LLU hearings: Questions from ICASA for mybb users

[ellipsis]

Questions from ICASA listed below. Please let us have your thoughts so we can prepare the response.
Deadline for responses: 12h00 on 24 October 2011.

Please note (use the number) the question to which you're responding in your response.

1. Noting that MyBroadband users support Naked DSL, what do they think of Telkom’s view that this is not technically feasible?
   
   
2. Do MyBroadband users view ICASA’s approach to LLU using Chapter 8 of the ECA and the Facilities Leasing Regulations as the right way to go about unbundling the loop?
   
   
3. Do you think LLU will help increase the broadband penetration in SA?
   
   
4. Are you aware that NDSL may cost more? It could be argued that if you wanted NDSL, take your voice price, plus your ADSL price, and there you go, that’s the price of Naked DSL. Have the MyBroadband users considered this? That NDSL might actually cost more.
   
   
5. MyBroadband end-users are very interested in Full LLU, but they’re consumers, not network builders. [ICASA] didn’t know that consumers cared about how they got their services, just that they cared about the quality of the service and that they enjoyed their service. So from an end-user’s perspective, is there a difference between bitstream and full loop unbundling? Because they’re different, from a network topology and access point of view, but not necessarily different from an end-user’s perspective if the end-user gets an SLA that they’re happy with. So how did your end-users justify bitstream to full loop unbundling?
   
   
6. Why would the end user worry about predatory pricing? It’s when the monopoly charges a price below cost. How does this negatively impact the end-user?
   
   
7. Did the forum members have any opinion regarding whether LLU should include the wireless local loop as well?
   
   
8. The open access approach in chapter 8 that [ICASA] is talking about may also include new investment fibre networks. What would the MyBroadband forum users’ views be on the open-access regime to new investment?

---
As requested, below is a short write-up on Chapter 8 and the Facilities Leasing Regulations.
Note that this is just a quick, layperson-friendly overview and does not set out all of the details relating to facilities leasing. This is just intended to educate you on the basics of what the relevant sections and regulations on facilities leasing cover in order to enable you to understand the questions posed by ICASA. The full Electronic Communications Act (ECA) and Facilities Leasing Regulations are available online or on request.

Chapter 8 of the ECA sets out that all ECNS (electronic communications network services) licensees are obliged to enter into a facilities leasing agreement with any other ECNS licensee (or licence-exempt entity) who requests them to do so, as long as that request is regarded as ‘reasonable’.

This chapter also requires (s43(8)) ICASA to prescribe a list of essential facilities

including but not limited to:
(a) electronic communications facilities, including without limitation local loops, sub-loops and associated electronic communications facilities for accessing subscribers and provisioning services;
(b) electronic communications facilities connected to international electronic communications facilities such as submarine cables and satellite earth stations; and
(c) any other such facilities,
required to be leased by an electronic communications network service licensee in terms of subsection (1) [ss1: obligation to lease facilities].

‘Electronic communications facility’ is defined in the ECA as including but not limited to any –

(a) wire;
(b) cable (including undersea and land-based fibre optic cables);
(c) antenna;
(d) mast;
(e) satellite transponder;
(f) circuit;
(g) cable landing station;
(h) international gateway;
(i) earth station; and
(j) radio apparatus or other thing,
which can be used for, or in connection with, electronic communications, including where applicable—
(i) collocation space;
(ii) monitoring equipment;
(iii) space on or within poles, ducts, cable trays, manholes, hand holds and conduits; and
(iv) associated support systems, sub-systems and services, ancillary to such electronic communications facilities or otherwise necessary for controlling connectivity of the various electronic communications facilities for proper functionality, control, integration and utilisation of such electronic communications facilities;

Chapter 8 also requires ICASA to prescribe regulations to facilitate the conclusion of facilities leasing agreements (s44(1)), which ICASA has done with the Facilities Leasing Regulations. These Regulations add some substance to the basic obligations in the ECA. It sets out when requests will be technically and financially feasible, and thus will be considered reasonable. It sets out timeframes, required information from facilities providers and facilities seekers, what must be included in a facilities leasing agreement, and the procedure when disputes arise. The Regulations require facilities leasing agreements to be filed with ICASA for review, to confirm that they comply with the ECA and the Facilities Leasing Regulations.

