Interconnect rate cuts by June 2010?
Last Friday the Independent Communications Authority of SA (ICASA) announced that an industry-led process to cut interconnect rates has broken down. ICASA lashed out at the mobile operators for not being able to reach an agreement, but ICASA itself came under fire for initiating a process which was unlikely to reach any satisfactory conclusion.
The Competition Commission questioned ICASA’s decision of putting the ‘operators in a room’ and letting them decide on interconnect rates, saying that this can only lead to collusion. The Competition Commission’s Shan Ramburuth said that ICASA should also ensure these rates were set on a defensible basis, and that, “We shouldn’t be guessing these figures.” Communications Minister Siphiwe Nyanda also slated ICASA for “veering from its mandate to regulate and had no business in politics and in trying to persuade (the operators) to do anything”.
Despite the lack of an immediate industry-led solution, ICASA said that it will continue with its regulatory processes of developing a framework for competition and cost-based pricing in the voice market as set out in Chapter 10 of the Electronic Communications Act (ECA).
In mid-October the Minister of Communications Siphiwe Nyanda issued a policy direction on Mobile Termination Rates, calling in ICASA to prescribe mobile termination rate regulations which will lower the interconnection rates, specifically the mobile termination rate, to a cost-based rate. This will assist ICASA in speeding up the regulatory process to cut interconnect rates.
ICASA today announced that it plans to have draft regulations ready by the end of March, and that the final wholesale termination rate regulations will be completed by June 2010. The regulator previously said that it is “convinced that the conclusion of its regulatory work, as outlined in the law, remains the most optimal way to the resolution of these matters. This process will also be concluded by end of this financial year (31 March 2010).”
Can a leopard change its spots?
One of the concerns from consumers is whether ICASA, an organization well known for its incompetence, will be able to successfully conclude the processes needed to force the cellular operators to cut their interconnect rates in a timely manner. The regulator has come under fire from various quarters, including parliament, for its poor track record, and recent events do instill much trust in the communications authority.
ICASA illustrated its continued ineptitude this morning when journalists and other role-players arrived for a much anticipated press briefing on wholesale termination rates, but were duly informed that the event will not take place at 10:00 as planned. When quizzed as to why people were not informed about this change of events, ICASA’s communications liaison said that their mail server has been down for around a week.
What is of particular concern is that ICASA does not seem to view the prolonged email downtime as a hurdle to overcome to create a more effective working environment, but rather as a ‘trump card’ excuse when confronted about a lack of communication from their side. This lack of urgency seems to be entrenched in ICASA, but it will have to be addressed if the regulator is keen to shrug off its image of being incompetent and toothless.
Parliament’s Portfolio Committee on Communications shared concerns that ICASA will not deliver on its promise to reduce interconnect rates in the time frames it specified. One committee member asked ICASA if the responsible regulatory employees will resign if they fail to successfully address the issue. Strict timelines were requested to ensure that the regulator can be held accountable for any failures.
ICASA & Interconnect rates – discussion
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