedies as precursor to the establishment of
the prima facie right to review relief as there is no High Court
review jurisdiction
unless internal remedies have been shown to have
been exhausted, or, in exceptional circumstances, where an exemption
in terms
of section 7(2) of PAJA is granted.
[59]
Even if I am wrong in this regard, the raising of this defence is to
my mind premature.
It is truly a matter for the review court. And the
internal remedies, if established, may be exhausted even after
initiating review
proceedings (see section 7(2)(b) of PAJA).
[60]
It is necessary to understand the legislative landscape pertaining to
radio frequency
spectrum in order to assess the requirements for an
interim interdict.
THE
LEGISLATIVE FRAMEWORK OF RADIO FREQUENCY SPECTRUM
[61]
The radio frequency spectrum is a national asset. Deriving benefit
from it
through improved electronic communication is central to the
attainment of social upliftment and the realisation of enshrined
fundamental
rights.
[62]
“Fast and reliable electronic communication services have the
potential to
improve the quality of life of all people in South
Africa”- see
City of Tshwane Metropolitan Municipality v
Link Africa (Pty)(Ltd)
2015 (6) SA 440
(CC) at para121. ICASA is
the broadcasting authority envisaged by section 192 of the
Constitution. Its constitutional mandate
is to regulate
broadcasting in the public interest and to ensure fairness.
[63]
ICASA is established by means of the ICASA Act, 13 of 2000, which Act
restates the
constitutional mandate of section 192 in the objects of
the Act as formulated in section 2(a).
[64]
The ICASA Act requires a public register (section 4A) of licenses to
be kept by ICASA,
that also reflects amendments to such licenses.
The public, against payment of a prescribed fee, has access to the
public
register of licenses.
[65]
Complaints about misuse of licenses may be lodged with ICASA and,
where ICASA
deems it appropriate, such complaints will be referred to
the Complaints and Compliance Committee (CCC). Such complaints
may relate to use of spectrum by licensees or non-licensees.
The complaints and Compliance Committee has the authority to
investigate such complaints in terms of section 17C of the ICASA
Act. It is this remedy which the respondents contend
constitutes
an alternative remedy to Vodacom.
[66]
The primary source of ICASA’s powers pertaining to radio
frequency spectrum
is to be found in the Electronic Communications
Act,36 of 2005,the RFS Regulations and the ICASA Act. In what
follows reference
is made to those portions of the ECA that deal with
the interests of the public and the issue of fairness as envisaged by
section
192 of the Constitution and section 2(a) of the ICASA Act.
[67]
The provisions of the
Electronic Communications Act are
instrumental
in securing reliable electronic communications. Access to these
services are important for the achievement
of
constitutional rights and values. In
The Minister of
Telecommunications and Postal Services v Acting Chair, Independent
Communications Authority of South Africa
[2016] ZAGPPHC 883 (30
September2016) Sutherland J(as he then was) explained:
“
Access to the utility of the
frequency spectrum implicates the optimal achievement of several
constitutional values and rights,
including the freedom of trade,
modern education and the dissemination of information pursuant to
freedom of expression. Achieving
effective access to its utility
implicate equality too because of its role in facilitating these
several rights.”
[68] The
objects of the
Electronic Communications Act (ECA
) include:
68.1
To promote and facilitate the development of interoperable and
interconnected networks
(section 2(b))
;
68.2
To ensure the efficient use of radio frequency spectrum
(section
2(e))
;
3cm; text-indent: -1.5cm; margin-bottom: 0cm; line-height: 150%">
68.3
To promote competition in the ICT sector
(section 2(f))
;
3cm; text-indent: -1.5cm; margin-bottom: 0cm; line-height: 150%">
68.4
To promote open, fair and non-discriminatory access to broadcasting
services
(section 2(g))
;
3cm; text-indent: -1.5cm; margin-bottom: 0cm; line-height: 150%">
68.5
To refrain from undue interference in the commercial activities
of
licensees while taking into account the electronic communication
needs of the public
(section 2(y)).
[69]
The means by which ICASA regulates radio frequency spectrum is
through a system of
licensing. Unless services have been
exempted by ICASA in terms of
section 6
, no person may provide any
service (as defined) without a license –
section 7.
[70]
A license confers on the holder the privileges and subjects the
licensee to the obligations
in the Act and as specified in the
license (section 5(12)).
[71]
When an application for an individual license is made, there is a
process of
public participation. ICASA is required to give
notice of the application in the Government Gazette and the
interested parties
are offered an opportunity to submit written
responses, which must be considered by ICASA (sections 9(2) and 9(5)
of the ECA).
[72]
The renewal of licenses also attracts a public participation process
(section 11(3)
read with section 9(2)).
[73]
In licensing and assigning the use of radio frequency spectrum, ICASA
must take into account
the efficient utilisation of spectrum,
including allowing shared use of spectrum when interference can be
eliminated or reduced
(section 30(2)(b) of the ECA).
[74]
Central to the issues in Part A of these proceedings is section 31.
Section 31(1)
makes it clear that no person may transmit any signal
by radio or use a radio apparatus to receive any signal except in
accordance
with a radio frequency spectrum license.
