New broadband rules won’t help pricing
Reed is referring to the regulations released by the Independent Communications Authority of SA (Icasa) to govern Telkom’s high-speed asymmetric digital subscriber line (ADSL) service.
The regulations are designed to reduce the cost of high-speed lines, which are capable of carrying broadband services – voice, video and data over a single line – but have met with sharp criticism from end users and service providers.
Telkom was the only operator allowed to provide ADSL lines until the licensing of SNO Telecom last year. Many therefore expected the regulations would squeeze down the prices of the company that had had a monopoly on the service.
Reed says there is still a need for regulating the service, given Telkom’s dominance. But as they stand, the regulations will make little difference. "There is nothing in the regulations that Telkom does not do already," he says.
The regulations do not tackle pricing directly and say nothing about wholesale pricing for companies dependent on it, such as DataPro and SNO Telecom. The regulations do, however, demand that Telkom, SNO Telecom and service providers enter into agreements with subscribers to deal with complaints, resolve disputes and agree on turnaround time in dealing with repairs.
Reed says the regulations would have been fine two years ago, when ADSL in SA was in its infancy, but the market has changed a lot since then.
SNO Telecom says it wants regulations that look specifically at the wholesale provision of Telkom facilities, including ADSL. The newcomer is in a difficult position. It has to depend on a rival’s infrastructure while it is setting up its own ADSL network.
It says regulation in this area should ensure that the cost structure for operators like itself would be reduced and thereby "ensure a level playing field and increased competition [leading to] customer-friendly services and pricing".
The SNO operator also feels Icasa could base its regulations on services rather than technology – for example, wholesale high-speed Internet regulations in place of technology-specific regulations for ADSL products.
Reed does not see the regulations process as a complete failure: people complained about the service, Icasa heard and decided to probe the complaints and to draw up regulations to manage them. SNO Telecom also likes some of the regulations. The lifting of caps – restrictions on how much users can download – is a good move as the growth in bandwidth makes such limitations redundant.
SNO Telecom welcomes the setting of a common definition of broadband because it eliminates confusion. It says the definition of a minimum download speed is a step in the right direction.
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