[Billy]

Question 4

What has been the overseas experience with this? Did it cost more or less?


As several of the questions could be yes/no perhaps a poll of those.

[ellipsis]

Would prefer to avoid a poll, as we want some reasons for the answer given rather than just yes/no answers.

[MickeyD]

Regarding the issue of the technical difficulty to de-link the directory number (DN) from the asset (as per Richard Majoor's reply) as a precursor to Naked ADSL:

How difficult would it be to link the asset to the physical street address?
How much will it cost to implement this change?
I would presume that Telkom would either recover this cost from the other licensees or from us consumers.

[Scooby_Doo]

Re: Question 5. By unbundling the local loop international experience says that we will get a far better value, service and investment than allowing Telkom to hold all the cards and we get some random sla. chances are that sla will never get any better than the original one.

Plus if government forces some min sla between Telkom and it's customers then who will enforce this? In my opinion this will force icasa to get involved and put extra pressure on them to resolve complaints which will frustrate users further.

Competition from the local loop unbundling will be far more effective than any sla could hope to be.

Sent from my GT-I9100 using MyBroadband Android App

[MickeyD]

[*]Noting that MyBroadband users support Naked DSL, what do they think of Telkom’s view that this is not technically feasible?

It is technically feasible but at a cost. The issue is who will bear this cost, as it will be significant?

[*]Do MyBroadband users view ICASA’s approach to LLU using Chapter 8 of the ECA and the Facilities Leasing Regulations as the right way to go about unbundling the loop?

No. LLU should be included in the ECA as a specific provision. This will eleiminate many fo the legal challenges about to hit ICASA.

[*]Do you think LLU will help increase the broadband penetration in SA?

Yes. The number of data subscribers will increase while POTS subscribers will decrease. The net effect on copper network growth will be negligible if any at all.

[*]Are you aware that NDSL may cost more? It could be argued that if you wanted NDSL, take your voice price, plus your ADSL price, and there you go, that’s the price of Naked DSL. Have the MyBroadband users considered this? That NDSL might actually cost more.

Yes, I do think it will cost more UNLESS it is accompanied by full LLU where competitive market forces will determine pricing.

[*]MyBroadband end-users are very interested in Full LLU, but they’re consumers, not network builders. [ICASA] didn’t know that consumers cared about how they got their services, just that they cared about the quality of the service and that they enjoyed their service. So from an end-user’s perspective, is there a difference between bitstream and full loop unbundling? Because they’re different, from a network topology and access point of view, but not necessarily different from an end-user’s perspective if the end-user gets an SLA that they’re happy with. So how did your end-users justify bitstream to full loop unbundling?

The dream is that with full LLU there will be SLA's in place to ensure a better quality of service than what is currently the experience of many consumers. In terms of quality, ADSL remains the leader if properly implemented and maintained. Hence we do care how we receive our services.

[*]Why would the end user worry about predatory pricing? It’s when the monopoly charges a price below cost. How does this negatively impact the end-user?

Bring it on! If I can get a premium product at a great price why should I complain?

[*]Did the forum members have any opinion regarding whether LLU should include the wireless local loop as well?

Yes, it should. This is a means to extend the broadband footprint.

[*]The open access approach in chapter 8 that [ICASA] is talking about may also include new investment fibre networks. What would the MyBroadband forum users’ views be on the open-access regime to new investment?

Obviously I would support LLU on any optic fibre network in the last mile; same principle as wireless local loop. If the local loop is to be unbundled, then all broadcast mediums in the last mile must be unbundled.

[fonoi]

1. I find it strange that a company claiming to be world class throughout the "2010 Soccer World Cup" will say this is technically infeasible. Many countries have successfully implemented this including the Philippines which Telkom should note is an advanced developing country much like South Africa.

