Telkom, ISPs and uncapped ADSL bandwidth

The ICASA ADSL Regulations, which were released last year, state that “Local bandwidth usage shall not be subject to the cap.”

While optimistic consumers were looking forward to free, uncapped local bandwidth – similar to pre-November 2005 – Telkom said that they plan to offer uncapped local bandwidth, but that subscribers will have to pay for usage after being capped.

This announcement has been met with fierce criticism from many consumers.

Unfortunately since the ADSL Regulations do not explicitly state that local bandwidth should be free it left the ‘uncapped but paid for’ loophole open and presented an easy argument for any lawyer to win.

SAIX wholesale offering

Telkom recently informed all reseller ISPs that they have developed a product which will assist ISPs to comply with the ‘uncapped local bandwidth’ regulation.

“It is recommended that service providers allow local only access to continue even after the blended CAP was consumed by the customer. It is the most cost effective solution from both a customer and service provider’s perspective. Local access to content can therefore be ensured even after the blended CAP was reached; therefore local usage will no longer subject to the CAP,” Telkom informed ISPs.

This product essentially makes provision for users to be capped on international bandwidth after reaching their monthly usage limit but still have paid-for local access after this intervention.

The new system however raises many questions, including whether users will be happy to pay additional charges for local bandwidth after being capped, how to seamlessly implement a more complicated billing procedure and uncertainty as to the total monthly cost of an ADSL subscription.

While informed users will know what this new service entails, the vast majority of subscribers may find the proposed system confusing and costly.

ISPs are understandably hesitant to employ the new system for fear of user dissatisfaction, billing complications and increased helpdesk support loads.

ISP feedback

ISPs are justifiably not overly positive about Telkom's new system.

“It is feasible, but I'm not completely convinced that it is practical, for both economic and logistical reasons. While Imaginet has a system capable of dealing with switching a customer to uncapped local-only bandwidth at some arbitrary point in their usage, I suspect that many other ISPs do not,” said Darren Miller, MD of Imaginet.

“I feel for the ISPs who may be required to provide "uncapped" local and who do not possess a system capable of it at present – it will be expensive and require a long time for development. It is unreasonable of ICASA to expect ISPs to bear this expense, even if their customers don't want uncapped local.”

Richard Smuts, the ADSL product manager at WebAfrica, also expressed his doubts about the feasibility of the proposed changes.

“Telkom’s pricing structure makes it unfeasible to provide any form of unlimited service. We have been providing uncapped solutions – according to Telkom’s interpretation – for at least 2 years. This naturally doesn’t fall into what ‘we’ consider uncapped to mean (fixed-rate, unlimited), but if we do not follow Telkom’s interpretation at this time we risk going out of business because we would not be able to afford the ADSL fee from SAIX (non-fixed, unlimited),” said Smuts.

“Telkom has now taken their own interpretation, ignoring the spirit of the law, and has produced a solution that will – if followed – merely serve to increase prices for consumers, placing the burden cost-wise on the ISP’s who they sell wholesale to, while eliminating any risk to themselves” Smuts said.

“We have a product that is available at the moment, but we haven't launched it because we are struggling to find an easy way to support it,” said Cybersmart MD Laurie Fialkov.

“We feel that this type of product is going to generate a huge amount of support calls. How for instance do you explain to the average user that he can't get to the "local website" www.google.co.za when his cap is exhausted?” asks Fialkov.

“I don't think a product with free local bandwidth will be launched in the foreseeable future. This is not only a function of Telkom, but a function of being able to peer with other providers for free. For us to be able to provide free local bandwidth, it is imperative that we can peer for free with IS and Verizon as well as Telkom,” Fialkov points out.

Marius Oberholzer, MD of SAINET, says that they are not planning to launch the new SAIX uncapped local bandwidth service anytime soon. “According to usage patterns, users always need a mix of local and international at all times (apps like Skype etc), providing local only access will result in bad user experiences and frustrations,” said Oberholzer.

“I am of the opinion that we’re trying to counteract expensive international bandwidth by toying with local bandwidth access. I believe if the price of international bandwidth comes down, the end user will be satisfied to pay reasonable prices on a usage based model.”

ICASA under fire

ICASA has been berated from all sides, both consumers and industry stakeholders, for the poorly written ADSL Regulations.  Many ISPs expressed the opinion that the regulator could have done a far better job.

“…the ICASA ADSL regulations are poorly written and ambiguous. I can't even bring myself to say that ICASA's intentions were good. It seems clear that ICASA never even made the effort to understand ADSL before responding with a set of regulations so critical to the well-being of the South African internet, the telecommunications industry, and internet users,” said Imaginet’s Miller.

“The only remedy for this entire situation is for ICASA to toss the existing ADSL Regulations in the dustbin and start from scratch,” Miller concludes.

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Telkom, ISPs and uncapped ADSL bandwidth