[75]
The discretionary power of ICASA in prescribing procedures and
conditions regarding
applications for licenses appears from section
31(3). In terms thereof, the authority may take into account
the objects of
the Act in prescribing procedures and conditions for:
75.1
RFS licenses where there is insufficient spectrum available to
accommodate demand (section 31(3)(a);
75.2
The amendment of a license or the transfer of control of a license
(section 31(3)(b);
75.3
Where an application is made for sharing (section 31(3)(c)).
[76]
ICASA may amend a radio frequency license if requested and may grant
such amendment
if it is fair and does not prejudice other licensees
(section 31(4)).
[77]
The interests of the public is apparent not only from the Act but
from the published
Radio Frequence Spectrum Policy of the government
which was published in terms of section 3(1) of the ECA (Government
Notice 306
in GG3119 of 16 April 2010). In terms of paragraph 2.1.2
of the policy the management of radio frequency spectrum is subject
to
government authority “and spectrum must be managed
efficiently so to be of greatest benefit to the entire population.”
[78]
The Radio Frequency Spectrum Regulations (RFS Regulations of 2015)
speaks of RFS assignments
being exclusive or shared (Regulation
3(4)).
[79]
ICASA may subject even a standard application to a public
consultation process (Regulation
5(5)).
[80]
More to the point in these proceedings is Regulation 18 which
pertains to an application
for sharing radio frequency spectrum.
The concept of sharing is defined in Regulation 18(1). It
relates to an instance
where “two or more licensees have been
granted licenses for or part of same frequency assignment.”
[81]
Even where a party seeks to have exclusive use of radio frequency
spectrum, ICASA
may require licensees to share in assigned frequency
with other licensees (Regulation 18(2).
[82]
Where parties seek to apply for a sharing of radio frequency
spectrum, they may apply
to ICASA in terms of Regulation 18(3) based
on an application form – Form D.
[83]
All radio frequency spectrum sharing agreements are subject to
approval by
ICASA and to a non-discriminatory approach (Regulation
18(3)).
[84]
High Density Spectrum (HDS) is a scarce commodity. This
is evidenced by the
proceeds of the auction conducted by ICASA in
2021 where the parties to these proceedings paid billions of Rands
for specific allocations
of RFS spectrum. The auction was
preceded by litigation in which the competitive nature of public
participation in acquiring
such spectrum was required as a matter of
legal principle (see the
Telkom cases
referred to below).
[85]
The history preceding the aforesaid auction evidenced ICASA
placing spectrum caps
on the larger players so that an equitable
distribution of radio frequency spectrum can take place. Caps
were placed on Vodacom
and MTN to prevent market domination to the
exclusion of other role players.
[86]
The imposition of such caps is consistent with the obligation upon
ICASA to ensure
that the radio frequency spectrum is utilised to the
benefit of the entire population as a scare commodity under the
control of
the State.
PRIMA
FACIE
RIGHT
[87]
Vodacom contends that section 31(1) requires a new or an amended
license to be issued
to the parties to a sharing agreement.
MTN,accepting the need for a licence, contends that the approvals are
extensions of
the existing licences.
[88]
Section 31 of the ECA reads:
“
Radio frequency spectrum
licence
(i)
Subject to subsections (5) and (6), no person may transmit any
signal by radio or use radio apparatus to receive any signal by radio
except under and in accordance with a radio frequency spectrum
licence granted by the Authority to such person in terms of this
Act.”
[89]
In advancing the interpretation in favour of new or amended licences
Vodacom contends
that:
89.1
The ECA must be read as a whole, and section 31 in particular must
be
read as a whole.
89.2
It cannot be assumed that the legislature intended to do away with
the right to procedural fairness.
89.3
The ECA is meant to be rational, i.e. taking into account all the
other laws which the legislature is presumed to have known when
passing the ECA.
89.4
ICASA is entrusted with management of a public asset – the
radio frequency spectrum – it must do so in the public interest
and in accordance with the values and principles enshrined
in the
Constitution and expressly provided for in the ECA (Vodacom’s
heads, paragraph 57).
[90]
ICASA contends that as long as the applicants for sharing each has a
licence for
its spectrum bands, sharing is competent. It is evident
from section 31(1) of the ECA that no person may transmit any signal
by
radio or use any radio apparatus to receive any signal by radio
without a radio frequence spectrum licence granted by the Authority.
ICASA contends that there is already a licence for each sharing
participant and no new licence is required.
[91]
Vodacom contends that, when MTN transmits on spectrum licensed to
Cell C:
91.1
It is not doing so “
under and in accordance with”
a
license issued by ICASA to MTN; and
91.2
It cannot do so “under and in accordance with a license issued
by ICASA to Cell C”.
[92]
Vodacom therefore contends that ICASA is wrong in suggesting that,
because MTN, Cell
C and Liquid hold spectrum licenses, they are free
to transmit on the frequencies for which they are not themselves
licensed.
[93]
Vodacom contends that spectrum sharing as defined in Regulation 18(1)
refers to an
act of licensing to use the same spectrum. It is
contended that it cannot be effected without licensing on such basis.
[94]
Regulation 18(1) reads:
“
(1) Radio
frequency spectrum sharing is where two or more licensees have been
granted radio frequency spectrum licences
for all or part of the same
frequency assignment.”
