ICASA BACKS DOWN ON REGULATIONS

ISPs will also not be required to sell 30% of their equity by September,
as previously envisaged. It’s understood reliably that this date has
been moved to 2008 to bring it more in line with the targets set in the
information & communications technology industry charter. This charter
requires companies to sell 30% of their equity to black investors by
2010.

Icasa apparently still wants the Vans regulations to be stricter than
the equity requirements set out in the charter because it would like to
encourage more black businesses to win the IT and telecom contracts that
are likely to flow ahead of the 2010 soccer World Cup.

The changes follow a "clarification" by communications minister Ivy
Matsepe-Casaburri at the end of last month. She said that, contrary to
Icasa’s interpretation of the determination of dates for further
liberalisation of the market made by the minister last September, ISPs
would not be allowed to build their own telecom networks independent of
Telkom and the second network operator. "It is not government’s
intention to license every single activity that can be provided by a
Vans operator. This would lead to an absurd result," she said.

Some ISPs have questioned whether Matsepe-Casaburri’s clarification has
any force in law, given that, unlike last year’s determination of dates,
it wasn’t made within the context of the Telecommunications Act.

Specialist telecom lawyer Lisa Thornton, who provides legal services to
a number of ISPs, agrees. "It [Matsepe-Casaburri’s clarification] has no
force in law," she says. "It is ultimately the courts that must
determine what the legal effect is of her announcement last September."

Thornton advises ISPs wanting to build their own networks to seek legal
opinion first so they can gauge the risks involved in doing this. "It is
my legal opinion that self-provision is allowed."

Icasa, which has already said that ISPs will be able to build their own
networks, could choose to challenge Matsepe-Casaburri by including these
rights in the new regulations. However, the regulations must be approved
by the minister and some in the industry believe this requirement
undermines the regulator’s independence.