City wants 'return on irritation'

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 08 Aug 2008

The City of Johannesburg wants its coffers and residents to benefit from the boom in fibre laying that has seen many arterial routes and roads dug up repeatedly - to the growing irritation of motorists.

Mpho Leseka, policy and programme integration manager at the city's Department of Economic Development, says Johannesburg does not have a formal policy to comprehensively regulate right-of-entry to its property by electronic communications operators.

"In the past, telecommunication service providers were monopoly entities, wholly-owned by the government," she says.

"These entities had special access to municipal property and provided telecommunications services without adequately compensating the municipality."

This meant the city bore the cost of road repair and other maintenance expenditures, without being able to pass them to the telcos.

Leseka says entities such as Telkom and Transtel are no longer state monopolies and other companies are now also active in the telco space.

"If the historical approach is not changed, it would mean that the city should absorb costs generated by a whole swathe of electronic communication operators. Maintaining the status quo essentially means that taxpayers [will continue] subsidising the telecommunications companies for the benefit of their shareholders," Leseka adds.

"It is, therefore, necessary for the city to adopt by-laws in order to arrest the propensity of certain entities who access and utilise city property without appropriate compensation.

"Furthermore, the city has an obligation to optimally manage and maintain the city's assets and facilities on behalf of taxpayers."

Call for comment

Leseka says her department will shortly call for public comment on the matter. Analysts have broadly welcomed the move.

"It's a long overdue step, but comes at a moment in our infrastructure history when it appears to be shutting the stable door after the bulldozers have bolted," says World Wide Worx MD Arthur Goldstuck.

"Most of the major fibre optic networks are being rolled out now, so it is already a lost opportunity.

"If the next phase of roll-out is wireless networks, particularly with WiMax masts, then you are looking at less dependence on public spaces and more use of private buildings, rooftops, and the like," Goldstuck adds.

"However, should new licences finally be awarded, there may well be a new round of roads being ripped up and lamp-posts bedecked with electronic holly.

"Since the networks are going to get a massive return on investment from all this infrastructure, thanks to a near rent-free use of public space, both the city and the public at large have a right to get a 'return on irritation'."

BMI-TechKnowledge director Brian Neilson says the move could be seen "as a kind of tax", but one that might result in a narrowing of the "digital divide" as it "could be seen as a means of ensuring the backbone networks reach into the poorer areas as well".

Neilson adds the development is "in line with global thinking in respect of city networks".

"The city forms a partnership with a private sector player; for example, an operator, who gets access to the city's physical resources and in exchange provides services to the city at reduced prices."

Frost & Sullivan ICT industry analyst Lindsey Mc Donald warns that there is a downside: "... for this proposal to work, it will have to be properly regulated. I am not convinced that this move by the city will actually bring down telecommunications costs."