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CRAN wins regulatory levy fight

2024-03-19  Maria Sheya

CRAN wins regulatory levy fight

The Communications Regulatory Authority of Namibia will start collecting levies from service providers, backdated to August 2022, following the recent Supreme Court ruling in its favour. 

“No regulatory levies have been collected since 22 August 2022. Considering the Supreme Court’s findings, the authority will resume collecting levies backdating to that period and moving forward. The authority will also finally launch the Universal Service Fund, which was equally hampered by the legal challenge,” said Cran’s CEO Emilia Nghikembua in a media statement on Friday.

The Supreme Court dealt with the constitutionality challenge of Section 23 of the 2009 Communications Act, which gives Cran the power to impose a regulatory levy on providers of communications services in Namibia. The challenge dates back to 2020 when Mobile Telecommunications Limited (MTC) filed an application, arguing that the section was unconstitutional as the amended section had no limit to the upper threshold of the regulatory levy, that it lacked executive oversight, and failed to prescribe parameters, leading to Cran’s unchecked, uncircumscribed discretion without limitation.

On 22 August 2022, the High Court held that Section 23 of the Communications Act 8 of 2009, as amended, and any regulations prescribed to that provision, are declared unconstitutional and null and void. Cran, however, appealed that judgement, and on 13 March 2024, the Supreme Court delivered a judgement in Cran’s favour. 

The Supreme Court concluded that the High Court in its consideration of the constitutionality vires of the amended Section 23 did not attach sufficient weight to the fact that the legislature added considerable detail to the section, which did not form part of the previous Section 23.

The legislature has succeeded in circumscribing and limiting Cran’s discretionary power to set regulatory levies. The legislative schemes under Section 23, as amended, strikes a balance between two competing interests, being the recognition of Cran as the main dependent of the levy income for its activities, and on the other hand that sourcing funds for Cran should not be at the expense of the operators. Cran had previously stated it lost at least N$158 million between 2018 and 2020 in regulatory levies it could not collect.

The court also found that the regulatory scheme adopted under the amended Section 23 allows for flexibility in the joints of Cran accompanied by sufficient safeguards against either over-recovery or under-recovery, and sets out justifiable criteria on which operators may challenge any unreasonable exercise of discretionary power.

Thus, the relevant provisions of the Communications Act passes the constitutionality muster, independent of the provisions of the Public Enterprises Governance Act. “This is a landmark decision because Cran can now focus on the rudimentary aspects of its mandate: to ensure that all Namibians have access to affordable and good quality services. This mandate was hugely undermined by the lack of sufficient resources to defray the cost of regulation due to the uncertainty around the regulatory levies, being our biggest source of revenue,” stated Nghikembua.

2024-03-19  Maria Sheya

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