Telecommunications border patrol
The Electronic Communications Act, which was recently signed into law, is supposed to herald a new era of openness in the telecom industry. But there are concerns that in granting Icasa powers to decide on competition issues, there could be renewed tensions between it, the competition commission and the competition tribunal.
The commission plays the role of an investigator for the tribunal, which has the final say on competition issues in all sectors of the economy. But under the Electronic Communications Act, this changes. SA will soon have a system where both the specialist communications regulator and the generalist competition regulator have jurisdiction over competition matters, says telecom lawyer Lisa Thornton.
This is problematic. Granting Icasa the authority to decide on competition-related matters may lead to companies "forum-shopping" – going from one regulator to another to get a decision that suits them, Thornton says. Companies may also try to delay change by claiming one regulator has authority over them, and not the other, she warns.
Acting competition commissioner Shan Ramburuth plays down the idea that the competition authorities and Icasa are going to fight over jurisdiction of the sector. He says the two parties are committed to working with one another and says there is already an agreement in place to help govern the relationship.
Ramburuth says, however, that the agreement between Icasa and the commission will have to be redrafted to bring it in line with the new legislation.
The two regulators may be holding hands in public. Behind the scenes, though, the competition commission has objected strenuously to Icasa having the power to decide competition issues.
The commission argued that "in dealing with investigations into anticompetitive conduct in the sector, it is our view that there is no need for the duplication of roles".
Its argument did not prevail and the Electronic Communications Act gives Icasa the right to impose "procompetitive conditions" on operators that have "significant market power" .
Giving Icasa these powers, however, could simply result in telecom operators tying it up in court – as they have done in other instances where they have taken issue with decisions of authority. The competition authorities, on the other hand, have a well-defined process for managing disputes. The Competition Act provides a clear framework for dealing with appeals against decisions made by the competition tribunal.
Ramburuth says telecom operators have a habit of using litigation to stall regulatory action against them and he expects them to continue to question its authority – they would have resorted to the courts to fight Icasa, even if the new act had not given the authority the power to decide competition issues.
Previously, fixed-line operator Telkom has taken advantage of perceived jurisdictional overlap to dodge the competition authorities. It has argued in the past that the commission has no authority over it.
In December 2004, the commission recommended to the tribunal that Telkom be fined 10% of its annual revenue, or R3,76bn (at the time), following a complaint by the SA Vans Association (Sava), an umbrella body of companies that includes Internet service providers (ISP). Sava had accused Telkom of charging higher prices to its members than it levied on its own ISP. This, Sava said, constituted unlawful cross-subsidisation. But Telkom argued that as it operated in a regulated industry, the competition authorities had no say over it, and took the matter to the high court, where it has been held up.
Telkom continues to claim that the commission does not have jurisdiction over it, despite the agreement between Icasa and the commission that gives the latter authority on competition matters.
Ramburuth warns that, just because Icasa will have powers to decide on competition issues, this does not mean that the commission will sit idly by when it comes to the telecom sector. "By law we are obliged to look at every single compl aint," Ramburuth says.
There is no foundation to Telkom’s argument that because it operates in a regulated market, the competition authorities have no jurisdiction over it, he says. The Competition Act, which gives the competition authorities their powers, applies to the entire economy, he says.
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