{"id":549023,"date":"2006-06-01T15:54:25","date_gmt":"2006-06-01T15:54:25","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/549023-ivy-s-extra-mile.html"},"modified":"2006-06-01T15:54:25","modified_gmt":"2006-06-01T15:54:25","slug":"ivy-s-extra-mile","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/549023-ivy-s-extra-mile.html","title":{"rendered":"Ivy’s extra mile"},"content":{"rendered":"

Communications minister Ivy Matsepe-Casaburri has finally sketched out how government hopes to drive down telecommunications prices. Though lacking clarity in key areas, the minister’s speech, delivered in parliament last week, has been widely welcomed (with some reservations). <\/font><\/p>\n

Internet Solutions CEO Angus MacRobert, for one, is delighted. "This is the best speech that the minister has delivered in many years," he says.<\/font> <\/p>\n

The second network operator, SNO Telecom, has also broadly welcomed it. "It’s very good that at last there is a genuine recognition that local-loop unbundling does make a difference," says company executive Angus Hay of the minister’s announcement that rivals, including SNO Telecom, will be given access to Telkom’s so-called "last mile" of network infrastructure. <\/font><\/p>\n

Political parties have also welcomed the speech, in broad terms. IFP MP Suzanne Vos describes the minister’s determinations as "laudible" but says their implementation cannot be allowed to drag on for an indeterminate period. DA MP Dene Smuts says she welcomes the fact that Matsepe-Casaburri has taken "enormous care to root each proposed policy direction in the relevant clauses in the [Electronic Communications Act]."<\/font><\/p>\n

Of concern, though, is the impact that the policy announcements will have on an already overworked Independent Communications Authority of SA (Icasa). Local-loop unbundling (LLU), in particular, will place extraordinary pressure on the regulator. "We just hope Icasa will have the necessary skills and capacity to deal with these changes," says MacRobert. <\/font><\/p>\n

Matsepe-Casaburri says Icasa will be strengthened. It will be granted additional financial resources and, in line with the Icasa Amendment Bill, the number of councillors will be increased by two to nine. But because the terms of three councillors come to an end on June 30, five new councillors must be appointed in short order. Smuts says it’s important that strong candidates are found. She says Icasa needs an economist on its council. The needs of the broadcasting industry should also not be neglected. <\/font><\/p>\n

Smuts says it is also important to note that, in terms of the Electronic Communications Act, which is awaiting promulgation, the minister’s policy determinations are not legislative instruments as they were under the old Telecommunications Act. This means that they are not binding on Icasa. The regulator must consider all ministerial policy determinations seriously but is not bound by them, Smuts says. <\/font><\/p>\n

Let’s deal with each of Matsepe-Casaburri’s determinations in turn. <\/font><\/p>\n

Arguably, the minister’s most important decision is that Telkom’s local loop will be partially unbundled, allowing rivals to serve consumers directly. LLU is complex, though, and requires detailed and carefully crafted regulations. Only electronic communications network licensees – SNO Telecom, and, possibly, Sentech and the mobile operators – will be given access at this stage. <\/font><\/p>\n

Matsepe-Casaburri says government will create an independent LLU committee whose task it will be to oversee the development and the implementation of the process and to make appropriate recommendations. It is not clear why this task has not been left to Icasa or why this committee is not supervised by it. <\/font><\/p>\n

Of all the operators, SNO Telecom is likely to be the most active proponent of LLU as it has the most to gain. "We will work with whatever committees we have to work with to make it happen," says Hay. <\/font><\/p>\n

SNO Telecom hopes that the process can be expedited, though experience in other markets suggests LLU can take years. "Experience has been built up in other countries so we need to copy that and do it quickly. What one needs is a set of regulations drafted quickly. In principle, it shouldn’t take long." <\/font><\/p>\n

SNO Telecom is "not uncomfortable" that LLU might later be applied more broadly, rather than being limited only to network operators. IS’s MacRobert says it is right that LLU is limited initially to certain players to avoid unnecessary chaos. "In time, a full unbundling should take place." <\/font><\/p>\n

Government will encourage investment by private-sector operators in new broadband wireless networks by "strengthening the policy framework". The minister does not say which companies will be favoured with the necessary licences, though MacRobert says the new Electronic Communications Act, when it is promulgated, will allow first-tier Internet service providers, such as IS and Verizon Business (formerly UUNet), to build their own networks independently of licensed network operators. <\/font><\/p>\n

