On November 30 the Telecommunications Amendment Act was promulgated. Chris Yelland explores some of the issues with Icasa’s Wojtek Skowronski and Siyabonga Madyibi
What’s the Act provision on number portability and carrier pre-selection? What will change and when?
Number portability refers to the ability of consumers to retain their numbers if they switch from one provider to another. As such, customers of Telkom will be more willing to switch to the second network operator on the basis of service and price, rather than stay with Telkom simply to avoid being inconvenienced.
Carrier pre-selection and number portability facilitate customer choice and allow for fair competition in a situation where a dominant incumbent exists. In effect, carrier pre-selection will allow consumers connected to one network to connect to another network by dialling an override code. Thus if the second network operator has a weekend special, even a Telkom customer can take advantage of it at his/her will.
In this regard the Act sets out that carrier pre-selection should be introduced no later than December 2003 and number portability in 2005.
Fixed mobile debate, what does it really entail?
The debate around fixed mobile has been clarified to some extent by the proposed legislation. Fixed mobile has been defined as “a service provided by the holder of a public switched telephone service (PSTS) licence of an under-serviced area licence that permits a customer of the licensee to access the PSTS licensee and obtain telecommunication services from such licensee from either a fixed point or while in motion within the local exchange area, but shall not permit call handover”. The new definition is a shift from the previous definition in the draft Bill, which was basically wireless local loop.
What this new definition means is that within a limited geographic area, customers of the fixed-line operator will be able to have the benefits of mobile cellular telephony at fixed-line rates. The effect is what the director general of the Department of Communications at one point referred to as a “souped-up cordless phone”. Fixed mobile is not a separate licence. The PSTS and under-serviced area licensees will be able to provide this service in terms of their licences and will be placed at a further advantage in that they will have access to the coveted 1800 MHz spectrum.
What are the implications of third-generation technology (3G) and the 1800 MHz assignment for spectrum management ?
The challenge for South Africa is to ensure that spectrum allocation is fair, equitable and will drive prices for access to service down for consumers. Spectrum allocation has gained considerable attention over the past few years with billions of dollars being spent on 3G licences, which have yet to show returns.
In South Africa, MTN and Vodacom last year requested access to 1800 MHz spectrum and the Independent Communications Authority of South Africa (Icasa) denied their request for competitive reasons. It was envisaged that the third cellular operator would have access to 1800 and, if necessary, 450 or 900 MHz spectrum. Only after the new entrant was on its feet would Icasa reconsider allocating 1800 to the incumbents.
The amended legislation now provides for 1800 spectrum for all the current mobile and fixed-line operators. In this regard Icasa is finalising the migration of government bodies, such as the defence force, out of the 1800 MHZ spectrum in terms of the spectrum frequency plan (SABRE 1) and preparing for the allocation of 1800 MHz to the named stakeholders.
However, the prices for 1800 MHz and 3G spectrum have yet to be set and will be determined by the minister. It has been clarified though that the fees will not be once-off, but will be staggered to prevent the levying of large up-front fees, which could adversely affect determining the spectrum pricing method.
At this point, there is no provision in the Bill for access to 1800 MHz and 3G for other players, although they may apply in terms of normal radio frequency applications.
Are there any changes to the second national operator’s licensing process?
A victory for Icasa during the deliberations was the decision of the Portfolio Committee to streamline Section 35 of the Telecommunications Act by removing the intended recommendation stage. During the third cellular licensing process, the intended recommendation stage which involved Icasa making an intended recommendation, receiving representations from applicants on the recommendation and reconsidering the recommendation based on the arguments of the “losing” bidders took about four months. Icasa found that there was little value in the process and with the second network operator, if we intend to license by May this year, we can still afford to include the intended recommendation in the process. As such, based on the proposed amendments, Icasa will evaluate the bids and representations on the bids, and will thereafter make a recommendation to the minister on the successful applicants. The minister can then reject, accept or refer the recommendation back to Icasa for further consideration.
In terms of applications for Section 34(2) or “major” licences, it has been indicated that due preference will be given for applications with up to 30% highly disadvantaged individuals’ participation, in particular women. In the case of the second network operator, this will mean that the pie needs to be divided between the black empowerment entity, Transtel and Eskom, and a foreign partner. Exactly how this will be divided has not yet been established. It will be dependent on several factors, including the valuation of Transtel and Esi-tel, the level of interest from international players and the level of participation that black empowerment entities will be able to achieve. It is important to note, however, that the foreign-ownership restriction has been lifted.
Can you clarify the relationship between Telkom and valued added network services (Vans), virtual private networks (VPN) and private telecommunications networks?
In the past, bound by a vague description of Vans in the Telecommunications Act, Vans and Telkom have gone back and forth to court over facilities-leasing disputes and disputes around the sharing of bandwidth.
In terms of the Act, Telkom is required to provide facilities to the Vans operators, unless it is “unwilling or unable” as determined by Icasa. However, there have been several disputes where the Vans providers have complained that Telkom is “switching them off” based on suspicion that they are using the bandwidth improperly. There has also been much dispute over the way in which Vans use their facilities, with Telkom believing that it cannot share facilities or bandwidth among its customers, which is, in fact, core to the business of Vans.
Icasa conducted an enquiry for more than a year into the definition of Vans. The proposed legislation now contains, in essence, that definition for Vans proposed by Icasa and clarifies that Vans can provide services to one or more customers concurrently. Vans are defined in an open-ended way as anything that adds value to the public switched telecommunications services. This leaves Icasa with room to interpret that definition further.
On the issue of whether Vans can provide virtual private networks (VPNs), the policy states that they can, although VPN is not defined in the Bill. Icasa welcomes this approach as we found in our consultative process that a VPN is software that could be provided by either a private telecommunications network or a Vans licensee. Thus, our ruling may be enforced.
Also encouraging is the fact that Icasa’s private telecommunications network definition was accepted.
Any other general comment on the Amendment Act?
The Bill provides further clarity in the sector through general definition and the insertion of provisions on regulatory process. The definitions of public switched telephone service, mobile cellular and resale should clarify the role of telecommunication licensees in the sector. The granting of general regulation-making powers to Icasa is a significant improvement to the regulatory framework in that this confirms that Icasa may make regulations on any matter affecting the industry and not only those issues mentioned in the Act.
Wojtek Skowronski is Icasa’s general manager: engineering services and Siyabonga Madyibi is acting head of department: legal. This article was published in the January 2002 issue of Elektron, a journal of the South African Institute of Electrical Engineers