The Internet industry says it continues to participate in public hearings on the Telecommunications Amendment Bill currently underway before the Parliamentary Portfolio Committee on Communications despite a high probability of needing to turn to the Constitutional Court for relief.
Mike van den Bergh, chairman of the SA Value-added Network Services Association (SAVA), says the industry has several concerns about proposed changes to the Bill, but the restriction on the use of voice over Internet protocol (VOIP) is most likely to see SAVA challenging the Bill legally.
"Realistically speaking we hope to see changes in position on the definition of VPNs [virtual private networks] and some other matters," he says. But while the organisation continues in the hope of changes at the parliamentary level, he believes the courts will probably be called on soon.
"We can`t afford a situation which effectively jeopardises the entire [value-added network services] industry," he says.
The amendment Bill defines VPNs as a service offered through a public network operator such as Telkom. It also restricts VOIP to use by Telkom, the second national operator due next year, and small enterprises in areas with very low teledensity.
The restriction is seen as a move by government to increase the value of Telkom ahead of the public listing of the company and to make an offer for the licence to create a second operator more attractive.
Van den Bergh says VOIP provided by value-added operators would not endanger the profits of public operators, despite this being apparent as a basic tenant of policy-makers.
"We are not trying to become another network operator," he said, speaking today at the Contact Summit in Sun City. "We would be quite happy with restrictions similar to those on PTNs [private telecommunications networks] and have one break-in or one break-out from the PSTN [public switched telecommunications network]."
He says such concessions have long been accepted in the case of PTNs, and it is a short step to extend that to data providers.
He also believes the losses an operator such as Telkom would suffer from reduced traffic on its network would be offset in other areas. He says VOIP traffic makes more effective use of existing infrastructure but still has to use the backbone of the national operator, increasing traffic and resultant revenue. "There is also the parallel to the ISP industry. This kind of service will mean more traffic on the PSTN."
Legal grounds
SAVA sees the mainstay of a Constitutional challenge as the discrimination which would result from restricting VOIP. Under a 1997 ruling by what was then SATRA, the SA Telecommunications Regulatory Authority, Internet protocol (IP) services are seen as part of the value-added network sphere of regulation. If that ruling holds, Telkom and the SNO would have to be issued with VANS licences permitting VOIP, while the VANS licences of other players deny them the same right.
Edwin Thompson, co-chairman of the ISP Association (ISPA), points to the unconstitutionality of expropriation of property.
"The Bill could be seen as expropriation because it talks about taking away rights without ever mentioning compensation."
Apart from losing the rights to operate VPNs and other services, Thompson also interprets the amendment as potentially giving Telkom and the SNO ownership of physical equipment owned and in use by ISPs, including customer premise equipment and sections of network infrastructure.
Thompson says there has been no official ISPA decision but that he foresees the organisation as a co-applicant should SAVA go to court.
Balance of probability
The chances for any changes to the Bill are constantly decreasing as the end of the parliamentary season approaches. Government has committed to a public listing of Telkom before the end of the fiscal year in February 2002 and the new legislation needs to be in place for such a listing.
If adopted by Parliament, the amendments would likely stand until overturned by the Constitutional Court despite any legal action which may be underway, enabling the listing.
However, such a legal battle could be a protracted and difficult affair. In constitutional matters the burden of proof is on the applicant.
But organisations such as ISPA and SAVA believe there is no doubt of the demand for VOIP services and that both customer demand and inevitable technological convergence, as well as the future survival of their businesses, will force the confrontation.
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