/ 18 May 2018

Icasa regulations fail to deliver

(John McCann/M&G)
(John McCann/M&G)

What first appeared to be a grand stand against excessive charges by mobile networks, the amended regulations gazetted by the Independent Communications Authority of South Africa (Icasa) are instead a damp squib.

Come June 8, mobile networks must have implemented changes to the End-User and Subscriber Service Charter Regulations of 2016, as required by the regulator.

The amendments require service providers to send usage-depletion notifications when data, voice or SMS are 50%, 80% or 100% depleted. Also, customers cannot be charged out-of-bundle rates if they have not explicitly consented to it. And service providers must allow customers to transfer data to other users if they are on the same network. Unused data must also be rolled over before its expiry date, although it is left up to the networks to decide how they will do this.

The operators have bemoaned the financial cost and say it will be impossible to meet the deadline. Icasa is being criticised for under-delivering on the regulations, despite extensive consultations.

The regulator abandoned its efforts to extend the expiry period for data and none of the amendments deals meaningfully with the price of data in South Africa, which remains relatively high.

“It’s a classic case of Icasa having over-promised and under-delivered,” said Dominic Cull, Internet Service Provider’s Association regulatory advisor.

Koketso Moeti, the founder of lobby group Amandla.mobi, said the group welcomed the changes, such as the depletion notifications, which would benefit low-income users who buy smaller bundles.

But she was disappointed that the details of roll over of data would be left up to the networks, “who we know have over the years not acted in good faith, especially when it comes to low-income consumers”.

Cull said that “what deal do they give you in rolling over” would “become one of the things consumers will look at”, and this might increase competition in the market

But the biggest disappointment is the failure to extend the validity periods for data. Icasa had proposed extending it to three years but instead scrapped it.

The three-year proposal was drawn from a section of the Consumer Protection Act but the regulator was warned that that was beyond its jurisdiction and it could face legal action if it tried to change it. Instead, the matter has been referred to the National Consumer Commission (NCC) to try to enforce compliance with the Act in this regard.

The NCC said it was currently studying the ICASA regulations and would thereafter decide on the way forward with the data expiry issue.

“In studying the regulations, one of the key things we are looking into is whether there are any parts of the Icasa regulations that are in conflict with the provisions of the Consumer Protection Act,” the NCC said.

“It’s a pretty curious situation … if the CPA has a provision, which is law, then surely everyone must comply with that,” said Cull.

The commission had attempted to tackle the issue in the past but was met with fierce counterlobbying by the network, he said. “There is a big grey area there. But it really is for the NCC to sort out.”

Although Amandla.mobi did not support a three-year validity period, which it believed might stifle competition, it said it could not support the regulation in its current form. Icasa should rather have focused on the roll-over of data and put it more in line with SIM card validity periods of 90 to 120 days on most networks, Moeti said.

#Datamustfall #fail

Cull said the amended regulations were one leg of the regulator’s three-pronged “cost to communicate” programme, although these regulations don’t really deal with the pricing of data. Although the amendments did not address costs, they at least empowered consumers to some degree and rolled-over data would translate into some savings, he said.

Resistance to data prices gained momentum almost two years ago when consumers joined the #Datamustfall campaign, lobbying for the cost of data in South Africa, particularly mobile data, to come down.

Research ICT Africa found South Africa ranked 25th out of 49 countries for the most expensive average cost of one gigabyte of data. According to Ellipsis, the average prices of 2016 and 2017 were at least 42% cheaper than the average prices in 2010. But the average price of the 500 megabyte category (the bundle of choice for the majority of low-income consumers) in 2017 was 33% higher than the 2016 average.

Charley Lewis, an independent ICT analyst, said the End-User and Subscriber Service Charter Amendment Regulations were really a code of conduct on how to deal with consumers.

“The regulator came under fire for seemingly using it as a back door to deal with price,” Lewis said. “The correct way to do this is for Icasa to pick it up as a pricing issue as it did in tackling high call-termination rates.”

It was arguably one of Icasa’s most successful interventions in the past few years, Lewis said. As with termination rates, “Icasa must do a market review on pricing, divide the market into various segments, decide where there is not sufficient competition and impose pro-competitive interventions,” he said.

Meanwhile, the Competition Commission, a statutory body, is carrying out its own market inquiry into the high cost of data, which is likely to be finalised in August.

According to Burton Phillips, a senior associate of Webber Wentzel, the outcome of the inquiry would be a set of recommendations, which could include amendments to legislation, regulations and policies, and spectrum allocation.

Cull said he suspected the commission only got involved because of frustration with Icasa’s pace. He added: “The current competition process is useful as a fact-finding mission but, unless breaches of the competition law are uncovered, there’s not much more they can do.”

Lewis said Icasa and the commission had different jurisdictions forcompetition law. The Electronic Communications Act allowed the regulator to enhance competition in segments where it was lacking. The commission targeted anti-competitive behaviour. When there was an overlap, there was a memorandum of understanding, Lewis said.

Best-laid plans

Four cellphone networks — MTN, Vodacom, Cell C and Telkom Mobile — said they were assessing the amended regulations and were trying to implement them by June  8, though both Telkom and Cell C expressed concern about the tight deadline.

The 30 days stipulated by Icasa to implement the changes was not achievable, “even with the best will in the world”, said Graham Mackinnon, Cell C’s chief legal officer. “We advised Icasa of this fact but they proceeded to issue the regulations with this time period still included.”

He said Cell C had already complied with some of the provisions but the rest required many system configurations, followed by testing, before they could be implemented.

A Vodacom spokesperson said the company was still working through some of the details, particularly the technical implementation, to ensure that its systems could accommodate the changes.

“Icasa has reverted with a more balanced outcome that doesn’t undo much of the good work that has been done in recent years to drive data prices lower,” the spokesperson said.

Telkom said it was encouraged by the direction of the regulations, which enabled it to continue to differentiate its products and provide subscribers with cost-effective choices. The company said it was “making every effort” to meet the deadline, although “there are a number of products and systems” affected.

Unintended consequences spark panic

By trying to remedy the ills of the cellphone networks, the End-User 2nd Subscriber Service Charter Amendment Regulations have created problems for other, unsuspecting service providers.

The Independent Communications Authority of South Africa (Icasa) has done so by “applying a broad-strokes approach to a narrow problem”, said Dominic Cull, the Internet Service Provider’s Association regulatory advisor.

“Outside of mobile networks, there is a degree of panic,” he said. Compliance would be expensive and take time, and there was little value in doing it, he said.

For example, the amendments require that it must be made possible for data to be transferred between users of the same network. It was no problem for cellphone operators because their users have the same service provider.

But the regulation applies to others, such as internet service providers, which is complex.

Two end-users might both access the internet through the Vumatel network but one could be with MWeb and the other with Afrihost, Cull said.

One of the amendments concerns consumer education and awareness, which specifically requires licensees to have campaigns to educate end-users on the use of smartphones. Icasa clearly had mobile networks in mind, but internet service providers would also have to comply with it, said Cull. — Lisa Steyn