Has ICASA grown a spine?

The Independent Communications Authority of South Africa (ICASA) has long been accused of being toothless, but recent activity at the regulator suggests that it isn’t all bark and no bite.

TopTV was bitten by ICASA this year (2012) when it shut down the broadcaster’s plans to launch porn channels in South Africa. In its explanation for denying TopTV’s application, ICASA said: “TopTV’s failure to take ICASA’s public consultation process seriously fatally damaged its application”.

Although not as widely welcomed as some of the Authority’s other regulatory interventions, ICASA made it apparent that it wasn’t to be trifled with.

Most recently the regulator lowered the prices of Telkom’s wholesale ADSL product, known as IPConnect (IPC), by 30%, causing internet service providers to increase data caps and decrease the prices of their uncapped products.

ICASA also bared its teeth through councillor William Stucke at the local loop unbundling (LLU) hearings it hosted last year, and at the workshop it hosted for its new Administrative Incentive Pricing scheme for frequency spectrum held earlier this year (March 2012).

Is this real change we’re seeing at ICASA, or is it all show? Does it matter if it is?

Arthur Goldstuck
Arthur Goldstuck - World Wide Worx

“If Icasa has grown teeth, they’re still baby teeth, as it appears the regulator is only just beginning to digest the regulatory meals it was expected to tuck into years ago,” said Arthur Goldstuck, MD of South African research firm World Wide Worx.

“But we can be grateful that the teeth are beginning to appear,” Goldstuck said.

Asked whether the various price cuts announced by ICASA have been good for the industry, Goldstuck said that we have not seen any impact from the drop in the interconnect fee because ICASA did not require pricing transparency from networks.

ICASA instituted a drop in the costs for operators to terminate a call on each other’s network, but mobile network operators such as Vodacom, MTN, and Cell C have argued that interconnect cuts actually cost them money, meaning they can’t cut prices.

“We’ve long argued that, without transparent price structures, there cannot be transparent price cuts,” Goldstuck said. “However, because the pricing of IPC is far more visible, if only to service providers who pass on the costs, the cut in this price is likely to result in cheaper broadband, and is a very welcome development.”

Dominic Cull
Dominic Cull

Dominic Cull from Ellipsis Regulatory Solutions said it doesn’t matter whether ICASA’s newfound regulatory efficiency is all show or not, the bottom-line is that progress is being made.

“It’s naive to expect people not to be disaffected with the performance of ICASA,” Cull said. “But there are pockets of excellence within the regulator.”

Derek Hershaw
Derek Hershaw - MWEB ISP MD

According to MWEB ISP boss Derek Hershaw, ICASA’s teeth are not all show.

“The cuts in interconnect rates and IPC are very real and they absolutely do matter,” Hershaw said. “It’s disappointing for the consumer that the reduced interconnect rates have not translated into immediate savings at a retail level, the cost of telephony is just too high in SA.”

However, if the reduced mobile termination rates foster increased competition in the long term then Hershaw said he believes it is obviously a good thing.

“I’m certainly encouraged by recent events at ICASA, if they can continue to deliver on the commitments they have made (IP Bitstream by November 2012 stands out as a significant date on our calendar) then it bodes well for the industry,” Hershaw said.

Rupert Bryant
Rupert Bryant

Specifically addressing ICASA’s regulation in the ADSL space, WebAfrica’s chief operating officer, Rupert Bryant, said: “ICASA seems to have come to the party on this one, so kudos to them and Telkom for working together.”

Bryant said that ICASA still has a long road ahead and hoped that the regulator would “keep this up”.

The reduction in IPC costs have been good for the industry, Bryant said.

“In addition with the added capacity, consumers can expect less contention and better QoS (quality of service) on ADSL in South Africa – which is desperately needed,” Bryant concluded.

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Has ICASA grown a spine?