Discussions between Telkom and the Independent Communications Authority SA (Icasa) ground to a temporary halt in Sandton on Wednesday after the telecommunications operator adopted an aggressive stance regarding local-loop unbundling and attacked the authority’s handling of public hearings into the process.

The hearings were halted temporarily by Icasa councillor William Stucke so that the authority could consult with Telkom in private.

Opening proceedings, Andrew Barendse, Telkom’s group executive for regulatory affairs, immediately went on the offensive, warning unbundling was “possibly the most intrusive and far reaching form of regulatory intervention”.

Barendse said it was important to note than when unbundling was introduced in US in the mid-1990s and in Europe in the early 2000s, there were “different market conditions” and “different instruments in place”. These countries also had almost universal access.

He said SA had neither universal access to the Internet nor equivalently mature markets and this had to be factored into considerations for unbundling.

“There is near universal recognition that the implementation process is complex,” said Barendse. He added that it was a costly process and could be counterproductive and fail to achieve policy objectives.

He cautioned against unbundling, saying the process could not be “left to the speculations of other parties or the potential for regulatory failure”.

“Telkom is the biggest investor in network infrastructure and employer in the telecoms sector. Telkom has been one of the biggest contributors to government from the telecoms sector. It is our considered view that local-loop unbundling will put this all at risk.”

Thamsanqa Kekana, Telkom’s senior legal advisor for regulatory affairs, said the company had “made very compelling arguments as to how this enquiry [into unbundling] ought to be conducted” and that Icasa had expanded the scope of the enquiry to include structural separation of Telkom’s business and the possible redistribution of the company’s assets.

Kekana said the commercial viability of Telkom was at stake. He said in the absence of a clearly prescribed procedure, the scope of proceedings and questions posed to Telkom should be limited to the ground covered by the original discussion document.

“Telkom is in a closed period, so you will forgive us if we choose not to answer questions that would require us to divulge information that may result in our having to explain ourselves to the listing authorities,” said Kekana.

He added that Telkom did not “wish to curtail the extent to which the panel wishes to engage in probity”.

Icasa’s Stucke then called a halt to the public discussion and asked Telkom’s representatives to meet with the regulator’s representatives in private.

The public hearings resumed after a 40-minute private consultation between the two parties. — Craig Wilson, TechCentral