For business, this new legislation is important in several ways: Press freedom has, undoubtedly, improved over the past years, and for all its flaws, the media are crucial in holding government -and business -to account. Both the media industry and the ICT sector are important players in diversifying Kenya’s economy away from a reliance on agriculture and tourism, and strengthening the services sector. According to estimates by the Media Owners Association (MOA), the media and ICT industry has an annual turnover of KES100bn, and it is a rapidly growing sub-sector.
Underlying much of the heated debate about Kenya’s so-called Media Bill or ICT Bill was confusion as to what this bill actually is – for starters, there is no such thing as a Media Bill. The document in question is the new Kenya Communications (Amendment) Act, an Act of Parliament to amend the Kenya Communications Act, 1998, to make minor amendments to other statute law, and for connected purposes: “The Kenya Communications (Amendment) Act 2009 legislation is part of the Kenya Communications Act (1998) which is still in force. The Act describes and mandates the ICT sector regulatory authority which is the Communications Commission of Kenya (CCK),” explains Marcel Werner, a Director of Innovation Africa, an IT firm, and also the chairman of the Kenya ICT Federation (KIF).
What made an objective assessment of the new legislation more difficult is that it is an omnibus bill: The new law effectively stretches across the media industry into the domain of information technology. As such, it also is a bit of a mixed bag: The media rightly saw the proposed law as having draconian clauses, whereas in many other instances, it actually brings Kenya into the information technology age.
Constitutional Concerns and International Competitiveness
Unsurprisingly, the media industry came out strongly against the new law. Their greatest objection was to section 88 of the Act, a section that is a carry over from the colonial era and has been used by subsequent Kenyan regimes to further their ends and pressure media houses. Section 88 gives the Minister for Internal Security sweeping powers to confiscate equipment and raid media enterprises “in the interest of public safety and tranquility.” All the minister needs to do is issue a certificate to show that there is indeed a state of emergency.
The media has for years called for the repeal of the law from the statute books, or at the least an amendment to remove ‘arbitrary’ powers from the Minister of Internal Security. This is not merely a potential issue: In the wake of the violence that rocked Kenya after the disputed elections in late 2007, the minister actually did exercise these powers and banned live transmission by all media houses operating in Kenya.
“This section negates, or conflicts with, the constitutional provisions relating to declaration of the state of emergency. It in effect means that the Minister for Internal Security can on his own declare a state of emergency. To say the least, the section is oppressive and a violation of the constitution,” said the Chairman of the Media Owners Association (MOA) Linus Gitahi, the CEO of Nation Media Group (NMG) in a press statement in January 2009.
As long as the president himself has not declared a state of emergency, a ban on live broadcasts is unconstitutional. And according to Ian Fernandes, the managing director of Nation Digital Division at NMG, East and Central Africa’s largest media and publishing house, it is also a law that is outdated and has been overtaken by technology: “With the proliferation of digital media, anybody can publish (websites, blogs etc) and anyone can broadcast (Youtube). The law can (only) curtail broadcast media, i.e. TV and radio, through issuance of frequencies and licenses. But the whole world is moving towards digital media where local licenses and frequencies do not matter ... unless the CCK technically bars access to certain sites from Kenya. However, this would not stop people getting content out of Kenya and making it available worldwide,” he says.
For a company like NMG, any legislation that would affect the media and information technology industry in Kenya negatively could potentially cause significant losses to the company. In October 2008, the company integrated and relaunched its websites with help from CoreMedia CMS, a content management software company. “With the availability of broadband and satellite TV, our real competition will come from outside our borders and if we as local media do not get a level playing field, we will be inundated with foreign media and content who will have no restrictions. The public will then move with the better choice and we will lose control of what we set out to control,” says Fernandes.
NMG’s case also illustrates that there is no longer a clear-cut distinction between the media and the ICT sector: All sites for Nation Media are housed in one newsroom in order to combine online and print resources, editors now work together on content and over 200,000 articles form the last ten years have been uploaded. Headquartered in Nairobi with a presence in Uganda, Tanzania and Rwanda, harmful legislation in Kenya would hurt its businesses across the region.
