ICASA commits to local loop deadline

By Leigh-Ann Francis
Johannesburg, 6 Jan 2011

This is despite Telkom's warning that the deadline is unrealistic, given the regulatory challenges and lack of clarity holding back the process.

However, the Independent Communications Authority of SA (ICASA) maintains the regulatory process for ensuring the LLU implementation will unfold during the course of 2011, through a full public consultation process, to iron out any “uncertainty”.

The last mile, or local loop, is the copper link between the end-user and Telkom's network, and is currently owned by Telkom.

The rationale behind LLU is to foster competition and reduce telecommunications costs by eliminating large investments by competitors to build their own infrastructure for last mile connectivity.

Telkom, a key player in the process, argues that a number of regulatory issues need to be clarified before the unbundling can get under way. However, ICASA says it is aware of the issues raised by the incumbent and remains confident of the November deadline.

Clarification

The operator's main concern lies in the lack of clarification as to whether the local loop can be considered an essential facility.

“Notwithstanding that the Electronic Communications (EC) Act includes local loops in the indicative list of potential essential facilities, it is arguable whether the local loop is indeed an essential facility,” argues the operator.

“Specifically, the EC Act states an essential facility 'cannot feasibly be substituted' and it is Telkom's contention that a wireless local loop these days is more than a substitute for both voice and broadband communications,” argues Telkom.

But ICASA says it is well aware of the ramifications around the definition of essential facilities vis-à-vis LLU and will address the issue in due course, in line with the set time frame.

“What, however, is critical, from the point of view of the authority, is to ensure access to the LLU is facilitated. In any event, the local loop, as a facility, is already legally obliged under chapter eight of the EC Act.”

Telkom also argued against the lack of clarification around how the authority would conduct and conclude a market review process for LLU. But ICASA explains it will explore the relevance to LLU of section 67 of the EC Act, in terms of significant market power and related numbers.

While ICASA has renewed its commitment to ironing out the necessary regulations before November, senior Frost & Sullivan analyst Vitalis Ozianyi remains sceptical of the actual implementation of the regulations this year.

Complicated process

Ozianyi maintains that, despite the issues raised by Telkom, it is possible the regulations concerning LLU will be in place this year still.

However, he questions whether the regulations will have the necessary clarification to begin the implementation of LLU this year.

ICASA councillor Thabo Makhakhe explains that, while the authority is committed to having resolved the regulatory issues, and the possible publication of LLU regulation before November, the actual unbundling process will take time.

Makhakhe would not indicate how long the implementation would take, but stated it is a complicated process. He pointed to the 10-year period it took British Telecom to unbundle its local loop.

Ozianyi argues that other LLU-related issues, such as the costs of leasing the local loop, as well as maintaining the infrastructure, will need to be addressed.

As such, Ozianyi explains that the implementation will be slow and incremental, with benefits being realised only in later years.