3. If you look at the fixed broadband line number by country, most countries offering naked adsl enjoy higher broadband penetration rates then South Africa.

4. Naked adsl is almost always cheaper in countries which have implemented it the cost savings may not be huge but they are present.

5. Telkom seems to be of the view that customers do not know what they want and need as evidenced by the uncapped adsl stance they took, yet we know they have since changed their views on that..
Many of the users of Mybb are in the ICT field and understand the difference between bitstream access and full LLU. Full LLU will encourage companies who are prepared to commit resources to infrastructure to invest in new generation equipment and force Telkom to follow suit to stay competitive.

6. Predatory pricing has a negative impact on the consumer because the "benefits" are short term while the negative effects on competition and the economy in general are long term.

[VioAdmin]

This thread should be made front page news and stickied so that other people, especially those who are technical on MyBB can assist. We have a bunch of them but I fear 90% of them have no idea this thread even exists, yet.

[j4ck455]

1. I believe Telkom's view that Naked DSL is not technically feasible, to be a blatant lie for the following reason:

The same two copper wires are used to transmit analogue voice and ADSL, these signals are transmitted at different frequencies to prevent interference from either of the two types of signals, the ADSL signal is then split off into a DSLAM port card, and the analogue signal goes through a patch panel where the two copper wires join Telkom's analogue voice switching network.

In order for Telkom to provide an ADSL only (Naked DSL / NDSL) service, Telkom simply has to instruct a Telkom technician to pull the two copper wires out of the analogue patch panel and insulate the ends to prevent accidental shorting, the result will be that the customer no longer has an analogue dial tone and cannot make or receive analogue calls, but the customer will still have ADSL via the same two copper wires going into the DSLAM port card allocated to their ADSL subscription service.

3. I believe that Telkom's monopoly continues to allow Telkom the luxury of cherry-picking consumers from more affluent areas and gated villages, providing fixed line services that are of substandard quality of service and exorbitantly priced compared to what has been available for many years internationally, this monopoly has also severely disadvantaged the poor to whom Telkom refuses to provide services since the poor cannot afford to pay what Telkom demands. Introducing competition to break Telkom's fixed line monopoly at all levels (wholesale through to retail), will result in other service providers sharing the cost on an open access basis to roll out both fixed line and wireless services to places where Telkom currently still refuses to provide any services whatsoever, this will result in an increase in broadband penetration in SA (service providers just need ICASA's permission before drawing up business plans and embarking on feasibility studies).


4. It can equally be argued that Telkom's analogue voice network is outdated and a costly beast to run and does not have much scope as far as converged services are concerned. Migrating the analogue network to VoIP could in fact save Telkom a vast amount of money over many years, however Telkom with its fixed line monopoly, has no incentive to make more efficient use of enabling services like ADSL as a carrier for VoIP. NDSL will give Telkom the kick up the rear end that Telkom so desperately needs.

In essence, I do not agree that a logical argument can be made to assert that the cost of NDSL equates to the cost of analogue added to the cost of ADSL. If ICASA wants to balance that equation, ICASA will have to factor in the destructive and unseen singularity (Black Hole) that is Telkom and its inefficiencies/incompetence.


5. Consumers do care about the exorbitant pricing we have been charged by Telkom for years to feed its greedy shareholders, and the manner in which LLU is introduced has a direct bearing on the level and extent of competition that will be possible in the short and longer terms. If Full LLU is never introduced, the result will be that Telkom maintains its fixed line monopoly and consumers will continue to suffer from exorbitant pricing. Bitstream access should be introduced with immediate effect (no later than November 2011 as per the ISPA's recommendation), that will be a significant first step in the correct direction, but will by no means break Telkom's fixed line monopoly, it will however be a good start.


6. The definition of "predatory pricing" applied by the ICASA councillor that raised this question, is insufficient. It is a fact that Telkom still has a fixed line monopoly, and it follows that any fixed line competitors that Telkom has are superfluous having no real effect on Telkom's fixed line monopoly, Telkom as the predator is feeding off of the carcases of consumers and potential competitors by charging exorbitant prices for fixed line services (exorbitant pricing for ADSL to consumers and IPConnect to ISPs). Predatory pricing does matter when one is the victim of the predator.