Financial Implications for Media Houses
Media houses have also come out against what they consider unjustified additional burdens that are being imposed through the new legislations: Section 84 (j) (2) establishes a ‘Universal Service Fund’ to be managed by the Communications Commission of Kenya (CCK). This, the MOA claimed, meant that the media industry was now to be subjected to new taxes: “After paying VAT on its services, corporation tax on its profits and withholding tax on dividends, the media will now be subject to an undefined levy by the CCK,” said the MOA which argued that the levy was unfair, uncalled for and open to abuse to penalize the sector.
The new law states that the funds purpose shall be to support widespread access to support capacity building and promote innovation in information and communications technology services. It will have different sources of funding:
• A universal service levy charged by the CCK on licenses required by any media business;
• Parliamentary provisions;
• Interest from loans granted by the CCK (any person may apply to the CCK board for consideration of a loan from the fund),
• Income from any investments made by the CCK; and
• Any gifts, donations, grants and endowments made to the fund.
According to media practitioners, the levy, which is believed to be 0.5% to 1% of current media and ICT earnings of KES100b, will mean that up to an additional KES1.2b will be collected from businesses that have already paid their taxes. And under the current legislation, the use of these funds is so unregulated that it practically invites abuse, which obviously increases media owners’ opposition to it.
William Pike, the managing director of Nairobi Star, also considers the requirement for media houses to reapply for licenses within one year, having already invested millions in them, as distinctly business unfriendly: “It is like double taxation.”
Conflicts under a Unified Licensing Regime
Marcel Werner, Chairman of the Kenya ICT Federation (KIF) raises even more queries and wonders if a situation will arise where the new amendments and additions in the law will be undermined by a regulation promulgated by the CCK in 2008: In December 2008, several IT players in the country met with Christopher Kemei, the Assistant Director for Licensing and Compliance at the CCK. According to members present at the meeting, the meeting was intended to get clarifications on the unified license.
Under CCK regulations, unified licensing is a regulatory framework which embraces technological convergence and is supposed to encourage innovativeness. Under the framework, there is no distinction between for example mobile or fixed-line services, satellite or terrestrial, data or voice services, etc. It is also a framework where the differences in licenses are dependent on which layers of the model one operates in.
“During the meeting, not having the application forms on the table, I understood that ‘applications’ are facilities that host applications for third parties, in other words, internet service providers (ISPs) would fall in this category. I also understood that ‘content’ is digital content that is made available to subscribers at a fee,” says an interested party who attended the meeting.
However, it turns out that regulations passed by the CCK are much broader than initially thought. Under regulations for granting a content service provider license, “content services” means information of any kind normally provided at a fee and is delivered over electronic communications networks and services. They include broadcasting content, financial information services and other information society services.
On this, Ian Fernandes comments: “Today, the end user does not care how he or she gets (news) content - mobile, online, radio, TV, newspaper or magazines. Why then should CCK license radio stations and not web-sites?” He elaborates further on unified content distribution: “When a TV station distributes its signal through a transmitter, mast and antenna, this is similar infrastructure to what Safaricom would use to distribute its voice signals and data signals on which the same video content could go out. Why then license the two separately? Keeping this in mind, how do you combine unified content if you can only control broadcasting content through denying licenses/frequencies?”
A Basis for E-Commerce
On the upside, for businesses who have always been frustrated by the courts over unenforceability of email contracts and other electronic forms of documentation, the new law gives a reprieve: For the first time in Kenya, and many years after the internet revolutionalised the conduct of business, the law for the first time amends the Penal Code and the Evidence Act and allows for ‘electronic records’ to be adduced in court.
This creates a basis for e-commerce in Kenya and gives internet based transactions more legitimacy and avenues to grow. Indeed, it has been argued that online purchasing and selling of goods and services in Kenya was operating in a legal vacuum. Before this new law, online business transactions had no legal backing in Kenyan courts and transactions were done purely on trust and, if matters went wrong, the different parties had to make use of archaic, outdated laws in court to argue their case a big risk. Emails, for example, were not admissible in a Kenyan court of law.
Previously, even though still recognising the now defunct telegrams, Kenyan courts did not recognise anything to do with electronic records or emails. However, the amended law now defines electronic records as, “record(s) generated in digital form by an information system which can be transmitted within an information system or from one information system to another, and stored in an information system or other medium.” With the added recognition of a computer and its functions, internet and its capabilities, Kenyan courts can now acknowledge internet fraud as a specific crime in the country. Before this, one was normally charged with ‘theft’ or ‘false pretences’ in any case where electronic records had been used to commit a crime.
