Parliament of the Republic of South Africa

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Parliament of the Republic of South
Africa Public Hearings on Interception
Monitoring Bill 2001 Submissions By Cell C
(Pty) Limited August 30, 2001
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Cell C representatives

• Zwelakhe Mankazana Director
• Zeona Motshabi Head of Corporate
  Communications
• Norman Ober Advisor to the CEO
• Dr. Jonathan Fiske Regulatory Planning
  Manager
• Rob Otty Partner, Deneys Reitz

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Contents

• Cell C (Pty) Limited
• Rights and Obligations
• Accountability
• Technical / Compliance Considerations
• Commercial Considerations
• Effect of Legislation on Cell C
• Recommendations and Concluding Remarks

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Background

• Cell C is a newly licensed cellular mobile
  operator and is under-going the process of
  preparing for its commercial launch into a market
  with 2 well-established cellular mobile
  operators.
• Cell C will initially offer its services through
  a combination of its own rolled-out network and
  through a roaming agreement with Vodacom.
• Cell C is is 40 owned by CellSAf a consortium
  of Black Empowerment Groups and 60 by Oger
  Telecom, which carries the risk for 100 of Cell
  Cs startup finances. CellSAf remains liable for
  40 of the investment required in Cell C.

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Fundamental Principles

• Cell C
• supports the intention of the Interception
  Monitoring Bill (the Bill) for the purposes of
  protecting South Africas society against crimes
  of a serious nature, in ensuring the protection
  of national security and in supporting
  emergencies.
• believes that the intention of this Bill is a
  serious effort to pro-actively counter criminal
  elements that severely handicap South Africas
  social and economic fabric, obstructing the
  countrys development potential.
• acknowledges that monitoring and interception is
  a sensitive subject which, if misused, can
  disrupt peoples and companies rights to
  privacy.
• acknowledges that it, as well as other
  communications service providers, will have to
  implement a newer form of interception
  monitoring

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Fundamental Principles

• Cell C has given the Bill consideration from both
  the perspective of how Cell C as a private
  cellular mobile operator and service provider is
  affected and from the perspective of its
  customers
• Cell C concluded that the Bill in its current
  form is deficient in that it
• Appears to lack clear accountability processes
• imposes a high burden on private, commercial
  operators service providers
• assumes guilt and non-cooperation and
  over-penalises for incomplete compliance of
  monitoring orders
• risks hindering South Africas economic and
  social development through constraints on
  technological deployment

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Rights and Obligations

• Public Interest
• Cell C recognises that there are situations
  where the public interest demands that
  interception and monitoring of private
  communications be permitted to prevent or
  prosecute serious crimes or to protect the
  security of the country
• Licence Obligations
• The Telecommunications Act 1996 and the mobile
  service licence granted to Cell C (as with all
  such licences), place an obligation on Cell C to
  preserve the privacy of communications on its
  network, which obligation has to be balanced
  against the purposes sought to be achieved the
  Bill.
• Bill of Rights
• The Bill of Rights confers on citizens the
  following
• right to privacy,
• right of access to the Courts and
• rights of accused persons under the Constitution

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Rights Obligations

Telecommunications Act and Cell C Licence
customer
The Bill places a high burden of responsibility,
costs, technical-requirements on existing
responsibilities of the licensee ( a private
legal person). This burden of responsibility
on the private person must be limited as much
as possible The right to call for costs should
carry with it the obligation of prudent financial
consideration
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Accountability

• Although the information gathered by monitoring
  communications and individual movements may be
  used to prevent or investigate crimes, every
  opportunity must be used to prevent
• Corruption
• Misuse of information
• Abuse of position / power (or perceived power)
• Fishing expeditions
• Unaccountable or unauthorised individuals issuing
  or executing Directions or Warrants
• Unnecessary retention of information
• By operator / service provider
• By government enforcement agencies

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Accountability

• Difficulties in compliance
• Providing new services in a startup environment
• Roaming
• Technical constraints
• Time (e.g. the request for call-data extending
  over a period of time, may not be instantaneously
  available)
• Appropriate legal measures and penalties for
  non-compliance
• Section 205 of the Criminal Act
• Licence revocation (after a 2nd offence,
  revocation may be ordered by the Minister of
  Communications)
• Fines

