Government`s amazing contortion act

Dreamtime is over, the government told us yesterday. It is time to face up to the reality of the situation, and a telecoms market structure that would benefit consumers and the Internet industry is just not on.

This makes government a tease. The original message was the same; that commercial interests would come before sound long-term policy. But then, for three short weeks, the dream was allowed to flourish. Two competitors would compete with Telkom for our attention and at long last, ISPs would be allowed to build their own infrastructure, albeit in severely restricted areas.

SA is now locked into a duopoly for the next three years, with no concessions to stimulate the growth of the Internet industry, and very little to make life easier for consumers of telecoms services.

Phillip de Wet, News Editor, ITWeb

Having let the excitement run wild for three weeks, government calmly wound back the clock to settle on a duopoly, with no concessions to making competition any easier.

Speculation is rife as to what really happened behind closed doors when ministers Ivy Matsepe-Casaburri, Alec Erwin and Jeff Radebe met to hammer out this final of final policies. Rumour has it that, despite the show of solidarity yesterday, the ministers did not exactly see eye-to-eye at all times.

Erwin is seen as the originator of the liberal policy we had for such a short time. He is responsible for the well-being of South African businesses, and those businesses are most likely to benefit from fierce competition.

Radebe, on the other hand, is tasked with milking every cent from Telkom`s listing and the sale of government`s stake in M-Cell, both of which will improve in value with the new policy. And Trevor Manuel, although remaining in the background, is also dependent on the cash flow from these deals to make his medium-term expenditure targets.

This leaves Matsepe-Casaburri in the middle, with the task of looking after the telecoms industry and consumers, but also responsible for Cabinet`s broader objectives.

Neither Matsepe-Casaburri nor Erwin are known as weak personalities, and to see them change tunes so swiftly will inevitably give rise to speculation that a lot of pressure was applied from even higher up.

Probably the worst thing about this change of heart is that the same mistakes were made and acknowledged before.

Towards the end of 1999 and early in 2000, before the time had come to draft a new policy, both the Ministry of Communications and the Department of Communications admitted at various times that the 1996 policy and legislation had been a mistake. By giving Telkom such a long period of exclusivity, they had locked the country into a deal from which there was no escape. Subsequently the world changed, Internet infrastructure became as important as good sewage systems, and still there was no way to get around the monopoly.

We have held back the development of the Internet in SA, they said, and we are sorry about it. What we didn`t notice at the time was the one thing missing from such an admission: It won`t happen again.

And happen again it has. SA is now locked into a duopoly for the next three years, with no concessions to stimulate the growth of the Internet industry, and very little to make life easier for consumers of telecoms services.

Amazingly, almost impossibly, the ministers do not see this as a problem. Three years is a small price to pay, Erwin told us yesterday. "Three years in the life of an economy is not much," he said. Perhaps the learned minister has not heard of Internet time?

One of my colleagues once accused me of being a government apologist. I thought that a little harsh, even though I did feel some sympathy for a government that has to balance the needs of the general population with that of business and various industries, and the fundamental demands the economy makes on it.

I would still feel the same way, except that the government has chosen to be dishonest about its own motives, and is now even revising history in an attempt to put a positive spin on events.

One way or another, yesterday`s decision came about because of commercial pressure. It may not have been because of Telkom and M-Cell`s loud protestations, but rather the fact that government is dependent on the money expected from those companies.

This in itself is not a problem. South African citizens paid for every line Telkom ever laid and received bad service in return. It is about time they realise the value of their investment and have the money flow into public coffers where it can be recycled into other infrastructure.

Yet the net impact is negative. Greater telecoms liberalisation leads to greater spending on telecoms infrastructure, and it is commonly held belief, if not a proven fact, that gross domestic product is directly related to money spent on such infrastructure. We will pay for every cent that goes into government coffers, and probably pay double at that.

Even such a mistake could be forgiven; to err is human after all. But the three ministers yesterday denied that they would be doing long-term damage. They refused to acknowledge that they were involved in a trade-off; instead choosing to portray themselves as doing everyone a favour, with no downside.

And then there is what one can euphemistically describe as the "mistruths" to which we are subjected. There was never any intention to allow Sentech to offer international telephone services directly to customers, Matsepe-Casaburri told us, despite her signature on a document which said the exact opposite not a month ago.

Ah, politics. Whatever would we do without it?