Whatever consumers may imagine bundles and caps to be, ICASA has yet again come up with a very blunt instrument that may put all current broadband services at risk, and could lead to price increases, rather than benefiting consumers. Fortunately, it's unlikely to make it all the way through the regulatory process in its current form.
If, as some legal experts are suggesting, the regulation is referring only to services sold explicitly as bundles (along the lines of prepaid data bundles, or prepaid electricity), then the approach appears fair (although even this will be challenged by most service providers who intend to remain in business).
However, if the expectation is that this logic extends to all contracts that have caps or bundled services of any kind e.g. a data cap per month, or free call minutes per month, then there is a very real danger that it could undermine the whole tariffing model, and force the industry back to old-fashioned usage billing for everything.
Monthly bundles and caps create a great deal of certainty for both the consumer and the provider - a fixed amount can be budgeted by both, as a cost for the one, and revenue for the other. In the case of broadband services, caps are also typically used as a means of controlling the load on the network - either on the access network, which is a finite resource, especially if radio - or on other parts of the network, such as international, where costs are high, and are shared across all users.
The regulation seems to suggest that any cap or bundle is something that has been sold to the customer, rather than a commercial mechanism to create fair, flat-rated pricing, and a technical mechanism to ensure fair use of the network. (Note that I'm not commenting here on whether the actual prices charged in South Africa are good or bad, just the logic of having different prices for different caps and bundles that do not have an unlimited lifespan.)
Purely in an accounting sense, any attempt to force a service provider to add up all the "unused" data in monthly bundles or caps, and roll this over forever (or pay it out in cash at the end of the contract?), creates a liability for the company that could grow rapidly and exponentially until the service provider is technically bankrupt. It's even more obvious how this will happen where there are real costs involved (e.g. interconnection fees per call), where service providers estimate their costs based on typical monthly usage, and are able to determine a maximum liability. In practice, of course, auditors would simply insist that any contracts that carry high potential future liabilities like this be cancelled, or that services with such contracts be withdrawn from the market.
As there are also practical, technical reasons why caps exist to protect the network, this approach would undermine this control mechanism, and force providers to limit usage in some other way e.g. charge per usage from the first Byte, and avoid any rollover whatsoever. Worse still, service providers may have to apply shaping to all services for the same purpose.
I'm sure ICASA thinks it's being a consumer champion with this approach, but what it's really doing is limiting the options for charging mechanisms for service providers, and hence limiting the opportunity for real competition in the market. The logical conclusion of this kind of approach is that ICASA should simply set the pricing structure and prices of all services, rapidly reducing competition (and the number of service providers) to zero (OK, maybe one service provider, but government-owned, with matching service levels).
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