Local loop unbundling (LLU) is again being held up, but this time by a separate court process that arose after Telkom sought to interdict an August 2012 decision by the Independent Communications Authority of SA's (ICASA's) complaints unit.
ICASA recently published another set of draft LLU regulations, which are open for comment until 9 September. The regulations do not seem to differ markedly from previous documents issued by the authority.
Although LLU seems to be finally gaining traction, it can only kick off once a High Court process has been wrapped up, and not much has happened in the court as yet. There is also no clarity as to when the court matter may be wrapped up.
As a result, LLU is becoming less relevant with each delay as operators work around the need for access to the last mile, note some commentators.
Court battle
Last August, ICASA's Complaints and Compliance Committee (CCC) found Telkom failed to "respond adequately" to competitor Neotel's request for access to parts of the local loop.
While it did not impose a fine, as LLU regulations still had to be developed, it warned that Telkom "must be warned to follow the rules... otherwise the CCC will not hesitate to recommend a harsh penalty, allowable under the regulations, in future".
The CCC noted that, to provide a practical solution to the dilemma of competitors leasing facilities from Telkom, the regulations need to be finalised. It noted that "any further delays will frustrate competition envisaged by the legislature, as well as prejudice consumers".
Telkom has instituted High Court proceedings to interdict ICASA from implementing the CCC order and to have the CCC order reviewed and set aside.
Little progress
Last week, the authority notified stakeholders that it had published draft regulations, and invited comments. However, in its Cost to Communicate programme gazette notice, it says the regulations "shall not take effect until after the completion of the CCC ruling review process".
ICASA spokesman Paseka Maleka says Telkom's appeal is still at the early stages of pleadings and "not much has been done".
Kathleen Rice, director of technology, media and telecommunications at law firm Cliffe Dekker Hofmeyr, says the LLU process is contingent on another process about which there is little clarity.
"We may not see local loop unbundling in any form in this lifetime if the regulations [are] contingent on the outcome of the review application."
Rice adds there is no indication of when the court process may be completed and notes that, at this rate, LLU may fade into obscurity before it is implemented. "This whole thing is just shrouded in mystery."
Dwindling relevance?
According to ICASA, freeing the last mile will enable more competition in the sector, which will trim prices, and also has the potential to add about R1 billion in revenue to the telecoms sector.
Mitchell Barker, CEO of WhichVoIP.co.za, said in a May statement that the lack of progress with LLU is a major obstacle in the way of the country's broadband growth. "By giving other operators and providers access to those lines, it will remove barriers to entry for new operators - including VOIP providers - which will foster competition in the industry, which in turn will drive down prices."
Barker believes LLU will create supply and demand, making fixed-line broadband access far more affordable to the consumer, and driving down the cost of doing business in SA. The problem is that the process had stalled, Barker noted.
Unbundling the last loop kicked off last April, when Telkom cut the cost of IP connect - Internet service providers' single biggest cost - by 30%. Another cut is in the pipeline, although it has yet to be quantified.
Last November was meant to see Bitstream come into effect as part of ICASA's phased approach to unbundling the local loop. However, this was put on hold until Telkom's access line deficit was sorted out.
Telkom has argued the cost it charges end-users to access copper is less than the cost of the line, which requires a mechanism to be put in place to recoup this loss.
The process of freeing the last mile started in 2006, when former communications minister Ivy Matsepe-Casaburri appointed an LLU committee. A year later, the communications department said all approved operators should have access to Telkom's infrastructure when necessary.
Internet Solutions' executive for regulatory affairs, Siyabonga Madyibi, says because of the delays associated with local loop unbundling, many telecoms providers have invested heavily in alternate infrastructure to get around the situation.
LLU becomes less and less relevant the longer it is not implemented, adds Rice.
Little change
The latest draft regulation does not deviate much from the previous draft versions, says Madyibi. He explains access will be provided to licensed telecoms operators via a leasing mechanism to existing infrastructure, via bitstream and shared/full loop access.
Madyibi adds that provisions have been made to mandate the owner of the infrastructure to provide the same or "similar technical or service level quality of service it provides for itself or entities under its control". Similar instruction has been given with regards to pricing, which must be openly publicised, he explains.
Penalties have been proposed for those electronic communications network service licensees that transgress the directives laid out in the draft agreement, says Madyibi.
While Internet Solutions is pleased ICASA has published this latest draft, and awaits with interest the implementation of the proposed actions, he notes there is no insight into the quality of the infrastructure and the degree to which it has been maintained.
In addition, terminology such as "similar technical or service level quality of service" is open to abuse, which may further delay or harm full and proper access to the local loop, says Madyibi.
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