A FEW WEEKS AGO, at a presentation organised by the Wits LINK Centre on South Africa’s technology readiness for 2010, Icasa councillor Tracy Cohen – who was in the audience along with chair Paris Mashile – challenged the media to delve a little deeper into what the regulator was working on before proceeding to criticise.<\/p>\n
That was in response to a presentation by World Wide Worx CEO Arthur Goldstuck, who said afterwards that he’d actually been criticising the Department of Communications (DoC) but that Icasa had perceived it was under fire.<\/p>\n
Nonetheless, Icasa is often accused of being slow in its decision-making and seemingly inept and is perceived to be significantly lacking in resources. So Finweek took Cohen up on the challenge and sat down separately with both herself and Mashile to discover Icasa’s version of the truth.<\/p>\n
Mashile says although Icasa still has a very long way to go in terms of being an efficient and effective regulator operating in a more normalised – in other words, competitive – environment “we’ve turned the corner”.<\/p>\n
The ideal for a regulator in any market would be to be able to operate as overseer or facilitator. However, in a market with dominant players and limited competition it must play a far more proactive role, trying to limit the powers of some and enable competitive forces to kick in. That’s what it’s now trying to do in terms of implementing SA’s Electronic Communications Act.<\/p>\n
For Icasa, the Act represents a new phase, giving it a focus with specific goals and timeframes. Once implemented, its job should get easier. But Mashile is loath to predict how many years it will take before Icasa can take the boxing gloves off and call itself a pure enabler (such as the Federal Communications Commission in the US and Ofcom in Britain arguably are).<\/p>\n
One key step is the conversion of all existing licences into the new categories under the Act. Major players with significant rights and obligations – such as the right to build their own networks but the obligation to fulfil universal service targets – will become “individual licence” holders in various categories. Smaller players, such as some Internet service providers, will become “class” licensees.<\/p>\n
The latter licence type should be quick and easy to get and not be an administrative burden for Icasa. Adviser to the chair, Edmund Baloyi, says a prospective class licensee should eventually be able to apply online and get a response within 24 hours. “We want to shorten the processes.”<\/p>\n
Asked whether it had now been allocated sufficient cash, Mashile says while it would never have enough money “we’ll do the best with the limited resources available”. Icasa is in the process of reorganising itself to implement the Act and has enlisted the help of outside consultants.<\/p>\n
Cohen says a number of changes had already been made but some were still in progress. So far, it was working well, she says.<\/p>\n
While Mashile is ultimately responsible for all of Icasa’s projects, he chairs a few specific ones. Meanwhile, the eight councillors have been assigned specific areas of responsibility. The full council meets monthly.<\/p>\n
Cohen says while there are challenges at Icasa, the job is an extremely satisfying one involving working with a diverse range of issues. Frustrations include long, drawn out processes with long-term outcomes and companies sometimes using “creative arguments” to delay the implementation of certain regulations.<\/p>\n
Cohen says while there’s still a shortage of professional staff, it continues to address that challenge.<\/p>\n
However, Icasa is still being seen as an industry training ground, with continued poaching. Cohen says that’s almost acceptable when the industry needs the skills, but in some cases the industry’s behaviour – in poaching people merely to remove them from the regulator – is self-defeating.<\/p>\n
Icasa sees the recent successful appointment of CEO Karabo Motlana as a small victory in being able to attract a skilled individual from the private sector. Motlana, an attorney, is the former head of regulatory at Cell C and headed telecoms policy and licensing at Telkom’s regulatory division before that.<\/p>\n
Icasa is still missing one more councillor after the resignation of Mamodupi Mohlala earlier this year. The process of finding a replacement is currently with Parliament.<\/p>\n
But why, if Icasa has the necessary resources to do the job – even if only just – do things seem to take so long? As a body, Icasa is mandated to implement the legislative and policy decisions of the DoC. The processes that it must follow are set down in law. Some criticise those as being too drawn out.<\/p>\n
