SOUTH AFRICA’S RATIFICATION OF ARTICLE XII PARAGRAPH (C) (II) OF THE ITSO AGREEMENT 20 NOVEMBER 2015 Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 1

To obtain approval for the submission of the Amendment to the ITSO Agreement to Parliament for ratification in terms of section 231(2) of the Constitution. 2 Purpose

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development International Telecommunications Satellite Organisation Resolution 1721 (XVI) of the General Assembly of the United Nations 1973 The International Telecommunications Satellite Organization (INTELSAT), was established to implement a UN resolution on communications satellites and use of “Outer Space”. Resolution 1721 (XVI) of the General Assembly of the United Nations MISSION MISSION to ensure availability of affordable satellite telecommunications services to all countries of the world on a non-discriminatory basis Intelsat restructured in order to secure long term sustainability. The decision to restructure was driven by: the need to provide an avenue for infusion of private capital to meet the high industry costs; industry trends and competition pressures. The current membership is 149 countries.

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development International Telecommunications Satellite Organisation Outcomes of Restructuring Public Service Obligations  Transfer of all INTELSAT assets to a private entity, Intelsat Ltd., initially headquartered in Bermuda but currently based in Luxembourg, with the mandate to meet Public Service Obligations ITSO  Change of the mandate of the Intergovernmental organization to International Telecommunications Satellite Organization ( ITSO ) based in Washington, D.C.  Monitoring of Intelsat’s performance by an Assembly of Parties, an Executive Organ and a Panel of Legal Experts To provide on a commercial basis, international public telecommunication services, in order to: maintain global connectivity & coverage serve its lifeline connectivity customers provide non-discriminatory access to the Intelsat system To provide on a commercial basis, international public telecommunication services, in order to: maintain global connectivity & coverage serve its lifeline connectivity customers provide non-discriminatory access to the Intelsat system

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 5 ITSO’s Mission Core Principles Ensure through Public Services Agreement (PSA) signed with Intelsat that Intelsat provides on a commercial basis, affordable international public telecommunication services to ensure performance of the Core Principles Parties’ Common Heritage Protect the Parties’ Common Heritage Those frequency assignments associated with orbital locations registered on behalf of the Parties with the ITU The UK & the US were designated as Notifying Administrations of the Parties’ Common Heritage, at the time of restructuring 21 Orbital locations. Estimated value = US$1-1.5 B

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development provision of essential satellite capacity  Intelsat has to fulfill the Core of Principles in Article III of ITSO Agreement, particularly the provision of essential satellite capacity on a timely basis. Parties’ Common Heritage orbital locations  The purpose of the Amendment is to clarify the status of the Parties’ Common Heritage orbital locations and to fulfill the Core Principles (Article III of the ITSO Agreement).  The Amendment was approved by more than a two-third majority vote of the Parties present in the Thirty-First Meeting of the Assembly of Parties (AP-31) in  The Amendment is compatible with all ITU instruments and complements and strengthens the February 2008 FCC Decision that modifies Intelsat’s licenses with respect to the use of the orbital locations. 6 Amendment to Article XII (C) (Ii) of the ITSO Agreement

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development  Due to the level of indebtedness of Intelsat, AP-31 considered the possibility of Intelsat’s inability. Without the Amendment, if Intelsat waives the Parties’ Common Heritage frequency assignment(s), uses such assignment(s) in ways other than those set forth in the ITSO Agreement, or declares bankruptcy; the Parties’ Common Heritage orbital locations could be transferred to third parties with no public service obligations.  The Parties’ Common Heritage are those orbital locations, which service to “lifeline” countries. 7 Amendment to Article XII (C) (Ii) of the ITSO Agreement..2 The Parties’ Common Heritage resources are quite unique in their capability to ensure global coverage and to directly, instantly and reliably connect countries around the world.

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 8 Amendment to Article XII (C) (Ii) of the ITSO Agreement..2 1.provide public telecommunications and broadcasting services, including voice, data and video 2.enable distribution of educational content, telemedicine and other important services Africa relies on satellite communications, therefore the common heritage is critical especially for least developed countries and this should be preserved.

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development  In the present form of Article XII (c)(ii), if Intelsat waives the Parties’ Common Heritage frequency assignment(s), uses such assignment(s) in ways other than those set forth in the ITSO Agreement, or declares bankruptcy the Parties’ Common Heritage will be lost for the purposes of fulfillment of the Core Principles.  Under certain circumstances, the satellites and the corresponding orbital locations could be transferred to third parties with no public services obligations. This could result in the irreversible loss of the Parties’ Common Heritage, which could negatively affect the provision of international public telecommunications 9 Article xii (c) (ii) Before the Amendment “in the event that such use is no longer authorized, or the Company no longer requires such frequency assignment(s), cancel such frequency assignment under the procedures of the ITU”

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 10 Article Xii (C) (Ii) After the Amendment  The Amendment is compatible with ITU instruments and complements and strengthens the decision that modifies Intelsat’s licenses with respect to the use of the Parties’ Common Heritage orbital locations.  The amendment allows the Parties’ Common Heritage to continue to be utilized in support of the Core Principles, if Intelsat waives such frequency assignment(s), uses such assignment(s) in ways other than those set forth in the ITSO Agreement, or declares bankruptcy.

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development  The Notifying Administrations shall authorize the use of this frequency assignment(s) only by those entities that have entered into a Public Services Agreement with ITSO in the case Intelsat, its successor entity in case of bankruptcy or any future entity:  This Amendment enables ITSO to ensure that the selected entities, who use the Parties’ Common Heritage frequency assignment(s), fulfill the Core Principles.  The Notifying Administrations will still have the responsibility to cancel any unused frequency assignment(s) in case no entity wants to use them. 11 Article Xii (C) (Ii) After the Amendment Waives such frequency assignment(s) Uses such assignment(s) in ways other than those set forth in the Agreement Declares bankruptcy

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development Problem with Satellite Communications  Within the ITU context access to satellite orbits and frequencies occurs in two ways: First-come first-served (disproportional allocation) via an international coordination process o This approach disadvantages developing countries due to first mover advantage by developed countries and filing of paper satellites.  Access via international coordinated plans that seek to guarantee equitable access to developing countries.  SADC has a proposal to WRC-15 for the development of a fixed-satellite service and broadcasting-satellite service plan to ensure high capacity satellite services for developing countries and for future infrastructure and satellite capabilities. 12

Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development  It is very important that the amendment enters into force as soon as possible to ensure that the Parties’ Common Heritage continues to be utilized in support of the Core Principles only by entities that have signed a Public Services Agreement with ITSO.  Approval/Acceptance from at least two-thirds of the Parties to the ITSO Agreement (99 Parties) 92 ITSO Parties have completed the acceptance process 45 African countries are Parties to ITSO Agreement 10 African countries including SA have not yet ratified  Ratification of the amendment will contribute to bridging the digital divide and creating a better life for all, especially for those countries that rely on satellite services for their telecommunication and broadcasting services.  This Agreement reinforces South Africa’s role in supporting infrastructure development in Africa and the role of ICTs in bringing socio-economic development. 13 Why Ratify?

Thank You Request approval of the ratification of the Amendment to the ITSO Agreement, as it is a very important and strategic action that needs to be completed by countries in order to legally ensure availability of satellite orbital resources for global coverage. That the National Assembly and the National Council of Provinces approve the ratification of the Amendment to the ITSO Agreement Article XII paragraph (c) (ii), as agreed at the 31 st Assembly of Parties in Paris 2007 Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 14 Recommendation & Way forward