doobiwan said:
I also think this regulation is the place to put Local Loop unbundling. Although it should be in a new section, it will have to be well thought out to frame it in context on ADSL. Alternatively we slip it into section 3.
I need help with this one. Any ideas?
I don't think we're going to force a change to the policy side of things around LLU. The DoC has to leave the local loop as is for 2 years. Unless one can argue that the 2 years has already expired due to all the dithering around the SNO.
I wonder exactly what is meant by the legislation stating that the SNO will have use of Telkom's infrastructure for 2 years? Does that mean that, in effect, there is a "hosting agreement" like there is with Cell-C and Vodacom, so that revenue is shared when using Telkom's infrastructure, and that allows the SNO time to get their own infrastructure going?
I get the impression that the licensing terms and legislation will allow the SNO to put in backbone links to strategic points such as local offices (telephone exchanges) and thence to use the existing copper cable. In that case, ISPs will be able to supply bandwidth to either Telkom or SNO broadband users as the case may be.
Who owns the physical infrastructure shouldn't matter a damn to the end user. You should be able to order an ADSL facility from the ISP of your choice. The ISP will then place an order with either Telkom or the SNO, and the subscriber's phone line will be connected to a DSLAM port. The ISP should be doing all the billing, in my opinion. The ISP will pay Telkom or SNO the installation fee that is stated in the draft regulations. The ISP will purchase wholesale bandwidth from either or both networks, and resell it to the end user. TelkomInternet must be forced to pay the same wholesale rate as the other ISPs.
With Telkom's new scheme of bundling local and national calls at a fixed rate, they are starting to come in line with the rest of the world. I see no reason why they can't resell those telephone call bundles via ISPs too. One should be able to order a bundle consisting of ADSL and national and local calls at a fixed monthly charge, just as one can in the U.K. and elsewhere. Of course, in the U.K., there is no cap on calls or bandwidth, depending on the package you order. It's about speed. You order a line with a defined connection speed. Faster is more expensive, since it allows one to use more bandwidth. Only calls outside of the provider network are charged for, hence calls to premium numbers and cellphones are extra. Telkom have one of the most sophisticated billing systems in the world. While other telcos have been moving away from billing per time unit for local and national call, because the cost exceeds the benefit, we have the opposite. That indicates that the underlying call charges are excessive. It's worth billing by the minute or half minute and paying by the second for the interconnection, so they do it. The rates that ICASA allows Telkom to charge make it worth tracking every second. If we follow world trends, that will fall away. It's quite logical. There is a fixed cost to provide the ability for people to make phone calls or transmit data. The cost is directly related to the peak demand that has to be catered for. It's exactly like electricity. Telkom has to provide enough bandwidth so that everyone who wishes to use the phone, or send packets of data, is able to do so when they wish. Of course, there isn't enough bandwidth for every caller on an exchange to be talking at the same time, but voice is bursty traffic and it's the peak that matters. Telkom can't necessarily connect every call that is made, hence you get equipment busy tones at times of heavy use such as Midnight on 31 December, or if there is a natural disaster.
Once you have recovered the cost of providing the infrastructure needed to cater for the peak demand of voice and data traffic, whatever is charged above that level is profit. Assuming a static user base, the costs are mostly fixed costs. The only variable costs to a fixed-line network are interconnection costs on International and cellular calls, and those are directly recovered from the user in any case.
I also think that one should be able to order a line for ADSL with, or without a telephone service. There should be a line rental for telephone service, and a lower rental for just ADSL, since, in that case, there is no need to provide a port on an exchange, and to apportion cost of telephone infrastructure to that specific line.
I do think that more thought should go into the whole structure of Telkom. Until we have LLU and self-provisioning and international landing rights for all players, then Telkom should not be allowed to directly compete with its clients. If there is to be a Telkom ISP, and Telkom VANs, then they should be forced to run as seperate companies, completely ringfenced from Telkom the provider of fixed-line infrastructure. I imagine that this is the issue that the Competition Board complaint from the ISPA addresses.
We are not going to get LLU for two years unless the ANC government gets the idea that it's good for the ANC voters, and all the vested interests involved. It's possible to declare that the two years is counted from when Telkom's 5 year monopoly (plus an extra year, assuming that they met their license obligations) ran out, but it's unlikely.
Unless there is direct price setting by ICASA, then we can expect Telkom and the SNO to carry on charging "what the market can pay" as Molotsane said, and to just split the profit.
Although these regulations are ADSL related, the principle is the same for all other fixed-line infrastructure. Telkom should not be allowed to charge many multiples of the actual cost of providing bandwidth. The practice is harmful to the people of South Africa.
My suggestion is that we concentrate on getting rid of the "access fee" and also get regulations in place that price control the wholesale provisioning of bandwidth in such a way that it is fair to all parties. By that, I mean that all Second Tier ISPs must pay the same rate, and that rate must be cost-related. In other words, Telkom can't be expected to provide Broadband or dial-up Internet bandwidth at less that it actually costs to install and run the necessary infrastructure. However, the margin that they are allowed to make on reselling bandwidth should hard capped
in order to encourage technological development in South Africa.
I hope this makes sense and provokes some thought.
