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Telkom under investigation

Telkom is cooperating and has provided some information, but does not believe that the Competition Commission has the authority to investigate it. Graphic by Sam Thomas

The Competition Commission will not back down in its investigations into alleged abuse of dominance by Telkom, despite the real possibility of Telkom going to court to stop the commission in its tracks.

The commission expects Telkom to argue that it has no jurisdiction over the telecoms sector, a move that will be reminiscent of Telkom's failed court action last year. In 2009, the commission referred five complaints against Telkom to the Competition Tribunal – the country's highest competition authority.

However, hearings into the complaints were delayed after Telkom launched legal action, arguing that only the Independent Communications Authority of SA (ICASA) had the right to regulate the sector, and not the competition authorities.

The legal issue went all the way to the Supreme Court, which ruled against Telkom last November.

Commission principal investigator Avish Kalicharan says the authority is determined to investigate another two complaints against Telkom, despite expectations that Telkom will again go to the courts.

It will also not sit around waiting for ICASA to regulate industry tariffs, says Kalicharan. The issue over which body has authority to regulate the industry has long being a bugbear, delaying investigations into anti-competitive practices in the telecoms sector.

ECN filed a complaint in October last year, while Coris Call filed its papers in May 2009. The complaints allege that Telkom has practised exclusionary conduct and charges the companies a premium to connect to other networks.

Who is right?

Kalicharan says Telkom is co-operating with the investigation and has provided some information, but does not believe the commission has the authority to investigate it.

Rather, he explains, Telkom believes ICASA should regulate Telkom's behaviour.

However, the Supreme Court ruling settled the matter, and found that the commission has the power to investigate apparent anti-competitive behaviour, says Kalicharan. He adds that Telkom is using every legal avenue at its disposal to fight the commission, which it has the right to do. However, the commission is not going to back down, he says.

Telkom says it is currently engaging with the commission on a co-operative basis as part of the commission's investigations into the complaints lodged with it. “There is thus no immediate need for Telkom to consider any court challenges. Telkom has reserved its rights as to the issue of jurisdiction,” says the fixed-line operator.

Even if ICASA puts more regulations into place that will determine what tariffs Telkom can charge, the commission can still investigate historic behaviour, says Kalicharan. “We can't sit around and wait for ICASA to sort themselves out, we have a complaint and are obligated to investigate it.”

The commission still has some way to go in its investigation, says Kalicharan. It still needs to go back to the complainants, as well as their customers and suppliers.

The tribunal investigation is ongoing, although dates have yet to be set down. Telkom faces a fine of up to R3.6 billion if found guilty of the accusations of abuse of dominance levelled against it.

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