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Accountability

• Cell C considers the following to be important
• Closed list of government officials entitled to
  call for call information
• Seniority and integrity
• Identifiable to telecommunications companies
• Guidelines are drawn up in consultation with the
  communications sector about achievable and
  realistic objectives (e.g. time periods for
  call-record collections)
• Limit the applicability of Section 205 of the
  Criminal Act to operators (or amended to refer to
  utmost extreme case of blatant lack of
  co-operation)

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Technical / Compliance Considerations

• Cell C intends full compliance with this
  requirement, but
• Interception is not part of our core business
  need a fail safe system with straight-forward
  administration
• Concern with privacy safeguard if system uses
  anything short of a fully contained
  administration process
• Public privacy concerns
• Operator / service provider liability concerns
• Initial review of some potential intercept
  solutions may not sufficiently contain access at
  operator level
• Could include solutions utilising HLR as
  subscriber intercept marking point
• Initial review of vendor specific interception
  solution appears to offer better containment of
  access
• Requires vendor proprietary software in each MSC
• Supports interception of broader base of services

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Technical / Compliance Considerations

• All solutions will require equipment additions
• Line termination groups
• Fixed links (inter-MSC and to monitoring
  center)
• Intercept control unit
• All solutions require trained, reliable core of
  operations specialists
• All solutions need to ensure that advances in
  technology and new, competitive service offerings
  to SA subscribers are not delayed by need to
  update interception capability
• Subscriber Database Considerations
• Expect that organised crime will subvert user
  identification requirement
• Notification to operator of changes to pre-paid
  subscriber user data may not occur
• Cell C domestic roaming agreement may require
  tracking subscribers on 2nd networks

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Commercial Considerations

• Costs for interception and monitoring can be
  significant
• equipment installation
• system implementation
• system management
• staffing faciltiities
• US and UK governments have offered wireless
  industry and service providers significant
  financial assistance to support the
  implementation of interception technologies
• - FBI offered USD 500 million
• South Africa, using mature GSM technology, will
  be able to benefit from solutions developed for
  other operators, but still the costs remain
  significant
• Cell C can only sustain cost-based reimbursement
  of associated CAPEX / OPEX
• Certain costs are clearly not operator specific
• - the provision of inter-facility 2MB links
  should be arranged directly with TELKOM and/or
  the Second Network Operator by the government
• - the interception control centre and monitoring
  centre are not GSM network equipment and should
  be supplied by the government.

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Recommendations and Concluding Remarks
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Cellular Mobile Development Mass Market Uses
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Effect of new legislation on Cell C

• Cell C is controlled by a consortium of 40
  Black Empowerment group and 60 by Oger Telecom.
  Jointly the parties will invest 650m over the
  next 5 to 6 years.
• Cell C has budgeted to
• Contribute a of revenue to the Universal
  Service Fund
• Pay a of NOI to the regulator
• Pay taxes
• Pay service and spectrum licence fees
• Build 52 000 Community Service Telephones
• Commit a minimum total investment of 1Billion
  Rand towards a National Economic Development Plan
  directed towards empowerment
• Cell C relies on current and future operations
  (e.g 2.5 G) to fund these commitments
• Cell C has not budgeted for monitoring and
  interception infrastructure .

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Recommendations

• Government or appropriate Ministry covers costs
  for infrastructure and facilities set-up
• Government or appropriate Ministry pays for
  services at commercial tariffs
• Warrants authorized by an identifiable, high
  ranking official, judge in service
• 4. Penalties for non-compliance should be fines
• 5. Section 205 of the Criminal Act should not be
  applicable to the Interception Monitoring Bill
• Demonstration of inability to meet a request for
  information, monitoring or interception should be
  permitted before an impartial body judge
• New telecommunication applications should not be
  subject to progress in the monitoring of such
  applications. Rather government should co-operate
  with the industry in finding solutions that meet
  international best practice.

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Thank You