The Association of Comms and Technology (ACT) has argued for the inclusion of so-called over-the-top (OTT) service providers like Netflix in the policy and regulatory regimes governing telecommunications in South Africa.
Speaking at the launch of an ACT white paper on promoting equitable participation and sustainable growth of broadband networks and OTT service providers, ACT CEO Nomvuyiso Batyi said OTT companies bypass the traditional legislative requirements that broadband operators are required to adhere to, threatening the sustainability of the industry.
ACT represents South Africa’s six biggest telecoms operators, including Vodacom, MTN and Telkom.
“For the OTT services model to be successful, it requires high-quality and reliable network infrastructure,” Batyi said at an event in Pretoria on Tuesday attended by TechCentral.
“The network operators need to ensure that the infrastructure is upgraded. As a country, we need to go back, from a regulatory point of view, to demonstrate how we will include OTT service providers to help maintain the network infrastructure over the short to medium term.”
According to ACT’s white paper, the only OTT players regulated in South Africa are voice-over-IP service providers. Streaming services for music and video and messaging platforms are not regulated, and ACT believes telecoms policy needs to be updated to include these companies in the regulatory regime.
Central to ACT’s argument is the concept of “Fair Share”: the idea that OTT service providers, as high-bandwidth users of broadband networks, should pay network operators for the capacity they take up on the networks so that they, the operators, have more capital to maintain and upgrade their infrastructure.
Consumers already pay
Opponents of the Fair Share initiative, which started in the EU, argue that there is no need for OTT players to pay network operators because consumers are already paying for the network capacity, or data, required to consume the services.
But ACT said that although it is not arguing for a specific payment regime, network operators are under pressure to provide additional capacity to support OTT services. Yet, if network operators perceive OTT providers are not contributing their fair share, this could discourage further investment in infrastructure to the detriment of the entire ecosystem.
In a country like South Africa, where universal coverage is still an ideal and not a reality, said Batyi, a lack on investment will promote exclusion and contribute to “digital poverty”.
Read: Vodacom, MTN want internet giants to pay their ‘fair share’
The OTT debate is not unique to South Africa. Regulators in the EU and Asia are also grappling with the concept. A report from the Body of European Regulators for Electronic Communications (Berec) shows that ISPs in the region are generally not in favour of Fair Share.
“There is a concern that direct compensation from large content and application providers to large ISPs could endanger the principle of network neutrality and lead to a competitive distortion that puts smaller and medium-sized ISPs at a disadvantage,” said the report.
Another argument against Fair Share is based on the fact that large content providers like Google have made significant investments in subsea cable capacity to the benefit of the entire connectivity ecosystem. This raises questions about whether there is a need for Google and others to pay for terrestrial network infrastructure, too.
ACT has also advocated for a relaxation of regulatory and compliance requirements that limit investment into network infrastructure. By relaxing certain “burdensome” regulatory requirements, telecoms operators would have more freedom to explore partnerships, investment opportunities and innovative service offerings, it said.
The association has encouraged communications regulator Icasa to adopt a more experimental approach as part of its framework for understanding and regulating sustainable “networks of the future”. By using regulatory sandboxes, it argued, Icasa could give operators and OTT service providers the room to experiment with novel business models as they seek workable arrangements for sustainable network utilisation.
“We crafted this paper not as a conclusive position but as a catalyst. We are not here to dictate solutions but to open the floor for robust discussion. Our aim is to strike a balance that is beneficial to the operators and OTT players in a way that is commercially viable and sustainable,” said ACT. – © 2024 NewsCentral Media
Read next: ‘Fair Share’: Should Netflix pay to play in South Africa?
