Telecoms2.11.2009

To regulate or not to regulate

While network neutrality has not been a serious problem in South Africa to date, we cannot pretend that the issue will not affect us in the future, particularly as competition in the local telecoms market opens up.  Net neutrality, which aims to ensure that all internet sites are treated equally by those that hold the bandwidth key, has been hotly debated in Europe and the US, with the latter’s lawmakers introducing a new net neutrality Bill last year.

The content kings are at loggerheads with the rulers of network services underworld.  Those providing content want to make sure that their sites are as fast and easy to access as other content providers’ sites – and they want legislation in place to help them.  Network service providers are cautious about having government snooping around and regulating their networks, defending their stance with the old adage “give them a finger and they will take an arm”.

In the US, network service provider, Comcast, recently revealed that it does manage file-sharing traffic on its networks.  Other service providers use the excuse that they are short of bandwidth and therefore limit access to high bandwidth sites.

Locally, net neutrality needs to pushed higher up on the telecoms legislation agenda.  With more competition and an increasing possibility for local loop unbundling, net neutrality will become more of a contentious issue. 

Currently Telkom owns the last mile of network i.e. the connection that runs into the users home or business.  Telkom, therefore, currently calls the shots on how fast or slowly a user can download certain content.  Fortunately, there have been no cases to date of Telkom restricting certain content.  But if other players – especially those who have content interests – start having a say over the local loop, the future seems a bit more unpredictable.

On the plus side, more competition in the local loop means that users can vote with their wallets.  Depending on the sites and services they would like to access, users can decide which network provider meets their requirements.  But the reality is that real local loop unbundling is costly, especially given that SA is so geographically dispersed, and few of the service providers will have pockets deep enough to implement it in a meaningful way.

It would seem that the appropriate way forward is that net neutrality should be lightly regulated.  None of us want a situation where government has a say over what we can or cannot do on the internet, but, if we have the correct policies in place which, for example, prohibit the preferential treatment of upstream traffic, we could ensure equal treatment for all online content providers. 

Regulation discussion

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