Talk is cheap

THE Independent Communications Authority of South Africa (Icasa) is a favourite punching bag at the moment. It did itself no favours by siding with trade federation Cosatu in the matter of the Vodacom listing, and having top managers claim ignorance of decisions made on the matter.

Icasa brings harsh criticism upon itself and came under fire from the Competition Tribunal this week, which says the telecommunications sector needs more effective regulation.

And who could disagree?

SA's telecoms sector is reaching a make-or-break point in its expansion and will rely on effective regulation to make the transition from one-horse town to competitive environment with sustainable opportunities.

Regulatory bodies of some form are necessary in transitioning market sectors, but can do more harm than good if not effective. Ultimately the sector should govern itself and be allowed to find its own direction. But before that can happen, some key elements of its evolution must be dealt with.

A platform is required, and Icasa is instrumental in developing it.

How now?

For one, the unbundling of the national loop, which will see third-party operators gain access to Telkom infrastructure, must effectively take place. Icasa has set a deadline of 2011 for this, but should expect Telkom to do everything it can to delay the process.

Exactly how the unbundling is structured is also key and Icasa must make sure that whatever happens is in the best interests of a free market, while protecting what is essentially a national asset.

Another priority issue is that of spectrum allocation that will allow the use of wireless technologies to take bandwidth to a wider market in SA and solve key connectivity challenges.

Allocating spectrum is a potentially messy and complicated task. First spectrum must be freed up.

Sentech is sitting on some valuable frequency ranges and these must be consolidated. The move to digital terrestrial television will free up additional spectrum and add to the pool of what is available.

And then it must be decided what the best way is to hand out spectrum.

Should it be auctioned off, as we have seen in the developed world? What of the smaller players who simply cannot afford to play the auction game? Should Icasa rather identify who it thinks best to be custodians of spectrum? These are all important questions.

And we must get it right the first time.

Other important issues to be dealt with include deciding on carrier pre-select policy, enabling a market of up-and-coming new players and others, all the while successfully enforcing the electronic communications act.

Icasa must manage these processes in line with national agendas, but independent from the department of communications or the influences of Cosatu, which has proven to have a dismal grasp of the sector.

Scrutinise away

The Competition Tribunal, a regulator in its own right, has run down Icasa's abilities to maintain a competitive market. Tribunal chairperson David Lewis said that the tribunal is "far better set up than Icasa to resolve abuse of dominance".

Lewis suggested that collusion in the sector had prevented South Africans from benefiting from cost-saving technologies and that something must be done to strengthen Icasa. He added that a study should be conducted with public inquiry opening the sector up to scrutiny.

Lewis painted a picture of a market dually regulated by both an effective independent authority, and the tribunal.

I hope the right people were listening to Lewis's suggestions, but also that the tribunal lives up to his positioning.

Seeing inquiries into collusion in the market, for example, would be awesome. It may even lead to the likes of interconnect fees between networks being reduced and resulting price reductions for consumers.

Lewis is right that two bodies, in the form of the tribunal and Icasa, must work with aligned goals towards driving competition into the sector. How the two organisations should collaborate and decide on roles is another question, however, and one I am sure Lewis and his people have considered.

There is no doubt in my mind that the tribunal is up to the job, but Icasa is looking less and less like a capable and effective regulator with every move it makes.

However, I say that in the earnest hope that Icasa will prove me wrong, begin to drive transparency and accountability into its operations and take decisive, well-informed and independently considered steps towards preparing a platform for the telecoms market.

Someone needs to step up to the plate and make things happen.

Until then, talk is cheap.

- Fin24.com