Big bang regulations promised by ICASA

The Independent Communications Authority of South Africa (ICASA) yesterday announced its plans to cut mobile termination rates, and at the same time tackle Local Loop Unbundling (LLU), develop generic interconnection regulations which will apply to all operators and publish carrier pre-selection regulations.

“Chapter 10 of the Electronic Communications Act No. 36 of 2005 empowers ICASA to impose pro-competitive remedies on identified licensees who have significant market power (SMP) or are dominant and operating in markets that are not competitive,” ICASA said in a press statement.

According to ICASA there are several retail and wholesale markets in the electronic communications industry that need to be studied and reviewed with the aim of determining their level of competitiveness. A market that has, in recent months, fallen under the spotlight of both the media and the general public is the Call Termination Market (Interconnection Rates).

Progress from ICASA

ICASA began the process of addressing Wholesale Call Termination, Line Access and Leased Lines, in terms of the ECA and the ICASA Acts, in 2007. Accoring to the regulator it has been and will continue to adhere to the following steps:

  1. Identify and define relevant markets
  2. Identify licensees with Significant Market Power (SMP)
  3. Assess competitiveness in these markets and
  4. Impose pro-competitive remedies

In 2007, ICASA issued a findings document, following a public consultation process, regarding the regulation of Call Termination (Interconnection Rates) which was identified as one of the priority markets to be subjected to pro-competitive regulation.

The findings document concluded that all operators, regardless of their scales of operation, were significant players in their respective call termination markets. However, the findings document did not assess the competitiveness of these markets.  “The assessment of competitiveness and the imposition of pro-competitive regulatory framework would then constitute the second phase of the process,” ICASA said.

According to ICASA it has already begun the second phase process of assessing competitiveness in the Call Termination Market and will develop regulations to impose pro-competitive remedies in the individual markets with significant market power and which are characterized by a lack of competition.

ICASA said that it estimates that the process will be finalised by June 2010.

In addition to the abovementioned markets ICASA has also undertaken the following competition related regulatory projects:

  1. Generic Interconnection regulations which will apply to all operators;
  2. Carrier Pre-selection regulations which will be concluded before the end of the current financial year;
  3. Concluded research on the Unbundling of the Local Loop or the Last Mile;
  4. Monitoring of the implementation of regulations on mobile number portability with a view to improve their effectiveness;
  5. Wholesale Competition Framework for Broadcasting to promote competition in both content and transmission services.

While these interventions may create a more competitive and consumer-friendly telecoms environment, consumers are not particularly confident that ICASA will fulfill its promises.  In a recent poll less than 10% of voters felt that ICASA will meet deadlines to ensure a speedy reduction in interconnect rates.

Parliament shared this skepticism, and at a recent Portfolio Committee on Communications meeting ICASA councilors were asked if the responsible regulatory employees will resign if they fail to successfully address the issue.  Strict timelines were also requested from ICASA to ensure that the regulator can be held accountable for any failures.

ICASA & telecoms regulation – discussion

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Big bang regulations promised by ICASA