But (even if that were up to Icasa) Cohen disagrees. She says consultation “is essential” and while discussion documents are lengthy, that’s often the best way for it to extract information from a sector that tends to be less than forthcoming on detail. Some processes inevitably get delayed when one runs into another and the operators complain their regulatory departments can’t handle the load.<\/p>\n
Cohen says while there’s a general shortage of skills in the sector, the operators have resources of magnitudes significantly greater than Icasa, so that argument is difficult to swallow.<\/p>\n
Cohen is herself responsible for the markets and competition division, along with fellow councillor Robert Nkuna. A key part of that portfolio is developing detailed market definitions to ensure that any regulation is “narrowly and appropriately directed”. That also involves a complex analysis to determine which players are dominant – have significant market power – and assess the effectiveness of competition in these markets. Only then can price caps and other pro-competitive “remedies” be imposed in a given market, if necessary.<\/p>\n
The first and possibly most contentious of those market definitions – concerning wholesale call termination – is due to be completed in November. There are around 30 markets, most of which will be defined by April 2008. But Cohen says it’s an ongoing process to refine definitions, as technology and markets evolve over time (the law requires Icasa to review its definitions periodically). As resistance is expected, Icasa is endeavouring to define markets in a way that would be least open to possible challenge from incumbents, she says.<\/p>\n
But while the Act is seen as a highly positive piece of legislation that should significantly open the market, Cohen said Chapter 10 is extremely difficult to implement speedily to ensure effective regulation of competition. Icasa has told the DoC informally that it would like to see that simplified.<\/p>\n
Another of the highly anticipated regulatory matters is that of spectrum allocation: companies hoping to use technologies such as WiMax to build wireless networks.<\/p>\n
Mashile says only those operators that qualify for “individual” electronic communications network licences will be able to apply – but not necessarily qualify – for spectrum. That will include current infrastructure-related licensees (Telkom, Neotel, Vodacom, Sentech, MTN, Cell C, iBurst), as well as some VANS operators – seven, at most, in terms of guidelines from the Minister.<\/p>\n
Mashile says Icasa is in the process of deciding how to allocate that scarce resource, having already undertaken a public consultation process.<\/p>\n
In the 3,5GHz range, there is 60Mhz available and in the 2,6GHz range there is 126Mhz of spectrum available, he says.<\/p>\n
The migration from analogue to digital television would also free additional spectrum, says Mashile, while new technologies are constantly being developed that could enable companies to make use of spectrum in additional bands.<\/p>\n
In determining how to allocate the available spectrum, Icasa would consider the financial and technical expertise of the applicants, as well as their empowerment credentials and the size and scope of the network that they planned to roll out, so as to make the most efficient and effective use of the spectrum, he says.<\/p>\n
Spectrum licence holders would then also be required to make spare capacity available on a wholesale basis to those wanting to on-sell retail services.<\/p>\n
Once the old licences have been converted to new ones – which Icasa still hopes to complete by November – then licensees can apply for spectrum, Mashile says.<\/p>\n
Mashile also chairs two other important projects: local loop unbundling and fixed line portability (mobile number portability was introduced last year).<\/p>\n
Concerning the local loop, Mashile says Icasa will form a committee to implement the DoC’s local loop unbundling report, consisting of himself and one other councillor (probably Robert Nkuna). SA’s Internet billionaire and Ubuntu Linux founder Mark Shuttleworth will also help.<\/p>\n
Mashile says with the benefit of the lessons of other countries that had already unbundled their local loops, Icasa hopes to complete the process “well before” the 2011 deadline imposed by the DoC. He says Icasa takes local loop unbundling “very, very seriously” as that is one means of providing choice to consumers and should enable far more significant broadband penetration.<\/p>\n
The result of the “audit”? This journalist feels more comfortable that Icasa is getting on top of its mandate in terms of the new Act. Recent decisions, such as the announcement of new pay-TV licensees, were made ahead of the expected time and if old telecoms licences are converted by November that would be a really positive step.<\/p>\n
But, as Mashile himself admits, it’s still only at the bottom of a very big mountain.<\/p>\n