[95]
ICASA’s interpretation of the Regulation is that, where radio
frequency spectrum
licenses have been issued, those with adjacent
spectrum may apply to share in terms of Regulation 18(1).
[96]
But the issue is not who is competent to apply. Having licences
for adjacent spectrum
bands is a locus standi issue when applying to
share spectrum.
[97]
Regulation 18(3) refers to applications for licenses. The
approval that MTN, Cell
C and Liquid applied for was for approval in
terms of RFS Regulation 18(3). They accordingly applied “
for
radio frequency spectrum licences for spectrum assignments on a
shared basis”
.
[98]
Vodacom contends that the word “
licences”
in
Regulation 18(3) indicates that the application in respect of sharing
is an application for a license. Where licensees
already had
licenses for the respective individually assigned spectrum, so
Vodacom contends, this means that they needed amended
or new spectrum
licenses for the shared spectrum.
GUARD
BANDS
[99]
MTN admits that it is using the guard band, claiming that “
ICASA
has approved and authorised the transmission of signal on the guard
band frequency between MTN and Liquid and Cell C’s
adjacent
spectrum assignments that are the subject of the pooling
applications.”
(MTN, AA, paragraph 176, CaseLines 02-614).
[100]
Liquid does not address the question of guard bands at all.
Cell C accepts that
the spectrum pooling cannot be achieved without
entailing the assignment of unassigned and unlicensed spectrum in the
form of the
guard band in the 1800 MHz range.
[101]
The respondents play down the significance of the guard bands as a
technological relic,
contending that it stands in the way of pooling
(Cell C, AA, paragraph 18, CaseLines 02-736).
[102]
Vodacom contends that the creation of a new block of pooled spectrum
that has swallowed
up guard bands is not what section 31(1) and
regulation 18(1) and (3) contemplated.
[103]
The papers reflect ICASA’s position to be the following:
103.1
The applications by MTN, Cell C and Liquid for sharing of radio
frequency spectrum do
not expressly refer to the inclusion of the
guard bands;
103.2
ICASA, in granting its approvals in
ICASA 1
,
ICASA 2
and
ICASA 3
makes no reference to an approval that includes
use of the guard bands. The only relevant guard bands in this
instance are
indeed in the 1800 MHz spectrum;
103.3
ICASA has annexed tables reflecting the approved radio frequency
spectrum after the approval
of the applications for sharing by MTN,
Cell C and Liquid. Those tables do not reflect the guard bands
as part of the approved
sharing. The position advanced by ICASA
is therefore that the approval granted merely provides the parties to
sharing agreements
to transmit and receive signal on the previously
licensed radio frequency spectrum, but on a shared basis.There is no
official
approval by ICASA for the utilisation by MTN, Cell C and
Liquid of the guard bands in question.
[104]
When Vodacom stated in its founding affidavit (paragraphs 12
and 13) that MTN, Cell C
and Liquid are using the guard bands, this
was expressly denied by ICASA. However, MTN, Cell C and Liquid
are in agreement
with Vodacom regarding the question whether they are
using the guard bands or not. Cell C contends that ICASA had
utilised
an implied power to consent to the use of the guard bands
as, without the guard bands, the pooling would not be effective.
However, as ICASA has ostensibly not applied its mind to assign the
guard bands to the applicants for sharing, the question of
whether an
implied power was used or not does not arise.
[105]
Vodacom advances the following propositions based on section 31(1) of
the ECA and RFS Regulation
18:
105.1
Whether or not RFS Regulation 18 contemplates “
pooling”
as a form of “
sharing”
, it requires this to be
done by means of licensing the shared spectrum, something that was
not done in the instant case;
105.2
RFS Regulation 18 in any event does not authorise pooling of the kind
at issue in these
proceedings, which includes the guard bands.
105.3
Even on ICASA’s interpretation of RFS Regulation 18(1), the
pooling arrangements
could not have been lawfully approved under that
Regulation.
[106] I agree
with the first proposition.The clear wording of sec 31(1) is
consistent with the interpretation
of Vodacom and MTN. A successful
application to share spectrum must be reflected in a
license. But such licence must
be issued by ICASA and registered in
the public register- sec 4A, ICASA Act.
[107] The
other two propositions are not accepted.The sharing regime in the ECA
is governed by sec 31 and
Regulation 18. As sharing contiguous
assigned and separately licensed spectrum bands cannot be effective
without including the
guard bands, the assignment of such guard bands
must form part of the application and the approval. However, as the
guard bands
are unassigned spectrum, the need for public
participation and the extent thereof must be considered.The process
is akin to an
amendment of a licence in terms of RFS Regulation 9(3).
PUBLIC
PARTICIPATION
[108] Telkom
SA and Vodacom make common cause in contending that the sharing or
pooling arrangements require
public participation as a precursor to
the decision made by ICASA in granting such applications.
[109] Telkom
SA filed a notice to abide but filed an explanatory affidavit in
which it advances the position
that consultation by ICASA was
required. It is contended by Telkom SA that ICASA, as an organ
of state, must adopt a procedurally
fair process, which rationally
required consultation. This is because of the nature of HDS
spectrum arrangements and the
allocation thereof having an impact on
competition between mobile network operators.
[110] If
the sharing of spectrum is required to be done by means of licensing,
that opens the door
for the requirement of public participation.