7. Telkom got handed the copper network on a platter when it was listed as a private legal entity. Wireless broadband networks did not exist at that time, furthermore LLU is about breaking the monopoly that Telkom abuses on a daily basis, by introducing competition into the local loop, there is sufficient competition amongst wireless broadband network operators (albeit not so favourable wireless broadband pricing to consumers) that there is currently no pressing need to unbundle wireless broadband local loops, ICASA should focus on introducing competition into fixed local loops instead of becoming distracted with wireless broadband local loops. ICASA can however draw up recommendations for wireless broadband operators such that sharing of infrastructure (masts etc) becomes the norm instead of the exception as is currently the case.

[caroper]

[*]Noting that MyBroadband users support Naked DSL, what do they think of Telkom’s view that this is not technically feasible?

It is not even a technical question, it is pure economics. The same piece of copper is used for both voice and data. Telkom has two charges, one for voice, one for data, ADSL subscribers pay for voice and ADSL as separately billed items on the same line. Naked ADSL says we will pay for the ADSL charge but not the voice charge as we do not require that service.

[*]Do MyBroadband users view ICASA’s approach to LLU using Chapter 8 of the ECA and the Facilities Leasing Regulations as the right way to go about unbundling the loop?

pass

[*]Do you think LLU will help increase the broadband penetration in SA?

Most definitely. the largest hindrance to Broadband uptake in south Africa is Telkom. Open up the infrastructure to others and innovative products and services will accelerate the uptake.

[*]Are you aware that NDSL may cost more? It could be argued that if you wanted NDSL, take your voice price, plus your ADSL price, and there you go, that’s the price of Naked DSL. Have the MyBroadband users considered this? That NDSL might actually cost more.

It would only cost more if ICASA allowed it to cost more. There is no technical reason why providing 2 services on one line, and charging line rental twice for the same line, should be cheaper than providing only one service on the same line. Perhaps ICASA should audit the figures next time Telkom apply for an increase in rates.

[*]MyBroadband end-users are very interested in Full LLU, but they’re consumers, not network builders. [ICASA] didn’t know that consumers cared about how they got their services, just that they cared about the quality of the service and that they enjoyed their service. So from an end-user’s perspective, is there a difference between bitstream and full loop unbundling? Because they’re different, from a network topology and access point of view, but not necessarily different from an end-user’s perspective if the end-user gets an SLA that they’re happy with. So how did your end-users justify bitstream to full loop unbundling?

The majority of the internet concept, and the communication protocols used in the internet, were created by the end users, not by the incumbent telco's of the world. In the South African context ADSL is an expensive commodity, so much so that early uptake was largely by technically inclined users. They probably still are in the majority, especially on the most expensive product packages. Those users understand the technology and what they require from it. They are not content to have telkom, or any other party dictate how or what they should use the services for. They purchase the service and wish to innovate and help drive technology and the internet forward. bitstream is an acceptable first step, but is not a viable alternative to full LLU as it still gives telkom the power to shape as well as dictate the use of the service and hence potentially hinder innovation.

[*]Why would the end user worry about predatory pricing? It’s when the monopoly charges a price below cost. How does this negatively impact the end-user?

Creative accounting comes to mind but I will pass on this one

[*]Did the forum members have any opinion regarding whether LLU should include the wireless local loop as well?

It would be nice to be able to purchase bandwidth from only one ISP (of the consumers choice) and have the ability to use that bandwidth over any available access method, however, priority should be given to the copper network as that is the best candidate currently for high speed low latency internet access and is an irreplaceable asset.

[*]The open access approach in chapter 8 that [ICASA] is talking about may also include new investment fibre networks. What would the MyBroadband forum users’ views be on the open-access regime to new investment?

as above.

[telgom]

1. It is ridiculous. Telkom is a regulated monopoly and the main issue will be how to regulate the price of the naked line and the insane “access” prices still payable to Telkom. This will be easier to do than regulating full unbundling.

