Cautious welcome for Altech ruling

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 03 Nov 2008

Acting High Court judge Norman Davis`s decision to deny communications minister Ivy Matsepe-Casaburri leave to appeal the court`s decision which found in favour of Altech is being treated with cautious excitement.

The ongoing battle between Altech Autopage Cellular and the Department of Communications (DOC) deals with rights under the Electronic Communications (EC) Act that would give value-added network service (VANS) providers the right to self-provide (build their own networks).

The minister`s primary argument is that the EC Act does not give a blanket right to VANS to have their current licences converted to individual-electronic communications network service licence. The licence has become the Holy Grail of smaller industry players, because it will essentially free them from reliance on companies like Telkom and Vodacom.

In his latest judgement, Davis denied leave to appeal on the grounds that the EC Act paragraph dealing directly with individual licences is not as ambiguous as the minister had made out in her leave to appeal document.

Matsepe-Casaburri`s request for permission to appeal states the paragraph in question deals with issuing new licences to new operators, as opposed to the conversion of existing licences. However, Davis dismissed this, saying the paragraph in question explicitly talks about the "conversion" of licences and not the provision of new ones.

According to the judgement, the minister requested to have that paragraph changed. "The learned judge should have set aside paragraph three to the extent that it was ultra vires and should have referred it back to the third respondent [minister of communications] to rectify the unlawful part," the minister`s leave to appeal documents stated.

Changing the Act

The minister`s request to have the offending paragraph changed is one of the primary concerns of the VANS. Vox Telecom CEO Douglas Reed says the company hopes the minister will not go ahead and change the law as a last resort.

Vox was advised several years ago to follow the same legal path as Altech over the last few years. However, Reed says the company realised that any legal action could be a fruitless pursuit, since the DOC could very well change the law after an extended legal battle.

Lawyers have noted before that it is a well known legal tactic by government to appeal a court ruling it does not like and then amend the affected legislation in the hopes it is passed before the issue can be finalised, and then say the courts do not have to rule as circumstances have overtaken the matter.

Vox was one of six providers scheduled for conversion before the legal war began. Others included Verizon SA, M-Web, Internet Solutions, Global Webintact and Fleetcall. "The judgment might be exciting, but it has still delayed the entire process," notes Reed.

Hoping for the best

Internet Solutions (IS), while pleased with the outcome, is concerned the minister will follow the next legal step that is available to her. "We are still mindful of the fact that the minister can still take the issue to the Supreme Court of Appeals," says Siyabonga Madyibi, IS head of regulatory affairs.

He says the entire procedure has been fraught with frustration, and the company hopes the minister will not follow the next legal step, and will instead allow the VANS to continue with business. "We are now in a waiting game to see what the minister will do."

The legal process allows the minister 15 days to petition the Supreme Court. The last ruling saw the minister file her appeal at the last minute and VANS hope the same will not happen again for this ruling.

The Communications Users Association of SA has also welcomed the ruling. `While not everyone will be pleased by the ruling, overall the decision is likely to increase liberalisation and competition in the local telecoms market - and that`s ultimately going to be a good thing for South African business and consumers," it states.