Licensing of HDS entails requirements, including a competitive
process and a
public participation process. Vodacom invokes RFS
Regulation 7 which reads:
“
The Authority will at all
times publish an ITA where a radio frequency spectrum licence will be
awarded/granted on a competitive
basis and where it determines that
there is insufficient spectrum available to accommodate demand in
terms of section 31(3)(a)
of the Act.”
[111]
ICASA contends that HDS once assigned loses its character as HDS and
thereby the need
for public participation in respect of sharing falls
away. This position by ICASA is based on its contention that
Regulation
18 does not entail a new act of licensing.
[112]
In section 31(3)(a) of the ECA, the spectrum at issue is insufficient
spectrum available
to accommodate demand – i.e. spectrum which
is scarce and that licensees would, if made available, pay billions
for to be
able to use under section 31(1). Vodacom contends
that other licensees would apply for this spectrum and be willing to
pay
large amounts for spectrum at auction were it to be surrendered
by the licensee. Even if the control of the spectrum changes,
it remains scarce when it is then licensed to be used between
licensees under RFS Regulation 18.
[113]
Regulation 9(3) provides for public participation when a license
amendment relates to HDS (a
license that was subject to an extended
application procedure).
[114]
Vodacom contends that, even if it is found that the ECA and the RFS
Regulations do not envisage
public participation, then, independent
thereof, such public participation is imposed upon the process by
section 3 of PAJA.
[115]
Section 192 of the Constitution enjoins ICASA to act in the public
interest.
ICASA, so contends Vodacom, must be open and
transparent whenever it exercises its powers. That is the
constitutional framework
against which the provisions of the ICASA
Act and the ECA must be understood and interpreted.
[116]
Vodacom contends that, where proposed administrative conduct affects
the rights and interests
of role players like Vodacom, they have a
right to be heard. Vodacom had the right “
to
administrative action that is lawful, reasonable and procedurally
fair in terms of section 33(1) of the Constitution.”
Conclusion on public participation
[117]
The approvals by ICASA meet the definition of administrative action.
Administrative
action which materially and adversely affects the
rights or legitimate expectation of any person must be procedurally
fair.
Section 3(2)(b) sets out the process for a procedurally
fair administrative action, requiring adequate notice, a reasonable
opportunity
to make representations, a clear statement of the
administrative action, adequate notice of any right of review of
internal appeal
where applicable, and adequate notice of the right to
request reasons in terms of section 5.
[118]
The impact of section 3(5) of PAJA is that ICASA can only be excused
from
complying with PAJA if the ECA empowers it “
to follow a
procedure which is fair but different form the provisions of
subsection (2).”
[119]
ICASA contends that it did not follow a public participation process
in respect
of the sharing of spectrum applications in question since
the applicable provisions did not provide for public participation.
It further contends that in terms of Regulation 5(5), ICASA retained
a discretion, even where a standard application for RFS licensing
and
assignment is concerned, on whether such application should be
subjected to a public consultation in terms of sections 3 and
4 of
PAJA (ICASA AA, paragraph 100, CaseLines 02-430).
[120] This
indicates that even where a case is not dealing with HDS, ICASA would
have a discretion to impose
public participation processes in terms
of sections 3 and 4 of PAJA. ICASA however does not advance any
evidence that in this instance
it exercised the discretion not to
hold public participation processes.
[121] In
2021/22 ICASA applied a spectrum cap in respect of the
auctioning of HDS in order to
avoid an unfair advantage to the bigger
players.Vodacom and MTN were capped. This took place in
the period preceding
the auction in March 2022. It is contended
by Telkom SA that the spectrum arrangements now make a mockery of
those caps as
spectrum assignments through sharing can exceed the
caps previously imposed.
[122] I
accept this proposition. When ICASA was considering approving
arrangements that would materially
deviate from the outcomes of the
auction process, that on its own triggered a need for consultation
with Vodacom, as it is intimately
affected by the outcome and its
interest in the HDS at issue (see Vodacom Heads, paragraph 117,
CaseLines 19-56). On the facts
that would constitute a legitimate
expectation to be heard.
[123] I
am satisfied that ICASA erred in not following a process of public
participation. While regulation
18 and sec 31 do not expressly
prescribe such a process, there are cogent reasons for it. The
spectrum in question is HDS. ICASA
must act in the public interest in
determining how spectrum is allocated and used. As an organ of state,
ICASA must follow procedures
that are fair to all affected parties.
ICASA did not assess the fairness of the process as against
competitors and the public in
general when it was so obviously
required. The right to fair administrative action protects rights
that are adversely affected
by the exercise of power by ICASA. In
considering and approving the sharing arrangements applied for, sec 3
in general and
sec 3(5) of PAJA require a fair process.
[124]
The sharing arrangements approved by ICASA has the capacity to
adversely affect the rights of
other MNOs who have licences for
spectrum.What makes it clear that there should have been public
participation in this instance
is the procedural rationality
consideration referred to by TelkomSA. ICASA imposed caps on Vodacom
and MTN. But the sharing applied
for has the effect of enlarging the
spectrum available to the sharing participants,particularly MTN.
Vodacom and affected parties
have a right to be heard in the
application process on the impact this will have on competition
between the MNOs. The process
followed was flawed.And the need to
assign the guard bands to make the pooling efficient places the need
for public participation
beyond doubt.