2. I don't think that LLU will be that useful at this stage. It would have been ten years ago but this is no longer the right time. It might seem like a good way to get rid of the incredibly high prices for the ADSL lines but the correct way is for the price of the latter to be regulated and not to inhibited investment in new and separate networks.

3. No it won't. It will create competition and better prices for existing customers in the short term but in the long run it will inhibit investment in new networks (like fibre and cable). Switzerland has only limited LLU and Hong Kong has already stopped it. For LLU to work properly, you need a strong and decisive regulator anyway. Even India has developed a relatively competitive market without LLU.

4. Yes.

5. myBB users are interested in a competitive telecoms market only.

6. Predatory pricing is not really detrimental to the consumer in the short term. Even in the long run, it will encourage investment in non-Telkom networks, which is exactly what we want.

7. The wireless environment is substantially competitive and no intervention is necessary.

8. It is not necessary to regulate for it.

[ToxicBunny]

I will put my answers to the questions as best I can below each one.... ( I apologise up front for the long answers )

[1]Noting that MyBroadband users support Naked DSL, what do they think of Telkom’s view that this is not technically feasible?

It may be technically infeasible from Telkom's accounting point of view as it will deprecate an income stream that they have become accustomed to receiving ever since they implemented ADSL in this country. From a purely technological feasibility point of view, Telkom are peddling lies, almost every other Fixed Line provider in the world is able to offer Naked ADSL, and I very much doubt that Telkom is running any actual equipment that is very different from their international counterparts, so if they can do it then Telkom can do it as well.

[2]Do MyBroadband users view ICASA’s approach to LLU using Chapter 8 of the ECA and the Facilities Leasing Regulations as the right way to go about unbundling the loop?

From a purely personal point of view, I am unphased as to how ICASA achieve LLU just as long as they achieve it. From a time based point of view, I am of the opinion that using the Facilities Leasing Regulations are very possibly the right way to go as it is an established piece of legislation that Telkom will HAVE to follow should the LLU be classifed as an essential facility.

[3]Do you think LLU will help increase the broadband penetration in SA?

In the short term, a very honest answer is no it won't, but in the medium to long term yes it will as it will provide new options to customers who are currently unable to afford the basic cost that Telkom charges for a decent fixed-line connection. It will help drive innovation in the broadband space which is an absolute necessity in this country.

[4]Are you aware that NDSL may cost more? It could be argued that if you wanted NDSL, take your voice price, plus your ADSL price, and there you go, that’s the price of Naked DSL. Have the MyBroadband users considered this? That NDSL might actually cost more.

We have considered this, and it was included in the original presentation to ICASA in relation to the Access Line Deficit and how we as consumers must not be punished for Telkoms own inefficiencies. We are aware that is very probably the route that Telkom will take should they be forced to provide Naked ADSL. Should the do so, it will of course make the option unattactive to us as end-consumers.

[5]MyBroadband end-users are very interested in Full LLU, but they’re consumers, not network builders. [ICASA] didn’t know that consumers cared about how they got their services, just that they cared about the quality of the service and that they enjoyed their service. So from an end-user’s perspective, is there a difference between bitstream and full loop unbundling? Because they’re different, from a network topology and access point of view, but not necessarily different from an end-user’s perspective if the end-user gets an SLA that they’re happy with. So how did your end-users justify bitstream to full loop unbundling?

For ICASA's own reference, since they are not a part of this online community, a large number of us are very heavily involved in IT as well as Telecommunications so this process gives us a way to change things from the outside whilst still attempting to change things from the inside as well. A large number of us are very knowledgable in the area of network buildouts and the challenges. The reason we as consumers are very interested in Full LLU is that it gives us as consumers (and very technical ones at that) the possibility of being offered different technologies to use for our connections by different companies, depending on the technical requirements that we have for the connection. It also provides network operators (other than Telkom) to possibly provide things like FTTH should the area they are operating in prove to be profitable enough to warrant such a network buildout. Bitstream is a good first step, given how expensive and ultimately backwards the current IPC model that Telkom employs is, but its just that, a first step. This country desperately needs to open up the opportunity for other companies to compete head on with Telkom without having to spend billions of Rands to build a second network when the network (albeit aging) is already in place. Full LLU will initially not change the status quo very much in terms of which consumers deal with which providers for their Network Access, but in the medium term when more innovative offerings come about from it, one might see certain operators getting a larger share from specific exchanges and then being able to justify regenerating the network and offering services such as FTTH and VOD.