In line with government’s intention to open the market to new wireless competitors, it will also provide state-owned Sentech with some, or possibly all, of the money it needs to build a national wireless broadband network. "The July cabinet lekgotla last year decided that Sentech is a strategic national asset which has important infrastructure and expertise," Matsepe-Casaburri told parliament. <\/font><\/p>\n

Government will develop an appropriate funding model that takes into account the fact that Sentech "provides and should continue to provide both public and commercial services". Sentech’s wireless network, Matsepe-Casaburri says, will be used to advance government’s socioeconomic development goals. <\/font><\/p>\n

Government’s decision to support Sentech financially is controversial for two reasons. First, it could undermine similar investments by the private sector. Second, Sentech’s early efforts at building a consumer-focused wireless network have, to all intents and purposes, fizzled out. <\/font><\/p>\n

Hay says he finds government’s financing of Sentech strange. "The SNO business model is robust to these kinds of things but it is a bit odd competing against the same government that gave us a licence," he says. "Why [does government] get involved in the industry itself and then try to encourage competition?" <\/font><\/p>\n

Matsepe-Casaburri used her speech to provide an insight into government’s thinking in this regard. "Experience has shown us that where adequate infrastructure is in abundance, this has been as a result of direct and deliberate government intervention, particularly so in developing countries." <\/font><\/p>\n

MacRobert thinks government’s planned investment in Sentech could have positive spin-offs. He says it would make sense for Sentech to provide a wholesale network that private-sector Internet service providers could sell access to. Sentech has proved that it is not well structured to serve end-users and it might make sense for it to leave this to its partners to do. <\/font><\/p>\n

Verizon Business legal, regulatory and operations executive Edwin Thompson is more concerned about the state’s commercial involvement in the sector. "It’s concerning that there is an [appreciation] that competition is needed but that government will be that competition as well," he says. It’s also worrying that Sentech has had its multimedia licence for "quite a long time" and has not done more with it than it has. <\/font><\/p>\n

As expected, Sentech will also be allowed to use its multimedia licence to provide voice telephony to consumers. This means that Sentech is a fully fledged network operator that enjoys many of the same rights as Telkom and SNO Telecom. <\/font><\/p>\n

Other state-owned enterprises will also be used to develop a broadband backbone network. There are no details yet, but Matsepe-Casaburri says the department of communications is working with the d
\nepartment of public enterprises to look at the contribution that certain assets in state-owned enterprises might play in providing affordable broadband access. All the minister will say on this subject is that a policy decision will be made soon. <\/font><\/p>\n

All holders of licences that will qualify to be converted into individual electronic licences under the Electronic Communications Act will be allowed to self-provide international traffic within six months of the promulgation of the new legislation. IS’s MacRobert takes this to mean that first-tier Internet service providers will be able to provide their own international bandwidth. He says that in line with this, IS will probably apply to become a member of the East Africa Submarine System (Eassy) consortium. <\/font><\/p>\n

Eassy is a Nepad-led project to build a high-speed fibre-optic cable system along Africa’s east coast that will compete with the Sat-3\/Wasc\/Safe system that runs along Africa’s west coast and which connects Europe with the Far East. Eassy should come on-stream in 2008. <\/font><\/p>\n

Verizon’s Thompson is less sure that the minister’s pronouncement includes Internet service providers. He says further clarity is needed. <\/font><\/p>\n

Government, Matsepe-Casaburri says, will ensure that the Eassy cable is "open" and "nondiscriminatory". The aim is to ensure that access to the system is as affordable as possible for nonparticipants. The danger is that such regulations could undermine or even destroy the investment case for those stumping up the cash needed to build the system. Icasa will need to tread carefully when it draws up regulations in this regard. <\/font><\/p>\n

Of greater concern to some is Matsepe-Casaburri’s statement that government wants access to international telecom cables to be provided on a cost basis and to be regulated as essential facilities. As one industry executive points out off the record: "If you have to sell your bandwidth at cost, you are not going to invest. Commercial players do not invest for no return." Again, Icasa will need to proceed with caution. <\/font><\/p>\n

Lastly, government will establish a broadband advisory council to advise the minister on how best to drive the adoption of broadband. The council must report to Matsepe-Casaburri before the end of the year. <\/font><\/p>\n

INet-Bridge ||<\/em>\u00a0 <\/font>Discuss this article<\/font><\/a> <\/font><\/p>\n

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Matsepe-Casaburri doesn’t disappoint as industry cheers her policy speech.<\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-549023","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/549023"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=549023"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/549023\/revisions"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=549023"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=549023"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=549023"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}