[125] As
the guard bands are not available or of use to parties other than the
licence holders of
contiguous spectrum band, the interest of the
public in assigning such spectrum relates to the impact of the
pooled spectrum
on outside parties like Vodacom. The larger the
spectrum pooled the faster the service provided by means of it. It
provides a competitive
edge for the pooling participants. And
affected parties are required to be notified of their right to make
submissions and to be
heard on this.This was not done.
ASSESSMENT
OF THE IMPACT ON COMPETITION
[126]
There are two considerations in this regard.The first is that ICASA
did not
consider the impact of sharing arrangements applied for on
competition in the ICT sector. It is limited to the question whether
ICASA in fact considered the information on competitiveness submitted
by the applicants for sharing approval. This is the issue
I deal with
first.
[127]
It is accepted by most parties (excluding Liquid that was silent on
the topic),
that ICASA should have conducted a competition
assessment, and the respondents contend that such an assessment was
in fact done.
[128]
The duty to conduct a competition assessment arises from section 2(f)
of the
ECA that enjoins ICASA to achieve the purpose of “
promotion
of competition in the ICT sector”
.
[129] ICASA contends
that “
it was alive to the issue of keeping alive the
competitiveness of each party”
. To this end, the
applicant for sharing of spectrum were requested to provide details
on how the pooling or sharing arrangements
as applied for, in
particular, would promote competition as per the object of the ECA in
terms of section 2(f).
[130]
The need for ICASA to take into account competitiveness was
established
in case law that preceded the auction proceedings in
March 2022 (see
Telkom SA SOC Ltd v Mncube NO and Others; Minister
of Telecommunications v ICASA
[2016] ZAGPPHC 883 (30 September
20216);
Telkom v ICASA
[2021] ZAGPPHC 120 (8 March 2021).
[131]
In ICASA’s submission that served before its Council, the
reference
to the Promotion of the Objects of the ECA reads as
follows:
“
Therefore the Authority is
comfortable that the RFS pooling arrangement between the parties does
not in any way exclude other licensees
from entering into similar
arrangements with the parties. The allowance for potential
spectrum sharing arrangements with
other licensees by the parties
ensures fairness and openness which promotes competition within the
ICT sector.”
[132]
Vodacom contends that this is insufficient to establish an
assessment
of the information provided. This only addresses the
competitiveness assessment of the submissions by MTN CELL C and
Liquid. The
approval of the pooling arrangement indicates an
awareness on the part of ICASA of the consequences of the application
on competitiveness
in the sector. Far from indicating that ICASA did
not consider competitiveness, the quoted paragraph is consistent with
ICASA having
considered it. A failure to set out the content of
submissions made does not mean that everything was not considered by
ICASA.
On this score Vodacom’s contention is not accepted.
[133]
But it brings me to the second consideration at play. Even if their
submissions
were duly considered, this does not deal with the
question whether the public, including Vodacom, should have been
granted an opportunity
to make representations in this regard. As
they had a right to be heard, and were not afforded a hearing or an
opportunity to make
representations, the process was procedurally
unfair.
ESTABLISHING
A RIGHT TO REVIEW RELIEF
[134]
The Constitutional Court has found that, for purposes of a
prima facie
right to interim interdictory relief, it is
sufficient for a party to assert a right adversely affected by the
exercise of
public power which that applicant seeks to review and set
aside (
Eskom Holdings SOC Ltd v Vaal River Development Association
(Pty) Ltd
supra at paragraphs [212] to [214]; [282] to
[283]).
[135]
A similar proposition is stated by the Constitutional Court in
South
African Informal Traders Forum and Others v City of Johannesburg;
South African National Traders Retail Association v City
of
Johannesburg and Others
2014 (4) SA 371
(CC) at paragraph [25].
[136]
In the
Vaal River Development
matter the following was stated
at paragraph [64]:
“
Before a court may grant an
interim interdict, it must be satisfied that the applicant for an
interdict has good prospects of success
in the main review. The
claim for review must be based on strong grounds which are likely to
succeed. This requires
the court adjudicating the interdict
application to peek into the grounds of review raised in the main
review application and assess
their strength. It is only if a
court is convinced that the review is likely to succeed that it may
appropriately grant the
interdict.”
See
EFF v Gordhan
supra at
paragraph [42]:
“
The enquiry is of necessity
provisional because the available evidence is usually incomplete,
untested under cross-examination (where
there are disputes of fact),
and the case may yet be more fully developed.”
(See
Vaal River Development
supra
at paragraphs [64] and
[272]).
[137]
MTN and Cell C contend that the applicant does not require a right to
a review
to be preserved through an interim interdict. It has
that right in any case. The requirement is more stringent in
that
it requires a right to a review which is facing irreparable harm
unless protected by an interim interdict.I disagree.
[138]
The requirement to establish a reasonable apprehension of
irreparable
harm covers this concern raised by the respondents.
To require the assertion of a risk of irreparable harm as part of the
prima facie
right is conflating the requirements for an
interim interdict. The apprehension of irreparable harm is a
separate requirement
that needs to be established in any case.
If it were part of the
prima facie
right, the need for that
requirement in the case law for interim interdicts would fall away.
