ICASA stifles competition

ADSL South Africa (Broadband South Africa), 20 August 2006

The new ADSL regulations drafted by ICASA (Independent Communications Authority of SA) that were published in Government Gazette No.29141 are likely to stifle competition further.

The published regulations left Telkom smiling and smaller ISPs fuming for good reason. What may come as ‘good news’ (unlimited bandwidth within South African borders, static IP addresses, maximum installation period of 30 days, guaranteed minimum speed and no more bandwidth shaping) might only place a lot of unnecessary financial pressure on the smaller ISPs out there because the pressing issue of pricing was not addressed by ICASA. This means that ADSL pricing will stay at ridiculous high levels in comparison to pricing in developed countries while most ADSL users and the smaller fishes will have to sweat it out or fry in the process.

For good news really to be good news ICASA was suppose to address the issue of pricing first. Pricing is the probably the single foremost factor influencing all other factors in this market. If role players at ICASA were decent enough they would have forced Telkom to bring down their prices to acceptable levels. This would have left smaller ISPs with more room to manoeuvre in giving users the benefits they deserve while not cutting their own throats in the process. Telkom is probably the only ISP that has the luxury of passing on the above-mentioned benefits to their ADSL users (assuming they do) without being crippled in the process. This doesn’t come as a surprise to us because what could really be expected from two government-controlled puppets: The one a dancing circus hippo (or clown for that matter) and the other the party crasher for attending to many illegal parties for one. “Telkom welcomes these regulations and, as a good corporate citizen, the Company will always endeavour to conduct its business within the regulatory framework,” said Lulu Letlape, Telkom’s Group Executive-Corporate Communication. What a lot of nonsense having the audacity to try and fool you out of your God given logic.

“To control quality sounds noble, but how are you able to control a shared infrastructure? I don’t see how; it makes the product uneconomical to provide” Douglas Reed, CEO DataPro.

“This is where the real issue is. The only way consumers will get better services is through competition, and these regulations hamper competition” Geoff Rehmet, IS’ new business development manager.

“Free local bandwidth is great, but there is a cost to that and now you are forcing companies to do provide this for free” Douglas Reed, CEO DataPro.

The message to most ISPs is clear: Adept or die. The message to ADSL users even clearer: You will keep on paying high prices no matter what. This while the biggest bully is still having a field day out there at your cost.