The Supreme Court of Appeal in South Africa (SCA) has denied Telkom leave to appeal a ruling that will force it to share its cable ducts with competing fibre network operators.
This is great news for South African fixed line broadband subscribers, as forcing fibre network operators to share their conduits with one another removes an obstacle to competition.
It is typical to see only one fibre network operator serving a neighbourhood, estate, or apartment block because of how costly it is to dig trenches, place ducts, and roll out supporting network equipment in the area.
Forcing competitors to share conduits and other infrastructure on commercially agreeable terms removes one of these costly, labour intensive, and time-consuming obstacles.
The battle over the Facilities Leasing Regulations of the Independent Communications Authority of South Africa (ICASA) dates back to 2015, when the Homeowners’ Associations of 15 private residential estates in the Western Cape invited Vodacom to install fibre in their complexes.
Telkom already had underground conduits in these estates, which it had installed to roll out telephone lines and offer ADSL services.
Vodacom asked Telkom for permission to use its ducts, but Telkom declined claiming that it was not obliged to share its infrastructure.
Vodacom installed fibre in these ducts anyway, leading to protracted legal battles that have reached the Supreme Court of Appeal at least twice.
Before reaching court, Vodacom filed a complaint with the Independent Communications Authority of South Africa (ICASA) regarding Telkom’s unwillingness to enter into a Facilities Leasing agreement.
ICASA investigated Vodacom’s complaint and ultimately determined that the sharing of duct infrastructure in these estates was “technically and economically feasible”, and “promoted the efficient use of networks and services.”
Round one – Dennegeur
Telkom has fought the issue of facilities leasing in court for years, initially winning a case against Vodacom in 2017.
Describing it as a “landmark” victory at the time, Telkom had brought an urgent application against Vodacom for the alleged unlawful use of Telkom infrastructure in the Dennegeur residential estate.
Vodacom got the Western Cape High Court ruling overturned on appeal to the Supreme Court.
The SCA ruled that Telkom did not possess the infrastructure or cables which formed part of Dennegeur, but that it was owned, occupied, and controlled by the Home Owners Association.
“[Telkom’s] rights are derived from the provisions of Section 22 of the Electronic Communications Act. The rights conferred are in their nature servitutal,” the court ruled.
The SCA stated that Telkom exercised its rights to the extent that “it laid down copper cables in the ducts, sleeves, and manholes”.
In its appeal, Telkom alleged that Vodacom committed an act of spoliation by using its conduits, but the SCA ruled against Telkom.
“Vodacom’s optic fibre network did, however, not disturb Telkom’s use of the ducts and did not prevent Telkom’s operation of its network,” said the court.
According to the SCA, Telkom did not possess the vacant space in the ducts and sleeves which was subsequently occupied by Vodacom, and Vodacom’s conduct was “therefore not an act of spoliation”.
Round two – Telkom vs. Vodacom and ICASA
Rather than accept defeat, Telkom elected to challenge the legality of a decision by the Independent Communications Authority of South Africa (ICASA) that it should lease its conduits to Vodacom.
The Pretoria High Court ruled against Telkom, saying that ICASA’s decision was reasonable.
In his judgement, Judge Neil Tuchten said that Section 43 of the Electronic Communications Act makes it mandatory for licensees to lease any electronic communications facilities to others who qualify, provided the request is not unreasonable.
Tuchten ruled that Vodacom’s request had to be reasonable because Telkom itself said it wanted to use the available space to install its own fibre cables.
“To my mind, once Telkom asserts that it wants to lay cabling where Vodacom wants to lay cabling, it admits, by implication, that what Vodacom wants to do is both technically and economically feasible and would promote the efficient use of networks and services,” said Tuchten.
“How can you argue that what your competitor wants to do is not technically and economically feasible and contributes to the efficient use of networks and services when you are planning to do the very same thing?”
Following its loss in the High Court (with costs), Telkom filed an application for leave to appeal which was dismissed with costs. Telkom then petitioned the Supreme Court for leave to appeal.
In its order, the SCA dismissed Telkom’s application for leave to appeal with costs on the grounds that there are no reasonable prospects of success in an appeal and there is no other compelling reason why an appeal should be heard.
ICASA welcomed the SCA ruling against Telkom, saying that leasing of facilities within the telecommunications sector is common around the world.
“We encourage our licensees — in this case Telkom to accept regulatory measures put in place for the benefit of consumers and the public at large,” said ICASA chairperson Keabetswe Modimoeng.
MyBroadband contacted Telkom for comment, but the company did not respond by the time of publication.