There is no need to expand the
requirements for an interim interdict
in this way.
[139]
The respondents contend that the applicant has the onus to show that
in Part
B proceedings it will succeed with relief precluding the
pooling. MTN and Cell C contend that, even if Vodacom succeeds
in
setting aside the approvals, the likely outcome of those
proceedings in that event would be that the setting aside would be
suspended
pending a remittal to ICASA. As that would not in
itself prohibit the pooling, it is contended that no
prima facie
right is established for interim relief
[140]
The respondents place too high a burden on the applicant in
establishing its
prima facie
right for interim relief pending
a review. It is sufficient to establish good prospects of
obtaining review relief in Part
B proceedings without having to show
what the Review Court would find other than setting aside the
impugned administrative actions.
INFRINGEMENT OF A RIGHT TO FAIR
COMPETITION
[141]
The second basis on which a
prima facie
right is asserted by
Vodacom is based on a right to fair competition. Vodacom relies
on
Cochrane Steel Products (Pty) ltd v M-Systems Group (Pty) Ltd
and Another
2016 (6) SA 1
(SCA) at paragraph [16] where the
common law right to fair competition is described as follows:
“
As a general rule, every
person is entitled freely to carry on his trade or business in
competition with his rivals. But the
competition must remain
within lawful bounds. If it is carried on wrongfully, in the
sense that it involves a wrongful interference
with another’s
rights as a trader, that constitutes an
injuria
for which the Aquilian action lies if it has directly resulted in
loss.”
[142]
Vodacom contends that particularly MTN has been provided with
benefits that
are unlawful in the sense of unlawful competition.
[143]
There is a fundamental difficulty regarding the assertion of this
right.
Admittedly it is merely advanced by Vodacom as an adjunct to
its primary contention for a prima facie right. But still the
assertion
of this right presupposes that the breach of statutory
provisions by MTN, Cell C and Liquid translates into an actionable
Aquilian
claim in the hands of Vodacom.
[144]
A finding of objective wrongfulness as against Vodacom
requires
more facts and a broader considerations than are available
to this court. If the unlawful spectrum sharing is actionable by a
competitor,
the question arises why Vodacom should have the claim,
when the same claim would lie in the hands of Rain (the seventh
respondent)
and Telkom SA (the sixth respondent). Further, Liquid is
not alleged to be a thorn in the side of Vodacom in the sense that it
is causing irreparable harm to Vodacom. But the interdict is sought
against Liquid as well on the basis of unlawful competition.
In
considering objective unlawfulness Liquid features in two repsects.
If Vodacom were correct, that would give Liquid a similar
claim
against MTN and Cell C on the spectrum pooling to which it is not a
party, while Vodacom would have a claim against Liquid
based on the
same principle on the pooling arrangement to which Liquid is a party.
And this while Liquid is not the focus of Vodacom’s
contention
on unlawful competition.
[145]
I further take into account that the MTN, Cell C and Liquid had
written approvals
for what was being done. Statutory authorisation
will stand as valid until set aside by a court. To permit a claim for
unlawful
competition in such circumstances while the ICASA approvals
are in place is inherently contradictory.This is not objectively
reasonable.
Unlawfulness is not established even on a prima facie
basis.The second right asserted has not been established and
is
unpersuasive for purposes of Part A.
[146]
CONCLUSION ON PRIMA FACIE RIGHT
[147]
The
prima facie
right asserted by Vodacom, namely strong
prospects of success in the review proceedings in Part B is
established. Vodacom contends
that it has established a clear
right, meaning that the balance of convenience does not have to be
established.On my analysis
of the legal position , there is
unlawfulness in respect of the approval process and the use of guard
bands.That would represent
a clear right.
IRREPARABLE
HARM
[148]
MTN contends that Vodacom has not made out a case for irreparable
harm.
It suffers no prejudice through the respondents’
utilisation of RFS on a shared or pooled basis. MTN states that
Vodacom
could not even, regarding the use of guard bands, point to
prejudice to Vodacom which is irreparable. The same sentiments
are echoed by Cell C and Liquid. They stress that Vodacom has
increased its market share since the auctions and only Cell
C has had
a slight drop in market share.
[149]
MTN and Cell C and Liquid make the point that Vodacom has not alleged
and
established the risk of irreparable harm.
[150]
Vodacom contends that it does not have to show actual harm, but “
only
potential impending or continuing harm”
. (See
Masstores (Pty) Limited v Pick n Pay Retailers (Pty) Ltd
2017
(1) SA 613
(CC) at paragraph [30]).
[151]
Vodacom has to establish a basis for why it contends that the
potential or
impending or continuing harm that if faces is
irreparable. In
City of Tshwane Metropolitan Municipality v
AfriForum and Another
2016 (6) SA 279
(CC) at paragraphs [55] and
[56] the Constitutional Court described the harm that ought to be
established as follows:
“
[55] Before an interim
interdict may be granted, one of the most crucial requirements to
meet is that the applicant must have a
reasonable apprehension of
irreparable and imminent harm eventuating should the order not be
granted. The harm must be anticipated
or ongoing. It must
not have taken place already. …
[56] Within the context of a
restraining order, harm connotes a common-sensical, discernible or
intelligible disadvantage
or peril that is capable of legal
protection. It is the tangible or intangible effect of
deprivation or adverse action taken
against someone. And that
disadvantage is capable of being objectively and universally
appreciated as a loss worthy of some
legal protection, however much
others might doubt its existence, relevance or significance.
