Parastatal reform was part of the government's broader project to modify the apartheid system. Apartheid may have been a multifaceted, systemic method of political oppression along racial lines, but, at bottom and in origin, it was a system for the control of labor. “Reform apartheid”, inaugurated by P. W. Botha's verligte faction of the National Party, represented the recognition that that system of control had become dysfunctional, that many of the structures guaranteeing white privilege were now incompatible with the demands of a modern economy. Reform apartheid comprised a contradictory set of strategies: the improvement of the basic conditions of black life but the lessening of state intervention in the economy; devolution of political power to local areas but maintainence of the prohibition against African participation in national political life. With respect to the parastatals, reform apartheid resulted in both their expansion and the attempt to privatize them. Reform apartheid's aim was to end formal apartheid but reconsolidate white supremacy through the market and a restricted political franchise. This propelled, in classic dialectical fashion, the emergence of a broad, coherent internal opposition movement against the government's top–down reforms. The violent conflict over the reform of apartheid in the 1980s set the stage for February 1990 and structured the political struggles over the parastatals in the democratic transition period. In the activist anti-apartheid civil society organizations lay the groundwork for the political culture of consultation and transparency characteristic of the post–February 1990 democratic transition period.

In early 1991, I received what can only be described as a fan letter. Most academicians, myself included, do not get fan mail. Indeed, most of us feel fortunate to have our work merit a review in some arcane scholarly journal. At any rate, this fan letter was doubly unusual in that it was postmarked South Africa. The letter's author was W. J. “Jimmy” Taylor, Deputy Postmaster General of the Republic of South Africa and head of the country's telecommunications monopoly. Mr. Taylor indicated that he had obtained a copy of my book, The Irony of Regulatory Reform: The Deregulation of American Telecommunications, through Oxford University Press's Johannesburg office, and was writing to commend my analysis of the communications revolution and the transformation in communications policy and regulation. Needless to say I was thrown for a loop. What did it mean that a high official of a state apparatus in one of the most repressive regimes in modern times thought highly of my scholarly work? Was there something in my ambivalent, if not skeptical, assessment of American deregulation that gave succor to authoritarian bureaucrats? Realizing I didn't know enough to address these worries adequately, I merely dashed off a thank you to the Deputy PMG, and not wanting to jeopardize any future contacts, said I would love to visit South Africa if and when democracy was put in place.

The Mount Grace Country Hotel in Magaliesburg isn't really far enough from Johannesburg to qualify as a “bush” resort, but it has the kind of rural, almost colonial, elegance to be familiar as a posh, quiet getaway spot for the white South African elite. Perhaps this is why the Minister of Posts, Telecommunications and Broadcasting Dr. Z. Pallo Jordan craftily chose it as the venue for the National Colloquium on Telecommunications Policy in November 1995. Where once they could set foot at the Mount Grace only as busboys and chambermaids, black delegates to the colloquium would mix with their white counterparts on equal footing. Jordan had been on the job as Cabinet minister for a little over a year, since the African National Congress alliance received the lion's share of the vote in South Africa's first free election in April 1994 and took the reins of government as the dominant bloc in a multiparty government of national unity. A respected ANC intellectual, Jordan was rumored to be bored with this second-rank ministry and disengaged from its operations. Yet he had initiated an unusual policy-making process in which the public, and sectoral “stakeholders” in particular, were directly engaged in policy formulation. Called the National Telecommunications Policy Project (NTPP), the process was moving on schedule toward its next crucial phase, this so-called colloquium.

Surprisingly, a good deal of continuity can be found between the apartheid government's concrete proposals to reform the communications sector during the final years of white rule and those pursued after the ANC alliance gained access to and dominance within the policy-making arena. Several of the main recommendations of the Viljoen Task Group report on broadcasting were effectively replicated in the Independent Broadcasting Authority Act and the IBA's Triple Inquiry Report. Likewise, the 1992 study of the telecommunications sector conducted by Coopers & Lybrand for the old Department of Posts and Telecommunications looks rather like an early blueprint of the Telecommunications Act of 1996. No doubt this is in part due to the structure of (dare it be said in such old-fashioned terms) the objective conditions and forces shaping events in the communications sector and to the limited number of reasonable reform options. Largely irrespective of their apartheid pedigree, bloated and debt-ridden state-owned and -operated South African monopoly enterprises in both broadcasting and telecommunications faced market and technological conditions that had begun to erode their monopoly control. Would-be competitors, both domestic and international, were poised at the ready to take advantage of this erosion. This predicament has affected virtually all broadcast and telecommunications monopolies worldwide in recent years. Some accommodation of the erosion of monopoly and the reality of competition was virtually inevitable.

