Doubt has been cast as to whether the Complaints and Compliance Committee (CCC) has jurisdiction and the required muscle to rule on the interconnect dispute involving newcomer Telkom Mobile, MTN, Cell C and Vodacom.
What began as a disagreement between Telkom Mobile and MTN over the principle of “price taker” regarding mobile termination rates has now extended to include the other two main players in the market: Vodacom and Cell C.
Telkom Mobile, expected to be operational before the end of the year, is calling for an interconnect rate of 93c per minute, while MTN insists on maintaining its 89c standard. The dispute with the other operators is of the same nature.
With neither party able to come to an agreement on a rate going forward, the Independent Communications Authority of SA (ICASA) stepped in and referred the matter to the CCC.
Hearings involving MTN and Telkom began on Saturday, 2 October, and have not yet been concluded. The CCC will now propose another date to conclude the matter. Thereafter, it will have 90 days to provide a ruling.
However, at Saturday's hearings, MTN argued that the jurisdiction of the CCC is called into question as the dispute has since grown into an industry-wide one, suggesting that ICASA, as the authority, should preside over the matter.
On whose authority?
At the hearings, MTN's legal team argued that the interconnection dispute has evolved into one that affects the entire industry and, while the CCC may have jurisdiction to preside over disputes between two companies, it did not have jurisdiction over a ruling that would affect the entire industry.
MTN pointed to a possible scenario in which different rulings would be made in each case and the subsequent impact it would have on the industry; especially considering that different councillors would likely hear the different cases.
It was questioned as to why the matter has not yet been consolidated into a single one in which Telkom Mobile would face off against MTN, Vodacom and Cell C in a single hearing.
Furthermore, confusion over the CCC's muscle to make a ruling was contended as it was unclear whether the body would derive its defined powers from the ICASA Act or the Electronic Communications Act.
It is not yet clear whether the CCC, in this case, would be expected to provide the final ruling on the matter, or simply recommendations to resolve the matter.
Under discussion
ICASA has responded to the issues raised by MTN's legal team saying that: “The CCC has just heard the matter between the two parties (Telkom and MTN) and the committee will then deliberate on their submissions.”
In terms of the ICASA Act, the committee must make its findings within 90 days after the hearings. “Whether the matter falls within or outside the jurisdiction of the CCC, the committee is yet to make its findings within the stated time period in that regard,” offers the authority.
Regarding the concerns over a consolidated hearing, ICASA says it has set aside different dates for the other hearings involving Cell C and Vodacom.
“Please note that the complaints were not lodged at the same time and the authority cannot say it was anticipating other related complaints,” maintains ICASA.
Absent regulations
MTN argued that currently no finalised interconnection regulations exist, and by extension, the ruling by the CCC at this stage would undermine possible contradicting points in the finalised regulations.
Currently, the draft regulations propose a glide path that will see the cost of interconnect rates dwindle to 40c by July 2012. MTN argued that this has not yet been decided on and, therefore, the CCC's ruling would undermine the final regulation.
Furthermore, the operator's legal team noted that if the regulations get finalised, the gap of 4c would grow and the issue would once again be in dispute.
But Telkom argued that the special rate for which it is calling would be transitory and be subject to time constraints decided by the CCC.
Nonetheless, ICASA's indecision and lack of finalised regulation regarding asymmetrical rates and what defines a significant market power is what the main argument balances on.
Telkom's significance
The crux of the argument lies in whether Telkom Mobile can be considered to be a newcomer to the industry and by extension call for an asymmetrical rate as it attempts to grow its subscriber base.
Telkom maintains that this is its first venture into the mobile industry and that Telkom Mobile is a mobile telephony offering that has no roots in its fixed-line business.
But MTN says Telkom's dominance in the telecommunications industry cannot be ignored. The company also argued that Telkom Mobile is not an entirely new company, it is the mobile arm of a telecoms giant.
Add to that, Telkom Mobile will operate under the same licences as Telkom.
The rulings will be significant in that the CCC would have to base a lot of its decision on what the authority defines as a significant market player and further who qualifies for asymmetrical rates; of which neither issue has been finalised.
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