Ordinarily, the harm sought to
be prevented through interim relief
must be connected to the grounds in the main application.”
[152]
Vodacom contends that the growth of particularly MTN is at its
expense and
the risk of further harm continues. MTN contends
that it was within Vodacom’s powers to make a similar
application
for sharing. It contends that the application is
borne of regret at being “
left behind”
by MTN in
this regard.
[153]
Vodacom contends that, if it does not obtain interim relief, the
passing of
time might in itself be the reason why it does not succeed
in the review proceedings, even if establishing a case for review
(see
Millennium Waste Management (Pty) Ltd v Chairperson of the
Tender Board: Limpopo Province and Others
2008 (2) SA 381
(SCA)
at paragraph [31]).
[154]
Vodacom further contends that harm is reasonably apprehended as
spectrum is
the tool used by mobile network operators to compete.
Vodacom contends that it cannot quantify its losses arising from the
advantage that MTN has obtained based on the pooled spectrum that it
utilises to transmit and receive signal.
[155]
I am not persuaded that the competitive advantage gained by MTN is at
the
expense of Vodacom. More evidence of such causation would
be required. That does not mean that Vodacom does not face a
reasonable
apprehension of irreparable harm. I am satisfied
that the position arising from the approval of shared spectrum may
result
in the risk to Vodacom that its review remedy is jeopardised,
unless interim relief would be granted. In that sense, its
apprehension of risk relates to irreparable harm.
[156]
The counter to this contention by MTN and Cell C is that the
approvals for
the sharing of spectrum obtained from ICASA stand as
valid until set aside on the
Oudekraal
principle. They
argue that their conduct in transmitting and receiving signal on the
shared spectrum must be deemed to be
valid. There is therefore
no bad faith and there is no unlawful conduct on the part of the
respondents.
[157]
The effect of the interim relief sought would be a
de facto
suspension of the operation of the approvals. In that sense the
Oudekraal
principle does not assist the respondents.
However, the fact that direct relief against ICASA is not sought,
i.e. a
de jure
suspension of the approvals, is relevant to the
Court’s overriding discretion.
BALANCE
OF CONVENIENCE
[158]
It is trite that where an applicant for interim interdictory relief
asserts
and establishes a clear right, the need to consider the
balance of convenience attenuates. I have found that Vodacom
has
established a clear right. However, this finding is based on my
interpretation of the ECA and its relevant regulations.
[159]
If I am wrong in finding that a clear right has been established,
then it
is self-evident that I am satisfied that a prima facie
right has been established. If I err in not dealing here with
the balance of convenience, I deal with such considerations in the
context of the court’s overriding discretion.
NO
ADEQUATE ALTERNATIVE REMEDY
[160]
I have already found that the suggested internal remedies of section
17C of
the ICASA Act and seeking interim relief before the
Competition Tribunal are not adequate or appropriate in this matter.
[161]
ICASA has mooted a third alternative remedy, namely an expedited
review. However,
Vodacom’s suggestion to this effect before the
meeting with the DJP was refused. If the respondents were averse to
an expedited
review, then they cannot now seek to benefit from the
opposite stance.
[162]
While an expedited review would take the court to the legality of the
approvals,
that would not mean that the relief sought in Part A would
be before the review court. It would not. The applicant seeks the
setting
aside of the approvals. Whether interdictory relief were to
be granted after a successful review does not flow from the relief in
Part B as currently formulated. The review court would be exercising
its just and equitable relief powers flowing from Sec 8 of
PAJA. But
such interdictory relief would not be on the same footing as the Part
A relief sought.
[163]
I am satisfied that there is no adequate alternative legal remedy
available
to the applicant.
THE
COURT’S OVERRIDING DISCRETION
[164]
Granting interdictory relief is discretionary. It is trite that it is
within
a Court’s discretion to grant or refuse interdictory
relief, where the right to such relief has otherwise been established
– See e.g.
JFE Sapela Electronics
supra at paragraph [
28]. In that matter considerations of pragmatism and
practicality informed the issue. See also
Steam Development
Technologies 96 Degrees (Pty) Ltd v Minister, Department of Public
Works and Infrastructure 2024 ZAECGHC 20 (16
February 2024) where at
para 8 the Court
held that: -
“
Even if all these
requirements are met, the Court still enjoys an overriding
discretion whether or not to grant the interim
interdict.”
[165]
Having come so far, the applicant still needs to persuade the court
to exercise
its overriding discretion in favour of granting the
interim interdict sought. It is at this juncture that the
application
falters. There are a number of considerations
relevant to the exercise of the Court’s overall discretion
militating
against granting the relief.
[166]
The overriding consequence of pooling of spectrum is the improvement
of fast
and reliable electronic communications. It has improved
access for millions of members of the public to information for trade
purposes , education etc.To deprive the public of such benefit is no
small matter. They would be prejudiced. It is the grass that
gets
trampled when elephants fight.
[167]
The improvement in services has come at great cost, incurred under an
approval
that has not been set aside. Due to the delay,
particularly MTN has made large capital investments in
infrastructure
based on the approvals obtained from ICASA.
