Interconnect debate gathers steam

The Parliamentary Portfolio Committee on Communications is due to meet tomorrow morning, to draft its report and possibly make recommendations following two days of hearings into the price of cellular interconnect.

Parliament invited public comments last week on proposals that mobile and telecoms operators drop the interconnection rates with effect from 1 November to 60c per minute during peak times. It also invited public feedback on suggestions that interconnection rates be further reduced by 15c annually on 1 November for each successive year until 2012. The public was also called to comment on the call that as a general rule, the progressive reductions in interconnection rates between 2009 and 2012 should yield concomitant reductions in the actual consumer (retail) prices of telecommunications.

During the sometimes heated hearings in Parliament last week, Telkom had to fend off angry questions and comments from MPs who attacked its high interconnection, termination and line charge rates.

Parliament threatened Vodacom with a subpoena to release details of its costs that led to the current interconnection rate of 125c per minute.

Cell C was saved from Parliament's wrath by suggesting the interconnection rate be cut to 75c for incumbent operators and 65c for new entrants.

MTN argued that mobile call rates are cheap, and urged a policy trade-off on interconnect fees.

All the opposition parties, namely the Democratic Alliance, Independent Democrats (ID) and Congress of the People (Cope), say the hearings were just the beginning of a process to discover how to bring down the cost of telecoms.

They all say the large network operators had failed to convince as to why the interconnection rate had to stay so high at 125c per minute.

However, they did not agree on exactly what should be done about all the other issues that plague the telecoms sector, such as local loop unbundling, geographic number portability, the lack of Department of Communications (DOC) policy and amending the Electronic Communications Act (ECA).

“A key factor that came out of these hearings is that Parliament's recommendation of 60c per minute, which was essentially a thumb-suck and not scientifically calculated, was achievable,” says Lindiwe Mazibuko, DA shadow minister of communications.

She says the DOC had been caught “napping” as it had not issued any formal policy with regard to the sector and so made it difficult for Parliament to hold it accountable.

“The sudden 'shoot-from-the-hip' policy directive from the minister [communications minister Siphiwe Nyanda] was a way to try and get around the ECA, but ICASA [the regulator] does have time to consider it and can decide that the directive compromises its independence or mandate,” Mazibuko notes.

She says the cellular network operators should, however, make a goodwill gesture of cutting their interconnection rates and then allow for the process to move forward.

ID leader Patricia de Lille says the large operators had failed to convince that the rate could not come down, and notes that Parliament's proposal is reasonable.

“What we are seeing is the beginning of the process and I don't believe that the final report should go as far as looking too closely at the other issues as the scope was not that broad,” she says.

“If ICASA doesn't regulate the cellular industry properly and bring down the cost to connect, then Parliament should look at replacing the entire council,” says Juli Kilian, Cope communications spokesperson.

Kilian says the hearings have kick-started the process, but have shown that the DOC “...was fast asleep”.

“All the other issues are simultaneously crucial and the executive has not come out with any concrete plan or policy to help resolve it,” she says.