Do people have a right to broadband?
Many people commenting on this website leave the impression that access to broadband must be free! The reason: it drives the economy. Is that the real motivation? Or a good reason for gaming and downloading music and movies free of charge?
The question remains: are expectations of free or very low access cost to broadband realistic? Last year I had the opportunity to discuss the question of broadband entitlement with one of the world’s foremost communication lawyers Ms Judith O’Niell of Greenberg Traurig, New York.
She said that from a legal perspective the right to broadband will only exist if there is a law in the country that requires broadband access to be provided under what ever condition seems to be reasonable.
It is however not economical for any country to provide such a free service and in most countries including South Africa it would violate constitutional principles to make a law forcing a company to do so. Judith said it is like people being told by government to drive their neighbour to work every day at what ever price they regulate.
So our expectations that ICASA must grow and flex its muscle to regulate for low cost access to broadband are unrealistic. It will have to be competitive forces that must drive this. To some extend this is happening, but may be not aggressive enough. With Neotel having acquired access to the submarine cable system carrying most internet traffic to and from South Africa we may see this speeding up.
To come back to entitlement, the USA tried to regulate the price at which defacto monopolies could charge for broadband. Government created what industry believed was a hypothetical formula for calculating the cost of providing broadband. It is known as TELRIC – Total Element Long-Run Incremental Cost.
This forced the defacto monopolies to open access to their infrastructure by their competitors at prices lower than the cost to build and maintain it. The result was that companies complied but stopped any further investment in broadband access. It was no longer good business!
Within two years the USA dropped behind in broadband access availability as compared with Canada, Korea, Finland and many EU countries. It embarrassed the US government but repealing the law was not an option for President Bush. The only way out was to drop the references to Broadband in the TELRIC order and this was done.
With price control ruling the supply of broadband out of the way, healthy competitive conditions returned and investment in broadband took off.
Price regulation seldom achieves the desired effect of making something more affordable. Competition coupled with volume growth will.
Is it healthy for industry growth to prescribe how business needs to be conducted? We constantly cry for less regulation yet when it comes to broadband we want stricter regulation. We want the regulator to tell Telkom and now others how to do business! It does not make sense.
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