ISPA: ‘Regulate to ensure competition’
Ant Brooks, who spoke on behalf of ISPA, said that the current regulations focus on the current model where Telkom provides all the aspects of an ADSL service.
Brooks stated that: “ISPA’s concern is that the draft regulations assume the current market structure favouring Telkom will always exist. We’re also concerned that the draft regulations might accidentally result in reduced competition and less consumer choice.”
Brooks pointed out that there are two further models, one based on the IPConnect service and another where there is improved access to ADSL facilities, which may be damaged by the current proposed regulations.
ISPA also felt that it should not be necessary to purchase a voice service from Telkom to get ADSL. ISPA, like Internet Solutions and MWeb, also pointed to the restrictive pricing of IPConnect which essentially makes competition impossible.
In an interesting criticism of Telkom’s 24 hour ADSL IP reset policy, Brooks said that the default setup for the system that Telkom is using does not require this reset. Brooks then asked the question as to why Telkom decided to adjust the system to allow for regular resetting.
MWeb were also against the 24 hour reset as they argued that it inhibits the building of hosting and other services on an ADSL line, which is a revenue protection strategy from Telkom. It may well be true that Telkom is protecting their leased line service market through this decision.
ISPA further felt that there may be problems with Telkom acting as a wholesaler and a retailer in the ADSL market with possible market squeeze. ISPA pointed to the BT example where the retail and wholesale divisions were split to avoid undue allegations of anti-competitive behavior.
“Telkom has an undue level of control of the ADSL market which it leverages against the interests of competing service providers and consumers,” said Brooks. He added that Telkom’s ability to compete in both the retail and wholesale market and the fact that there is no transparency between the wholesale and retail ADSL divisions of Telkom can make things very difficult for competing ISP’s.
The current situation along with the lack of transparency from Telkom has drawn great criticism from the ISP market, with suspicions of anti-competitive and margin squeeze behaviour.
ISPA’s stance is that the draft regulations should promote fair competition in the ADSL market, encourage consumer choice and aim for limited technology restrictions.
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