Minister of communications Roy Padayachie is confident the November deadline for the unbundling of the local loop will be met.
“I am informed by the regulator that the project is on track and that we will make the deadline,” he said at a press briefing last week.
Padayachie noted that the Department of Communications was, however, still in discussions on precisely the kind of model that should be adopted for local loop unbundling (LLU).
The minister noted that LLU is vitally important to achieve, because it will bring competition to the industry.
The last mile, or local loop, is the copper link between the end-user and Telkom's network and is currently owned by Telkom.
The rationale behind LLU is to foster competition and reduce telecommunications costs through eliminating the requirement for large investments by potential competitors to build their own infrastructure for last mile connectivity.
“We will also work with the Independent Communications Authority of SA (ICASA) on the unbundling of the local loop as another potential contribution towards facilitating broadband access to homes on a large scale,” explained Padayachie.
While the minister reaffirmed his confidence in meeting the deadline, he also advised the industry to anticipate what the “model of unbundling” will bring. “We might see things that might surprise you,” he noted, without elaborating.
Telkom concerns
Meanwhile, Telkom, a key player in the process, argues that a number of regulatory issues need to be clarified before the unbundling can get under way.
The operator's main concern lies in the lack of clarification as to whether the local loop can be considered an essential facility.
“Notwithstanding that the Electronic Communications (EC) Act includes local loops in the indicative list of potential essential facilities, it is arguable whether the local loop is indeed an essential facility,” states the operator.
“Specifically, the EC Act states an essential facility 'cannot feasibly be substituted' and it is Telkom's contention that a wireless local loop these days is more than a substitute for both voice and broadband communications,” argues Telkom.
But ICASA says it is well aware of the ramifications around the definition of essential facilities vis-`a-vis LLU and will address the issue in due course, in line with the set time frame.
“What, however, is critical, from the point of view of the authority, is to ensure access to the LLU is facilitated. In any event, the local loop, as a facility, is already legally obliged under chapter eight of the EC Act.”
Telkom also argued against the lack of clarification around how the authority would conduct and conclude a market review process for LLU. But ICASA explains it will explore the relevance to LLU of section 67 of the EC Act, in terms of significant market power and related numbers.
Despite Telkom's concerns, ICASA previously stated it is confident the regulatory issues regarding LLU will be ironed out before the November deadline.
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