Similarly now, under the Penal Code, information is finally recognised as capable of being stolen, it is now also acknowledged that forged document may not only be written or printed, but can also be in electronic form. “Any person who makes a false document and fraudulently makes or transmits any electronic record or part of an electronic record, affixes any digital signature on any electronic record, or makes any mark denoting the authenticity of a digital signature, with the intention of causing it to be believed that such record, or part of document, electronic record or digital signature was made, signed, executed, transmitted or affixed by or by the authority of a person by whom or whose authority he knows that it was not made, signed, executed or affixed; is guilty of a crime,” reads the new amendment to the Penal Code. Before, only written and typed documents could be forged, online signatures where deemed to be none existent.
Anyone who also, without lawful authority or fraudulently, by cancellation or otherwise, alters an electronic record in any material part, after it has been made, executed or affixed with a digital signature, is also guilty of a criminal act for the first time. But the most significant changes are to the Evidence Act, where now a banker’s book can finally be electronic, opening the way for fraudulent transactions online to be adduced in court as evidence.
Signal Providers
The sight of numerous antennas all over the countryside, as several media house, telecommunications companies, internet service providers and others set up base to provide their services, has been criticised as both unappealing and a wasteful use of land as several competing companies lease out several plots of land to set up their masts.
The new law requires media houses to apply for a new license to be a signal provider so that they can use their own transmitters. If they do not obtain a new license, they have to share an existing transmitter from a company that has already set up one. Basically, the new law states that there will be a limit on the number of signal distributors companies: “Broadcasters will have to use the services of these signal distributors to distribute their signals. This avoids each broadcaster having a piece of land, a mast, a transmitter etc. The same signal distributor can also host telecoms etc. This is actually a more efficient way providing benefits to both the environment and the consumer since there is no need of multiple aerials,” explains Ian Fernandes.
While in principle many agree that this new amendment is good, there are ambiguities and grey areas in the new amendment that make industry players jittery: “In principle it is a good concept,” says William Pike. “But what happens to the existing equipment we have? Some of this equipment is worth millions of shillings. Are we going to sell the equipment to the signal providers? Right now, have to apply for a new license to be a signal provider so that we can use our own transmitters”.
Implementing Legislation
The uncertainty around e.g. the use of transmitters points to flawed lawmaking: The tenet of a good law is that it lacks any ambiguity and does not have any ‘grey areas’. In this case then, the law is clearly not clear on how the move to a signal distributor will work by not giving an explanation of what is to happen to existing equipment held by existing players, and not giving adequate explanations on whether this equipment will be rendered useless. Only the courts can clear any ambiguity that may be present.
“Every law that is passed by parliament is considered valid and clear, just like when a subsidiary law seems to deviate from the parent law, only the courts can clear any ambiguity that any party may feel is in the law, therefore, if any one feels that the Kenya Communications (Amendment) Act 2008 has, or created, any ambiguity, they have to go to court. The court will then interpret the law and clear any ambiguities or refer the same to the Kenya Law Reform Commission to have the law taken back to the Attorney General for amendments in parliament,” explains David Majanja, a commercial lawyer in Nairobi and an expert in information technology law, in regards to the ambiguity in the signal distribution issue.
On whether new regulations by the CCK will undermine the amended law and new enactments, a look at Kenya’s law application indicates what to expect. Under Kenyan law, the ‘parent act’, in this case the Communications Act, has precedence over the regulations from a body created by that law however, only the courts can declare this: “As long as no one goes to court to challenge the inconsistencies and apparent divergence from the parent act, nothing can really be done until the court does so,” adds David Majanja.
It should also be noted that President Mwai Kibaki’s directive to Information minister Samuel Poghisio and Attorney-General (AG) Amos Wako to meet media owners and other IT interested parties and hear their concerns and present them to cabinet, was mere politics and will result in no change to the new law any time soon: The most that the AG can do, after cabinet approval, is to draft another bill, amending the contentious sections and present it to parliament. Once in Parliament, the AG’s proposals must also go through the whole motions of becoming law, a process that is unlikely to take less than four years.
Currently, Parliament has not yet passed important bills such as the Anti Money Laundering Bill, new amendments to the Company’s Act and the Bankruptcy Act, yet these have been with the AG since 2003, it is therefore highly unlikely that the president’s seemingly conciliatory gesture would yield any results in the near future.
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