During argument reference was made to the installation of
infrastructure
at more than a thousand locations in the country.
[168]
Cell C has restructured its business model, based on the approved
sharing
of spectrum and contends that it faces devastating
consequences if the interdict were to be granted. It goes so
far as stating
that its viability is threatened.
[169]
Cell C caters for customers who fall in the poorer segment of
society.
Cell phones are their primary and often only means of
communication. An interdict threatens to cut off this lifeline,
placing livelihoods,
education and access to information at risk.
[170]
I take account of the counter-argument that such consequences are the
result
of the unlawfulness of the shared use regime. And it flows
from the rule of law as pillar of our constitutional democracy.
[171]
That is not the end of the debate. I have a duty to consider justice
and equity
in terms of sec 8 of PAJA.
[172]
ICASA as regulator is satisfied that the spectrum sharing is
lawful.
The MNOs are therefore not undermining the regulator.
Although ICASA has been remiss in many respects, it is
responsible
for monitoring the ICT sector. It failed to call for
public participation, in the limited sense I have referred to, and
having
approved the sharing, failed to issue and register licences
based on its approval of spectrum sharing.
[173]
The respondent MNOs acted
bona fide
in applying in
terms of current regulations for the approval of the sharing of radio
frequency spectrum and such applications
were successful. From
the vantage point of the respondent MNOs they had done what they
could, relying on published regulations,
to obtain official approval
for what they are doing at present. And ICASA as regulator
contends that official approval is
in place. I disagree, but at least
the regulator has been satisfied.
[174]
I further taken into account that it was within Vodacom’s
powers to apply for a sharing agreement with another MNO on a similar
basis as those applied for as the applications made by
the
respondent MNOs. The fact that Vodacom did not do so may
underpin why it now seeks redress through interim relief.
However, it was not deprived of the chance of similarly
applying for sharing in the hope of obtaining the same type of
benefit
that it now begrudges MTN as having obtained.
And despite the benefit to MTN, Vodacom’s market share has
also
improved.
[175]
The relief Vodacom seeks is overbroad. The application
not merely
seeks an interdict as far as transmitting of signal is
concerned but also of “
using”
of the pooled
spectrum. The respondents have contended that the relief would
interfere with roaming arrangements and
agreements to the
detriment of the public.
[176]
Vodacom contends that this is a fallacious argument as the use of
roaming
does not entail transmission of signal. It is a
transmission of signal which is the focus of the interim interdict
sought.
However, the interdict is not limited to transmission.
The reference in the relief to the interdicting
of “
using”
of the pooled spectrum does
to my mind interfere with roaming agreements. The relief sought
is consequently overbroad. An
invitation was extended to
the Court to delete the word “
using”
, but it
is not for the Court to formulate the relief which the applicant
seeks.
[177]
A further consideration militates against the granting of the
relief,
namely the OUTA principle. The OUTA principle was
argued by all the parties. Vodacom contends
that ICASA is
functus officio
, that no relief
in Part A is sought against ICASA, and that the issue of
separation of powers harm does not arise.
On the face of
it, there is substance to this contention. However, the
restraint sought seeks to undo the approvals
granted by ICASA for
the transmitting and receipt of signal on the pooled radio frequency
spectrum listed in the notice
of motion. Had the applicant
sought an interim interdict against ICASA suspending its
approvals to share, pending to
setting aside the Part B
proceedings, the restraint provisions flowing from the suspension
would have read the same.There is therefore
an effective
suspension of the approvals implicit in the relief sought in Part A.
That constitutes separation of powers harm
as ICASA would be
hamstrung by the interdict sought in effective monitoring and
regulating of the approved sharing of spectrum.
[178]
I am concerned about the potential for interference of an interim
interdict
with the exercise by OUTA of its supervisory role of
approved shared spectrum in the public interest.
[179]
Licensees in respect of radio frequency spectrum are liable for
fees
based per MHz of spectrum licensed to them. If the
respondents are restrained from utilising the pooled radio frequency
spectrum,
this has the potential of interfering with the power
of ICASA to recover fees for the approved spectrum blocks.
If use
of shared spectrum is interdicted, non-payment of fees that
are due to ICASA is on the cards. There is therefore a risk of
separation of powers harm.
[180]
The applicant contends that, as an alternative, the current
proceedings
constitute the “
clearest of cases”
as required by OUTA before a Court would grant an order which
interferes with the exercise of executive power. It is not the
clearest of cases, in my view. No direct relief is sought against
ICASA and the effect on ICASA of an interdict against the respondent
MNOs is a matter of inference. My finding of unlawfulness and a clear
right flow from my interpretation of the legislation. The
“clearest
of cases” requirement in OUTA point to an inevitable and
obvious resolution of a dispute based on the facts.
This is not such
a case.
[181]
The cumulative effect of the aforesaid considerations is that,
despite the
applicant establishing the elements required for an
interim interdict, the Court, in the exercise of its overall
discretion, declines
to grant the interim relief.
[182]
In the premises I make the following order:
1. The
application for interim interdictory relief in terms of Part A of the
Notice of Motion is dismissed
with costs, such costs to include the
costs of two counsel, on Scale C.
LABUSCHAGNE
J
JUDGE
OF THE HIGH COURT
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