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Silence on essential facilities

Candice Jones
By Candice Jones, ITWeb online telecoms editor
Johannesburg, 07 Jun 2010

After three years of back and forth, the Independent Communications Authority of SA (ICASA) has released regulations on facilities leasing.

The new regulations are expected to come into effect at the end of the month; however, there is still no clarity on the essential facilities. Essential facilities have yet to be determined, even though they could provide an even playing field for new market entrants.

The new facilities leasing regulations will be a guide to telecoms operators on how they can lease their infrastructure and services to other providers.

ICASA released the first set of draft regulations on facilities leasing in 2007, which were intended to help new market entrants to fairly rent infrastructure from established network operators, and are supposed to work in conjunction with the interconnection regulations.

The regulator released the interconnection regulations earlier this year, which dictates how agreements between operators need to be completed. The regulator also released a draft set of regulations governing the cost of termination.

All three sets of regulations are expected to help the smaller alternative operators gain traction in the telecommunications market, and the new facilities leasing documents make some concessions to help those new players gain access to what they need.

Two prominent clauses in the regulations show ICASA has taken into account that there are certain players in the market with significant market power, and smaller operators are given more leeway, even if they have their own infrastructure.

The first regards the transparency of the terms and conditions applied to the infrastructure that can be rented out. According to the regulations, players with significant market power cannot, by any means, show favouritism to any other business, and the terms and conditions need to clearly state that.

“An electronic communications facilities provider must apply similar terms and conditions, including those relating to rates and charges, in similar circumstances to itself, affiliates and other communications facilities seekers requiring similar services, unless otherwise requested by the electronic communications facilities seeker,” the regulations state.

Smaller businesses are not required to follow this clause in the regulations, nor are they expected to provide a detailed pricing breakdown and unbundling of services when it comes to leasing.

The clause that governs service unbundling again only applies to those companies with significant market power.

Differentiating between smaller businesses and those with high level market share has always been the bugbear of these regulations. It was also the reason the regulator went back to the drawing board to recreate this current set, which is the third iteration of the document.

The essentials

Despite the long awaited regulations on leasing, another set of regulations is still expected, with terms to detail essential facilities.

Alongside the draft on facilities leasing, the essential facilities regulations have been expected since 2005. The difference between facilities and essential facilities has long been a contentious issue in the industry.

However, draft regulations published in 2007 started to clarify what the regulator considered essential facilities. These included backhaul circuit, cable landing stations, co-location space, earth stations, international gateways, land-based fibre cable, main distribution frame and undersea-based cables.

The list will likely have a different look now, with the considerable changes to the industry since 2007. Mobile operators are supplementing backhaul with their own network infrastructures, and will soon be free of Telkom's leases on the infrastructure.

Landing stations will likely remain an essential service, despite an influx of undersea cables and companies that will look after the landings. Currently, Telkom's SAT3/SAFE cables and Neotel's landing of Seacom are the two available; however, the East and West African Cable systems are expected to land soon.

Local loop unbundling remains the top priority for local Internet providers and smaller telcos. With Telkom owning the last mile, it has made for a hard time for many providers to competitively lower prices.

However, Telkom will not be happy to include the local loop as an essential service, since it will have to give up sole custody of the exchanges, allowing other smaller players to offer their own Internet and fixed-line telephony services.

ICASA has not yet responded to ITWeb's query on whether it plans to release a document governing essential facilities.

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