What`s behind ICASA`s ADSL decision?

Although some people saw positives in the new ADSL regulations recently published by the Independent Communications Authority of SA (ICASA), the general feeling seems to be that not enough was done on the most critical issue: the way the service is priced for the consumer.

So why did ICASA not force Telkom to remove one of its charges? I think there are three possibilities here.

The first - postulated late last week by a telecoms analyst - is that ICASA is trying to ensure the second national operator (SNO) will be able to realise decent profit margins in its ADSL offerings (whatever ADSL pricing regulations it enforces on Telkom must also apply to the SNO).

This is a defendable argument, with implications that are enormous. If this is indeed the case, has government inadvertently shot broadband consumers in the foot? Is the imminent entrance of the SNO causing prices to be held up, so that the operator will be able to recoup the billions it has invested?

A duopoly is little better than a monopoly. I don`t think ICASA chairman Paris Mashile`s overused comment that competition is the best form of regulation can be applied to a market with only two service providers.

The organisation is riddled with scandals of mismanagement, limited expertise, and crippling understaffing.

Dave Glazier

The second possibility is that ICASA has been secretly pressured by someone to not enforce any meaningful change. Some say the Department of Communications is pulling the strings; others say Telkom must have devious ways of applying pressure to the regulator. Both these arguments have their merits (the first, I think, more so than the second).

But the third possibility, and the one that I feel may be the strongest argument, goes as follows: ICASA is quite simply incapable of making the correct decisions. The organisation is riddled with scandals of mismanagement, limited expertise, and crippling understaffing. Its job is an important one, no one can deny that, and in the end I think it is just not getting it done.

ICASA`s decision has caused quite a stir, and I think we should question the reasons for its findings. There was much hype, and a lot of huffing and puffing in the run-up to the public ADSL hearings in May, where some ISPs and other industry parties finally had a chance to voice their concerns.

And that they did. The hearings were lively, the room was packed with an interested audience, and ICASA (headed by the two outgoing councillors Mamodupi Mohlala and Nadia Bulbulia) was thorough in its interrogation of all the parties. It was particularly aggressive towards the fixed-line monopoly`s 10-person entourage. But, when it came to the final document, the regulator has let Telkom off the hook.

Compare this to the European Union`s decision this week to uphold an order by German regulators that Deutsche Telekom must open up its broadband networks to rivals. Reports indicate that telecoms officials had to overcome considerable political pressure to combat the company`s monopoly.

The issue is not the same as our uniquely South African one, but the principles of regulation remain. In economies of scale, regulation is nearly always necessary, and it usually must be decisive, forceful and change-effecting.

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