The final reform process in the communications sector revolved around the South African Communication Service (SACS), the state bureaucracy that performed information functions and had long served as the apartheid government's public relations mouthpiece. Like so many other institutions in the immediate post-apartheid period, SACS was targeted for transformation. Indeed, there was sentiment for eliminating the service entirely. The organization was seen by many as irredeemable, its mission regarded as an anathema in a now democratic polity. Others saw SACS as an important means to disseminate the new government's policies. But should a democratic government have an official information service? The debate over the fate of SACS after 1994 was a fight, in complicated fashion, over the vision of the post-apartheid communications system. In some respects that vision had already been decided along the way, albeit in piecemeal fashion. Broadcasting, as we have seen, would be a mixed system of three levels: a public service broadcaster formally independent of political control; a limited domain of commercial broadcasting with significant local content obligations and black shareholding; and locally controlled community radio – all overseen by a constitutionally mandated Independent Broadcasting Authority. In the telecommunications sector, the Green Paper/White Paper consultative reform process envisioned a majority state-owned Telkom, but infused by foreign shareholding capital, it would take on the task of expanding the telephone network to the previously disadvantaged as a responsibility fixed in its license.

As was the case with broadcasting, reform apartheid set in motion a complex process in which an inescapable reform of the South African telecommunications sector became tied to the subtle politics of the government's effort to maintain white dominance in a post-apartheid dispensation. Even more than with broadcasting, internal sectoral dynamics set the reform process in motion in telecommunications. Recall that in the effort to meet the needs of business and begin to extend service to black neighborhoods, the South African Posts and Telecommunications had borrowed heavily to digitalize its network and expand its infrastructure in the 1980s. Despite, or perhaps as a consequence of, this effort, the SAPT came open to criticism for its alleged goldplating, inefficiency, bloated workforce, and considerable debt. Trashed in the de Villiers Report (Republic of South Africa, 1989) and facing competition from prospective new entrants deploying new technologies by the end of the decade, the SAPT looked to be a parastatal ripe for change in a sector badly in need of reform. The SAPT was the subject of a legislative effort in 1990 to separate telecommunications from posts, to remove both from the line responsibilities of the ministry, and to prepare the parastatal for privatization.

A good chunk of the South African telecommunications story is little different from those of other countries in the past several years.

The political dynamic of the first couple of years after February 1990 consisted of the government positioning itself for negotiations and moving ahead in “reform” efforts that would alter the nature of the relationship between the economy and the state, while the ANC found itself in catch-up mode, trying to make a rapid transition from an exiled liberation movement to a functioning political party. The general political situation was, of course, more complicated than this. From 1990 to 1992 the Afrikaner hard-line and shadowy movement of military operatives (called by observers the “Third Force”) engaged in a largely successful effort to disturb the path of negotiations by killing key political persons, fueling civil strife, and exacerbating the hostility between the ANC and the Inkatha Freedom Party. But in most of the issues of the 1990–94 transition period, the main protagonists were the National Party and the ANC. This was particularly true in the media policy arena. The Democratic Party was occasionally active in the debate, particularly when broadcast issues entered the CODESA constitutional negotiations, but in the end was a minor player. The Conservative Party, the Pan-Africanist Congress, and the Inkatha Freedom Party were virtually invisible in the media policy arena.

The National Party's various policy thrusts – particularly those concerning the parastatals – were ensconced within a stealthy bit of politics that amalgamated a needed transformation of old apartheid state-owned enterprises with a stratagem to secure white dominance by establishing market-oriented structures for these institutions.

The structures, functions, institutions, and political forces that constituted the ancien régime in the South African communications sector prior to 1990 only make sense within the political history of modern South Africa. The institutions of communication – the press, broadcasting, and telecommunications – were central to the evolution of the South African state and the apartheid system. The press gave voice and to some degree mediated the conflict between English- and Afrikaans-speaking communities; broadcasting, a product of tense compromises between the white groups, embodied the terms of their hegemonic alliance and expressed the ideological content of racial domination; state-owned and -operated telecommunications contributed importantly to the mechanisms that coordinated the apartheid economy.

White domination of the majority black population has pretty much been the rule since Dutch settlers arrived in the Cape peninsula in the latter half of the seventeenth century. Though serious hostility has always existed between Afrikaners, the descendants of the Dutch settlers, and the English (who began settling the territory after Britain seized the Cape in 1806 in order to protect its sea route to India), they essentially made common cause when it came to the domination of blacks and the use of black labor. This was particularly the case after diamonds and gold were discovered in the latter part of the nineteenth century. Mining changed the nature of the largely agriculture-oriented South African economy and society.