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Mixed views on spectrum plans

All licensees will be subject to the “use it or lose it” principle, says Paris Mashile.

Industry representatives have greeted the Independent Communications Authority of SA's (ICASA's) spectrum auction plans with mixed reviews. One insider described them as “bizarre”, while another said they were at least better than the “beauty contest” first proposed.

Speaking at the Internet Society South African Chapter's Inet conference, in Cape Town, yesterday, ICASA chairman Paris Mashile outlined the regulator's latest plans to auction spectrum to the industry.

The plans have been long in the making and are due to be published in the Government Gazette today.

Mashile told the audience the idea behind the latest policy was to ensure the digital divide is bridged and that those who do not have access are able to get it. The audience was made up mainly of representatives from small Internet service providers, municipalities and Internet enthusiasts.

“We want everybody to be able to access the technology and the plan is that those who get the licences will be forced to ensure this is done,” he said.

In terms of the licensing plan, four national licences will be awarded, each gaining 30MHz in the 2.6GHz band. As part of the conditions to bid for the licences, the applicants will have to have 30% historically-disadvantaged shareholding and the reserve price for the auction will be R750 000 per licence.

Two licences per municipal district will be awarded in the 3.5GHz range, with each licensee being allocated 30MHz of spectrum. The reserve price per licence will be R250 000.

Another condition for all the licensees will be the “use it or lose it” principle, whereby if they have not used it within a certain time, they will lose access to the spectrum and it will be resold by ICASA.

Mashile said none of the spectrum has been allocated to any municipality specifically for its use. He noted that municipalities will have to either bid for the spectrum themselves, or form some kind of alliance with a spectrum-holder to deliver services.

“We want the licence-holders to provide spectrum as their core business. Not those who have other core businesses, such as rubbish removal, and then do not use the spectrum,” he said.

However, a number of audience members pointed out that, in terms of the constitution, service provision is the mandate of local authorities and they need access to the spectrum at a cheap rate to provide services at the lowest cost if not free.

“More and more municipalities will be looking at building their own networks to provide access to provide services and this includes rolling out fibre-optic networks, and using wireless to extend those networks where necessary,” said Leon van Wyk, head of broadband networks at the City of Cape Town.

Henk Kleynhans, MD of Skyrove Networks, said: “One would think they [policy-makers and regulators] would want the cost of connectivity to come down as much as possible, so then they would want as much competition as possible. The fact they are limiting the national spectrum to four licence-holders is, therefore, totally bizarre.”

Trust Fabric MD Joe Botha said: “The current policy is far better than the previous 'beauty contest' approach. Beauty contests are always subject to litigation, while an auction is about money and is far easier to manage.”

Botha said he noted that ICASA had also changed its tune as far as the use it or lose it idea was concerned. This was good, he added, as it prevented companies from hogging spectrum and depriving others from using it.

“Certainly lobbying by organisations, such as the Internet Service Providers' Association and the Open Software Alliance, have helped to change ICASA's mind about a number of the spectrum issues,” he said.

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