ICASA urged to address ADSL pricing

Johannesburg, 20 Feb 2006

Industry players have called for a firmer stance on pricing regulations, as SA`s telecommunications regulator prepares to hold public hearings into its draft ADSL regulations, aimed at creating a more competitive ADSL market and protecting the consumer.

While the Independent Communications Authority of SA (ICASA) has yet to publish dates, general market perception is that the hearings are imminent. The closing date for the submission of written comments was 19 January and it is understood that ICASA is now seeking a swift conclusion to the process that was started in February 2004.

The draft regulations, published in November last year, place emphasis on consumer protection, calling for a model that would enable subscribers to top-up or buy extra bandwidth, once they`ve reached their monthly cap, without having to purchase a new user account.

The proposed regulations also call for the removal of caps on local bandwidth and for the minimum 10GB cap on all other bandwidth, while network operators will be obliged to inform subscribers, at all time during the course of a month, of their bandwidth usage until the monthly threshold has been reached.

Competitive environment

The regulations also focus on issues of ADSL throughput speeds, port prioritisation, contention ratios and service level agreements, among others. However, industry experts have commented that more emphasis should have been placed on pricing.

MyADSL founder Rudolph Muller believes most interested parties will likely call for better wholesale prices in a more competitive environment during the public hearings.

"I think this [the draft regulations] is a good start on which to build, but a bit more work needs to be done to protect consumers. The regulations don`t stipulate pricing, but I feel they really should include specific price caps," he says.

"We strongly support competition, but in a monopolistic market, there needs to be strong regulation."

Muller speculates that most of the submissions made are likely to have large emphasis on the pricing issue.

"In the final version of the regulations I would expect to see some specific reference to pricing, but whether these price limits fall within international standards remains to be seen."

Terry White, Marketworks business and technology advisor, says the monopoly forces South African broadband consumers to pay twice for their broadband - once to Telkom and again to the Internet service provider.

"My opinion is that there are three main issues to be considered: price, price, price. Elsewhere, broadband is regarded as a cheap option, but not here. I wonder why?

Monopoly

"Another concern is the structuring of the ASDL pricing which is exploiting the monopoly again - the 'shaping` charge penalises VOIP. Why?"

Finally, White says, the non-customer-focused nature of the Telkom ADSL offering is a problem, adding that when other providers of ICT services provide a solution, they have service level agreements to govern the required service.

"Telkom doesn`t seem to see the need to actually provide competitive services for their expensive ADSL offering. Last week, I had the misfortune to phone the ADSL help-line. After waiting 20 minutes for the call to be answered, I asked the consultant if they were really busy, given how long I was kept waiting. He replied: 'No we`re very quiet at the moment.` If the hearings allow competition to operate properly in the ADSL space, I predict that Telkom`s 'quiet` will become 'deathly quiet` in the future."

Telkom, which seems to be the central focus of the regulation process, would not comment at this stage.

"We`ve made submissions and we are currently awaiting the start of the hearings," says Telkom spokesperson Candice Jeffreys.

Diane Mgoasheng, ICASA`s senior manager of the Consumer Protection Department, explains that the hearings will commence as soon as the ADSL committee sets a date.

She revealed that 83 submissions were received regarding the draft regulations, 13 of which will be presented verbally at the hearings.