The Independent Communications Authority of SA (ICASA) will introduce a phased approach to local loop unbundling (LLU), which will see operators gain access to the last mile.
The phased approach will minimise disruptions in the ICT sector.
At a briefing this morning, ICASA chairperson Stephen Mncube presented the findings note on the authority's framework for introducing LLU.
He explained that the findings are the outcome of a consultative process.
“Without consultation with the experts in the industry and civil society, ICASA's job would be far harder. Nevertheless, they frequently disagree with each other, which is where we need to bring our own judgement to bear.”
He summarised the findings, saying LLU is an intervention that offers significant advantages to operators and to the consumer. However, it also involves significant disruption to operators, particularly the incumbent.
“The authority has determined that the existence of an access line deficit is a significant obstacle to the introduction of fixed-line local loop unbundling.
“The authority will, therefore, take a phased approach to the introduction of LLU.”
Industry collaboration
As a first step, Mncube said the authority will convene an industry working group to establish an Access Line Deficit Recovery Scheme, which will start work in February.
“Secondly, the authority will engage with industry to ensure that the price of the existing service, IP Connect, is reduced. It is expected that this will be with effect from the 31 March next year.”
The chairperson added that, thirdly, the authority will engage with the industry to ensure a true “Bitstream” product is introduced, by 1 November next year.
“In order to facilitate the introduction of Bitstream, the authority will establish an industry working group to address technical issues, including the establishment of an ordering system specification mechanism. This will convene starting in February next year,” said Mncube.
ICASA will conduct a regulatory impact assessment (RIA) on the costs and benefits of the fixed-line full-loop, sub-loop and shared line forms of LLU, commencing in mid-2012.
Thereafter, depending on the outcome of the RIA, the authority will conduct a market review on the fixed-line local access market and introduce supplementary LLU regulations.
Mncube said as a separate process, ICASA will undertake an inquiry into the unbundling of wireless access networks.
The findings note that outlines the findings of the inquiry will be published in the Government Gazette soon.
The chairperson added that a more comprehensive reasons document, which explains the rationale behind the decisions taken, will be published in due course.
Step forward
ICASA says the phased approach will especially minimise disruptions in employment and network investments.
The authority previously said the unbundling of the local loop in the South African electronic communications market represented a step forward in introducing the open-access approach to regulation of the sector.
Earlier this month, ICASA said once the framework is established, it will then take some time for regulations to be put in place. This process could take another year to unfold.
However, despite the fact that the industry was expecting final regulations, the authority said “we are not running behind the deadline”. It explained that the discussion document does not refer to regulations, but rather a framework as to how unbundling should happen.
Cost debate
LLU is the regulatory process of allowing multiple telecommunications operators to lease the local loop, which is that portion of a network which connects the subscriber to the balance of an ECNS licensee's electronic communications network.
It has been on the cards for the past decade and is seen as vital to stimulate competition, aid economic growth and reduce the cost of communications.
However, Telkom does not want the local loop unbundled. The operator argues it will not help grow access to communications, but will instead cost the economy jobs at a time when the country is slowly recovering from the recent recession.
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