While some implementation issues remain, the Independent Communications Authority of SA's (ICASA) new spectrum licence fee regulations are “one of the most constructive regulatory interventions” the body has made to date.
This is according to the Internet Service Providers' Association (ISPA), which yesterday commended ICASA for its new regulatory framework governing the licence fees for radio frequency spectrum, set to be implemented as of 1 April.
ISPA's regulatory advisor, Dominic Cull, says the new regulations are designed to provide an economic incentive to encourage licence holders to use spectrum efficiently. “[The new regulations] will dramatically lower the costs of frequency for point-to-point (PTP) links, particularly in rural areas.”
The new pricing model moves away from a fixed price of R770 per MHz per link per annum, to one that takes into account different uses of spectrum and the need to ensure that licensees occupy appropriate spectrum for these uses.
For example, says Cull, spectrum below 3GHz is regarded as being the most suitable for the provision of wireless access services. “Using this spectrum for backhaul links prevents it from being used for access services at a cost to the South African economy. The licence fees for a PTP link in bands below 3GHz are, therefore, higher than for those in ranges such as 8GHz and 23GHz.”
Similarly, he adds, licence fees payable for spectrum usage outside of Gauteng, Cape Town and Durban will cost one-tenth of spectrum usage within those areas, lending incentive to rural network roll-out.
“The annual licence fees payable for a PTP link will fall from tens of thousands of rands to, in some cases, hundreds of rands per annum. An example is an existing link in the 23GHz band between two rural educational facilities, which cost R43 000 in licence fees in 2011/12 - the licence fee for 2012/13 will be R560.”
Digital divide
Cull says access to communications is one component in bridging the digital divide. “The other is making that access affordable. These regulations will play a role in both respects.
“By rewarding those licence holders who use spectrum efficiently, the new regulations will help to ensure better service for consumers. And by lowering the price of connectivity, they are helping to increase competition and introduce more and more South Africans to affordable broadband services.”
The Department of Communications and the ICT industry are bound to a contract to ensure 100% broadband penetration by 2020, a move Cull notes forms a keystone of the government's drive to create more jobs and stimulate the economy, particularly in the small to medium-sized enterprise sector.
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