Broadband hope, but E-rate may be burden

Johannesburg, 26 Jul 2001

The Internet Service Providers Association (ISPA) has reacted with cautious optimism to the announcement that government intends to issue broadband Internet licences, but the body says it may have reason for concern when it comes to a forced discount for schools.

The Ministry of Communications` final telecommunications policy directions, released this morning, states that an invitation to apply for broadband licences will be issued before the end of this year after the government took note of suggestions by various stakeholders.

ISPA co-chairman Myron Zlotnick says the organisation has had little time to evaluate the policy and would still do a full analysis of the implications, but that members would be excited at the prospect of such licences.

"We want to understand a little more what is meant by broadband licences," he says. "We have many members that would probably be interested in applying for such a licence, particularly if it meant we could have our own infrastructure. If it does not include infrastructure, what is the real benefit of having a broadband licence?"

The policy directions define broadband as "a technology solution, wireless and/or cable or both that provides for the transmission of integrated voice, data and video service in a single logical channel between the network transmitter stations/lines and the subscriber".

Currently all data providers must use infrastructure supplied by Telkom.

The directions also state that the minister will define the geographic areas in which broadband is to be supplied in the invitation to apply.

Zlotnick says ISPA will continue to lobby for "reasonable, non-discriminatory" access to bandwidth, especially as and when the Independent Communications Authority of SA (ICASA) issues third-generation (3G) mobile licences and data-rich 1800MHz spectrum.

According to the final policy directions, MTN, Cell C, Vodacom, Telkom, and the second and third fixed-line operators are all to be given access to 1800MHz spectrum by early next year, and all the operators will also qualify for 3G licences. ISPA maintains that this will give the operators an unfair advantage in providing Internet access and other data services.

E-rate could be double taxation

ISPA also intends having a closer look at the proposed education rate (E-rate) discount for schools. According to the policy, schools are to be given a 50% discount on all telephone calls made to access the Internet as well as a 50% discount on the Internet connection fees.

Zlotnick says a recent ICASA decision to not differentiate between Internet access providers (IAPs) and Internet service providers (ISPs) means ISPs are considered the holders of telecommunications licences, and as such will be required to contribute up to 0.5% of their turnover to the Universal Service Agency.

That, he says, combined with cheap access to schools, could be responsible for a negative economic impact on the immature ISP industry.

The government has also proposed establishing an educational network named EDU-NET, which "shall be deemed the holder of a PTN [private telecommunications network] licence", which will link schools and other institutions together. Under currently proposed regulations that would enable schools to communicate with one another using voice over Internet protocol (VOIP), and bandwidth-heavy technology restricted everywhere else except geographic areas with a very low teledensity.