Commission turns up the heat on Telkom - TechCentral

Commission turns up the heat on Telkom

Adv Martin Brassey

Despite Telkom’s claim that certain alleged violations of which it stands accused are no longer happening, there “is still the propensity for them to reoccur” and “an interdict remains both competent and desirable”, the Competition Commission told the Competition Tribunal in Pretoria on Monday.

The commission has referred a complaint of alleged anticompetitive abuses by Telkom to the tribunal and asked it to impose a maximum allowable fine of R3,5bn against the company.

The case stems from an investigation conducted by the commission in 2004 that found Telkom abused its dominance by charging excessive prices, refusing to allow other operators access to its “last-mile” infrastructure and engaging in price discrimination.

The tribunal’s hearings, which began on Monday and which run until 28 October, and then again between 1 and 9 December, could see Telkom fined as much as 10% of it’s 2003 turnover if the regulator finds against it.

The commission says it intends arguing that Telkom “had a statutory monopoly over the backbone and access lines” of SA’s communications network.

It will argue that Telkom, in an effort to maintain its monopoly, included provisions in contracts with telecoms services companies — licensed as value-added network service (Vans) providers — and end users that it believed would “shore up its conception of what the regulatory regime would entail”.

It will also argue that if a party failed to sign or contravened a contract with Telkom, then the company would freeze the service.

Also, it says, it will make the case to the tribunal that Telkom decided Vans were not allowed to supply a “plurality of services”, and that if they did help end users to utilise what Telkom considered to be a private telecoms network, they would simply be an agent and “the end user would have to deal with Telkom directly”.

Adv Martin Brassey, making the opening remarks for the commission, says these companies “were thus relegated to position of agents rather than principals”. He says it is difficult to measure the effect of this in empirical terms, but that it is “nevertheless clear that this gave Telkom a sizeable advantage”.

“Telkom took its interpretation of the legal framework, whether legal or not, and sought to incorporate clauses based on this interpretation into its contracts” with Vans providers. This prevented subscribers to these companies’ services from providing a “one-stop-shop solution”.  — Craig Wilson, TechCentral

See also: Telkom to tango with tribunal

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