The Independent Communications Authority of SA's (ICASA's) failure to acknowledge industry input, and then cancel its spectrum auction, makes a mockery of the public consultation process, says Steve Song, telecommunications fellow at the Shuttleworth Foundation.
Song and a number of industry observers and participants have expressed extreme disappointment at the communications regulator's last-minute cancellation of the auction for spectrum in the 2.6GHz and 3.6GHz bands.
Yesterday, ICASA councillor Marcia Socikwa said at a press conference that, since releasing the first invitation to apply (ITA), the authority had been inundated by requests from the industry seeking clarity on the finer details of the licensing process.
As a result, the auction was called off in favour of a more consultative process, dependent on the appointment of an experienced spectrum auctioneer, Socikwa said.
The auction was supposed to take place on 30 July, after having been postponed from its first date of 30 June.
Costly exercise
Industry reaction has been one of dismay, with participants pointing out that they spent considerable time, resources and money in preparing their submissions.
Many felt ICASA and the Department of Communications had succumbed to lobbying by the incumbents to keep out the smaller players.
Song says the Shuttleworth Foundation had supported the Open Spectrum Alliance to hire one of the “world's top spectrum auction experts”, Karen Wrege, to provide input to ICASA based on lessons learnt from such auctions internationally.
“All of the issues raised now, including the need for technology neutrality and in-band migration of existing spectrum holders, as well as the importance of clearly defined auction rules, were raised in our submission in July of last year. We were not alone in raising these issues. At the time, we hoped that ICASA would take the opportunity to contract auction design services from the expert in question, who clearly had no stake in the outcome,” Song says.
He adds that ICASA's failure to acknowledge this input and then cancel the ITA nearly a year later “for the same reasons raised in our submission” makes a mockery of the public consultation process.
Song believes the single most important function the spectrum auction can serve is to increase competition in the South African telecoms marketplace.
“Handing spectrum to the incumbents will not achieve this. ICASA should insist on setting aside some of the spectrum specifically for new market entrants, as was done successfully in the 2008 AWS spectrum auction in Canada.”
Incumbent pressure
The Internet Society's South African Chapter comments that undoubtedly the auction cancellation was due to pressure from the incumbents, and what it considers to be spurious “technical reasons”.
“While we recognise there are some challenges with the ITAs - especially the national ITA (for 2.6GHz) - we believe there were measures that could have been taken to mitigate the issues,” it says.
The society believes the cancellation of the regional ITA (for 3.5GHz) appears to be unjustified.
“We know that there are dozens of wireless ISPs struggling to compete with the previously-advantaged licensees due to the lack of available licensed spectrum, and their chances of doing so have just been squashed,” it notes.
Internet Solutions head of regulatory affairs Siyabonga Madyibi says the company is extremely disappointed about the cancellation.
“We believe that all the issues that were given as the reasons for cancelling the auction could have been addressed over the lengthy consultation period.”
Taking issue
Madyibi says Internet Solutions spent an estimated R500 000 on preparing its submissions, although many of the resources used were internal.
“For a small company, the cost would have had a far greater impact and so for them it must really be disappointing.”
As far as lobbying goes, Madyibi says Internet Solutions, along with all the major telecommunications operators, had submitted letters to ICASA to get clarity on certain issues, but he did not think there was any real point in behind-the-doors lobbying.
Gartner telecommunications analyst Will Hahn has taken a more sanguine view of the auction cancellation.
“I haven't been able to sink my teeth into this one yet, and one always suspects there's another shoe to drop here, but to my examination this one seems fairly innocent,” Hahn comments.
“If ICASA is worried that the previous auction method would have been biased in favour of localised WiFi instead of more national LTE architectures, then I believe that is a valid concern. Of course, the older way probably also balanced matters a bit in favour of the smaller entrants instead of the large national players. So it could be a case of doing the right thing for the market, a bit slowly, and maybe with mixed motivations,” he concludes.
Related story:
ICASA calls off spectrum auction
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