Stubborn Minister ‘Harms Consumers’

ACTION by Communications Minister Ivy Matsepe Casaburri to prolong a legal battle over the issuing of telecoms licences is not only harming consumers, but is based on deeply flawed reasoning, an industry lawyer says.

The minister is challenging a high court verdict that gave voice and data carriers the right to build their own networks, and which promised massive liberalisation for the sector. She has also applied for an interdict to prevent the industry regulator from issuing the necessary licences, saying a free-for-all would scupper her policy of managed liberalisation.

But her action would simply entrench the high prices and lack of competition hurting SA's economy and its citizens, said Mike Silber, regulatory adviser for the Internet Service Providers' Association of SA. "The minister is not acting in the interests of the telecoms industry as a whole, nor of the SA economy, nor its citizens," he said yesterday.

The judgment delivered in August promised much greater competition by letting about 300 value added network service (Vans) licence holders build their own networks.

The minister is challenging that verdict and claims that the Electronic Communications Act (ECA) allows only the Independent Communications Authority of SA (Icasa) to accept applications for the new licences after she issues a policy directive. That claim was flawed, Silber said, as the judge had not ruled on the issuing of new licences but on the conversion of existing Vans licences into the new build-your-own licences.

Vans licensees have had the right to provide their own facilities since 2005 if the now defunct Telecommunications Act was read in conjunction with a ministerial determination of 2004, Silber said.

That right was carried over into the ECA, despite the minister's attempt to "clarify" the act and nullify that clause by issuing a press statement two days before it took effect, he said.

Twelve years of "mangled liberalisation" had resulted in a lack of choice or competition and high prices for consumers and businesses. Yet the minister still cited managed liberalisation as an excuse for her actions to protect vested interests in the industry by delaying further competition. If the minister wished to continue with that restrictive policy, then an end point should be stated so the industry and consumers knew when to expect relief.

The minister's decision to fight on has been condemned by the Democratic Alliance, Inkatha Freedom Party and numerous companies, including Altech, which instigated the original legal action questioning Matsepe Casaburri's processes.

What has incensed the industry is that the licences would not trigger a frenzy of unsustainable competition, as only a handful of players could afford the estimated R1bn needed to build a national network.