[6]Why would the end user worry about predatory pricing? It’s when the monopoly charges a price below cost. How does this negatively impact the end-user?

I would like to correct the ICASA councillor, predatory pricing is not when a monopoly charges a price below cost, that is actually classified as loss leader pricing.
BUT in terms of what ICASA are referencing, pricing a product below cost is a very negative thing for the consumer as it will ultimately lead to the smaller and more innovative providers going out of business as they don't have multiple revenue streams that can be used to subsidise the lossleader product that is priced below cost. This will in term limit the options a consumer has at the end of the day. There is also the very real possibility that once the product that is priced below cost has driven all the other competitors out of the market the price of the product will be raised to supra-competitive pricing which will in turn negatively impac the consumer, which will then turn have a negative impact on the economy in general.

[7]Did the forum members have any opinion regarding whether LLU should include the wireless local loop as well?

From a complete fairness point of view, yes LLU must include all last-mile technologies. From a personal opinion, including the wireless local loop has the possibility of having multiple cellphone towers in an area which are an eye-sore alot of the time. It could possibly also reduce the network cost for the Cellphone operators (I am making an assumption on this and do stand to be corrected). From a consumers point of view, unbundling the wireless local loop does give network operators some very interesting possibilities for VERY innovative products that could be quite well received by consumers.

[8]The open access approach in chapter 8 that [ICASA] is talking about may also include new investment fibre networks. What would the MyBroadband forum users’ views be on the open-access regime to new investment?

If a company (or consortium, or para-statal) is building out a new fibre network, then it makes sense to do the ROI etc on the open access framework in my opinion. We are already seeing multiple companies joining up to do infrastructure spend on things like fibre networks as well as companies like DFA being formed that do purely infrastructure build out, and the actual operation of the network itself is up to the people using the links in the way that they need from my understanding. In an open access regime there will be fewer massive networks being built out, which while it may sound like a negative thing, is in actuality a positive, as it reduces companies requires to embark on large infrastructure spends to service all areas, rather they can use infrastructure that is already existing in an area and add innovative products to their lineups.

[jackshiels]

Questions from ICASA listed below. Please let us have your thoughts so we can prepare the response.
Deadline for responses: 12h00 on 24 October 2011.

Please note (use the number) the question to which you're responding in your response.

1. I think it is a way of milking the consumer dry under the guise of financial necessity. We need naked ADSL as it is against our rights to force us to pay such enormous amounts of money for an internet connection. Telkom is responsible for holding this country back.

2. I don't understand what this is.

3. Yes. Provided Telkom does not drag its feet the end result could be great. It needs to be handled well, however otherwise infrastructure could go unmaintained and start to fail.

4. Telkom can expect a lot of people to leave them if they do this. Their time is up - the huge prices need to stop!

5. It will allow other companies to install faster and more efficient methods of ADSL and VDSL in the exchanges, giving us much needed speed upgrades and lower prices. As well as this Telkom's poor technical support could be handled by more caring companies - ones that actually fix problems and provide jobs.

6. I don't fully understand the question.

7. Undecided.
mpetitivity is paramount in the internet industry.

[ellipsis]

On request, we will put together something to explain Chapter 8 and the Facilities Leasing Regulations to enable you to answer the questions with a bit more insight.

[j4ck455]

On request, we will put together something to explain Chapter 8 and the Facilities Leasing Regulations to enable you to answer the questions with a bit more insight.

I did not feel comfortable answering questions 2 and 8 without having proper insight into ECA chapter 8 and the FLRs, so even a brief summary of both would be great, thanks .