UNSATISFACTORY, BROADLY SPEAKING
The regulations are designed to reduce the cost of Telkom’s high-speed asymmetric digital subscriber line (ADSL) products, which are capable of carrying voice, video and data. In a rare show of unity, Telkom and Internet service providers (ISPs) have roundly criticised Icasa’s proposed regulations.
In a written submission to Icasa, Telkom says Icasa’s proposals are ultra vires (beyond its powers) and inapplicable. In turn, the ISP Association (Ispa), which represents most of SA’s ISPs, agrees that the draft regulations are poor. They are "extremely broken, lacking in both technical and financial practicality", Ispa joint chairman Greg Massel told the FM in December.
In essence, the regulations demand that fixed-line operators:
Scrap broadband line rentals;
Allow a minimum monthly bandwidth cap of 10 GB;
Allow customers to change the terms and conditions of existing contracts;
Provide a service within 14 days, in all circumstances; and
Guarantee minimum throughput speeds.
Telkom says it is inappropriate that Icasa adopt an "uneven and fragmented approach" to broadband services by focusing only on ADSL. It says the authority is ignoring its wireless rivals MTN, Vodacom, Cell C, Sentech and Wireless Business Solutions.
Also, technology-specific regulations have the potential to discriminate against different operators and give some of them an unfair advantage, Telkom warns.
The fixed-line operator says the regulations, if promulgated, will not only disadvantage it but will also handicap the second network operator, SNO Telecommunications.
Telkom also notes that Icasa is already regulating ADSL prices through the same price control regulations that Icasa uses to keep the prices of other products in check. The company says it filed tariffs in terms of these regulations on July 21 and these were approved by Icasa on September 6. Not only has the structure of its ADSL charges been approved by Icasa, but also the tariffs. "The draft [ADSL] regulations are clearly in conflict with the price control regulations, which render them impossible to apply," Telkom says in its submission.
The price control regulations are set for a fixed period and are not meant to be amended before July 2007. Premature amendments will be inappropriate and will create regulatory uncertainty, Telkom warns.
The prescriptive nature of the regulations will also make the broadband offerings provided by network operators and service providers bland, as it will not leave much scope for them to differentiate between their products.
The detailed nature of Icasa’s proposals are also worrying Telkom. It says it is inappropriate for the authority to set out in such "narrow detail" how service providers should operate.
Icasa’s proposal that Telkom and SNO Telecommunications not be allowed to charge monthly service fees is also a big concern that Telkom raises in its submission. It says this would amount to "expropriation without compensation" as it would mean Telkom would not be able to recover the cost of its investing in broadband infrastructure.
Telkom says that in most countries an installation fee and a monthly service fee is charged for the provision of ADSL, which includes the access portion and the Internet portion provided by ISPs.
It would be illegal to stipulate that the regulations be applied retrospectively to customer contracts. Telkom says this is unconstitutional because it "infringes on contract law and Telkom’s freedom to contract".
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