It was a victory, for sure. Poison Ivy got spanked when she tried to play the age-old delay-by-litigation game to prevent the "independent" regulator from taking her at her word, and permitting value-added network services operators to lay their own infrastructure.
But celebrating this undeniable victory misses a larger point.
True, there has long been no sensible argument against granting permission for VANS to self-provide. If it is cheaper, faster, or more flexible, to set up your own link or lay your own cable, instead of renting a small part of one of the big networks, whoever operates the big network is profiteering or doing an atrocious job, or both.
The goal of government policy has always been to protect incumbents. They claim it is to safeguard important national assets, and create certainty in which these operators can invest. The real reason is more likely control and patronage. And the real effect has been to put the brakes on development and raise prices way out of all proportion with international norms.
Gob-smacked
No wonder FIFA was gob-smacked when it discovered how expensive it would be to procure, what anywhere else would be basic broadcasting and data infrastructure. An accountable public servant would have resigned to salvage at least some personal honour, if they'd been the cause of such a national embarrassment.
An accountable public servant would have resigned to salvage at least some personal honour, if they'd been the cause of such a national embarrassment.
Ivo Vegter, freelance journalist and columnist
So, the minister certainly had this defeat coming, and one can understand the elation.
However, look at what happened when the mobile operators finally were permitted to lay their own cables. In day-glo road-cutting trucks, they're racing each other along the kerb-side, cutting up both sides of anything that looks like tar to get fibre into the ground.
We were once told this wouldn't happen, and even that this shouldn't happen. It would undermine Telkom's ability to connect under-serviced areas, we heard. It would have caused the same telecoms bust that the US and Europe experienced earlier this decade. But what actually happened? Under-serviced areas remain unconnected.
Customers elsewhere in the world, where the telcos weren't protected, have dirt-cheap access to vast amounts of bandwidth. Companies that weren't up to the competition failed - and good riddance to them. This is why those markets are called "developed". They were permitted to develop.
Now that VANS are finally permitted to develop infrastructure, one has to ask, why self-provision only? What would we lose or risk if they were permitted to provide infrastructure not only for themselves, but lease unused capacity to others?
Sure, the big infrastructure companies would get some competition. Boo hoo. Last time I checked, the beneficiary of competition is the consumer. Sure, in theory a thousand companies could be digging up our roads, instead of half a dozen. But would they? Why?
Common sense
It makes logical and moral sense to permit provisioning without limitations. If someone sees a gap in the market to provide infrastructure, and can obtain the requisite spectrum access or permissions from municipalities or local residents, why shouldn't they go ahead and risk their private capital?
Why not make that provision more efficient by permitting them to lease or sell off excess capacity?
If you want to rent out your car, the only people who need to give permission are the car's owner (you, or the bank), and its insurer. The government has no business telling people they can only buy cars for their own use, and that car-pooling is illegal because, well, if they permitted it, everyone would do it, and this would hurt car companies and rental outfits.
If you want to take in a lodger to help pay your bond or your lease, nobody other than the owner of the house (you, your bank, or your lessor) needs to give permission. What business is it of the government to protect rental agencies and estate agents, by forcing everyone to acquire a house for their own use only?
The same goes for provisioning. Now that the courts have finally ruled that self-provisioning won't cause the end of the world as we know it and might actually have some benefits to the market, it's time to make the argument for provisioning in general.
If dozens, or hundreds, of small entrepreneurs - small ISPs, cellular airtime resellers, local spaza shops - were permitted to try what overcapitalised Telkom failed to do, the worst that could happen is they fail too. But, my bet is that some of them would succeed. That's how the market works: by rewarding those who succeed at supplying something when there is demand for it, and bankrupting those who fail.
In all likelihood, the large, well-capitalised companies like MTN, Vodacom and Neotel will corner this market, but they'll do so under the discipline that competition brings, resulting in better services at lower prices.
Set the market free. Forget self-provisioning. Let anyone who fulfils basic licence conditions, without any limit on their number, provide infrastructure, full stop. Only then can we begin to celebrate the victory of the interests of citizens over the dismal failure of bureaucratic mismanagement that has for so long been our lot.
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