Electronic Communications Security (Pty) Ltd Bill Dated 14 October 2002



BILL, 2002


Telkom SA Limited ("Telkom") welcomes the Opportunity to comment on the Electronic Communications Security Bill, 2002 ("the Bill").

Telkom would like to take part in the oral hearings that the committee may hold, and would require a timeslot of 30 minutes for presentation.


Telkom views the protection and security of government electronic communications as a laudable strategy, Telkom, however, has a number of concerns regarding the approach of the bill to this important matter


Elements of the functions of Comsec (Pty) as recorded in the Bill are clearly reserved for PSTS licensees. The Bill, therefore, empowers the Minister to prescribe functions, for Comsec (Pty), which are clearly enshrined in the Telecommunications Act.

5 The fact that Comsec (Pty) must provide, install and maintain secure communications systems products and services as well as training, support, cryptographic, verification and consultancy services to government in all of its capacities constitutes a sizeable encroachment on the domain of Public Switched Telecommunications Service licensees. Under these circumstances it is essential that the drafter of the bill explain and elaborate on the motive behind this drastic step.

6 The Bill establishes Comsec (Pty) Ltd de facto as a fully-fledged telecommunications operator1 and industry stakeholder; albeit on an exclusive, discriminatory and uncompetitive basis2 in terms of a dispensation that is totally at variance with the Telecommunications Act.

Application of the Bill

Telkom seeks clarity regarding the extent of the application of the Bill to the private sector and private entities.

8 Clarity is also required as to whether the Minister's identification of critical communications infrastructure relate to the infrastructure of departments and organs of state only.

1 Notwithstanding Comsec (Pty) Ltd's intended national security function its structure is deafly business-centred and its apparent function indisputably profit driven. Indeed, it is obligated to render certain telecommunications services to government and to organs of state at contractually determined rates, assess their future needs, enter into business agreements to regulate its relationship with departments and organs of state and acquire shares from any South African Company

2 Sub-sections 18(2)(b) & (3).


9 Unless Telkom is successful in seeking the necessary exemptions from the Minister of Intelligence Services it may be mandatory for Telkom not only to procure and access electronic communications products with the verification and approval of Comsec (Pty) Ltd, but also to obtain secure communications systems, products and services from Comsec (Pty) Ltd.3 Hence, in the case of Telkom, the application of the Bill to organs of state is bound to bring about unintended consequences, considering that Telkom is about to be privatised.

10 It is submitted that the basis on which Telkom must apply for exemption and what criteria Telkom must meet in order to qualify for exemption from the application of the Bill must be clearly spelt out.

11 Unless exempted, it will be mandatory for Telkom to comply with regulations regarding security requirements for electronic communications that are strictly intended for government. Surely this is not the intention since Telkom was commercialised back in 1991 and is about to be listed.

Non-Application of the Telecommunications Act

The provision that exempts Comsec (Pty) Ltd from application of the licensing requirements of the Telecommunications Act means that it will indeed provide telecommunication services to departments and organs of state without complying with the statutory requirements of the telecommunications regulatory regime as set out by the policy maker.

Exemption from provisions of the Company's Act

Telkom submits that it is irregular to provide for the exemption of Comsec (Pty) Ltd from the provisions of the Companies Act, whilst at the same time permitting it to acquire shareholding in any South African company.

Possible Interference with Networks

Section 7(6) will exempt Comsec (Pty) Ltd from having their customer premises equipment checked for compatibility with the public networks. It is submitted that this exemption has the potential to degrade the national networks and disrupt communications.

Equity Holding in Other Companies

It is unacceptable and in Telkom's view inconsistent with the Bill's security objective to permit an entity -established for the express purpose of ensuring that critical government electronic communications are protected and secure-to acquire shares in any other company registered in the Republic.

Tariffs for Services Rendered

Telkom finds no justification for the creation, for COMSEC, of a tariff dispensation, which is at variance with the Telecommunications Act with specific reference to telecommunications facilities and services.

17 It is in Telkom's view irregular for an entity such as Comsec (Pty) Ltd to be permitted to charge departments and organs of state for services rendered whilst at the same time being government subsidised.

3 Section 7(b) read with subsections 17(1),(2) & 3. Telkom is an organ of state in terms of a series of decisions since Directory Advertising Cost Cutters.

Limitation of Liability

18 Telkom's view is that COMSEC should not be exempted from liability4 for anything done in good faith due to the fact that the company is a private juristic person, provider of secure communications systems products and services and a holder of equity interest in other private entities. It is also in the national interest of the country and in accordance with the principles enshrined in the Constitution of the Republic of South Africa for such an entity to be accountable in all its activities.

4 It is not clear whether the Bill excludes both civil and criminal liability.