Get on with it
The high cost of communicating in SA is one of the factors that prevents businesses being as competitive as they should be.
It also contributes to a population that is a lot less internet-connected than it should be. And the cost factor, combined with outmoded and flawed regulation, has tended to hold back competition and innovation in technology and communications sectors more generally.
But rescue is supposed to be at hand in the form of the new Electronic Communications Act, which started life as the long-debated Convergence Bill. The act, which aims to introduce a common, technologically neutral platform for a converged ICT industry, is now on the statute books. In theory it is designed to open up the sector to greater competition and innovation. Even before it’s been promulgated though, there are calls for it to be amended on the grounds that it trumps SA’s competition legislation, making it unlikely that it will ever open the way for Telkom’s market dominance to be challenged.
The old telecommunications legislation had a whole section empowering the regulator, the Independent Communications Authority (Icasa), to adjudicate competition matters in the sector. That meant, for example, that when a group of internet service providers successfully challenged Telkom’s anticompetitive conduct at the competition commission, which recommended a huge fine, Telkom responded by challenging the commission’s jurisdiction in court.
Until the jurisdictional tension is resolved, any other competition cases against Telkom will probably go the same litigious way. In theory, SA’s competition authorities have equal or concurrent power to regulate competition in the sector with Icasa. But in practice the issue is unresolved, creating the space for players to shop around for the more lenient regulator.
And the new act doesn’t do much to resolve that tension, because it retains the competition section of the old telecoms legislation. The competition commission’s Fungai Sibanda argues that that would take competition regulation in the sector a step backwards. It could lead to “forum shopping”, as Telkom played off one agency against the other and raised the possibility of friction between the competition authorities and Icasa.
The issue was raised, and at length, in parliamentary hearings on the new legislation last year, where the commission and several industry players questioned whether the draft bill would in fact make it easier to curb Telkom’s dominance and open up the sector. Clearly there is plenty of politics involved. It may well be the case that the communications ministry did not want to give the independent minded competition authorities too much power to intervene in the sector. And though government may want less regulation and more competition, as a shareholder in Telkom (and also in the second network operator) it has conflicting interests.
At this stage there’s not much point in more quibbling over the legislation. The new act may not be ideal, but it does provide a framework that can allow more competition and innovation, if it’s intelligently implemented. Ideally, regulation will be kept to a minimum and market forces will be allowed to prevail, and to discipline Telkom, where possible. For that to happen, Icasa and the competition authorities must find ways to co-operate such that market players cannot trade them off against each other.
SA needs a vibrant communications sector. Whatever the law says, it’s now up to the regulators to work to achieve that objective.
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