Whatever happened to cracking open Telkom’s last mile of copper cables into homes and businesses to rival broadband operators? The industry regulator has gone silent on the issue, leaving industry players wondering whether local-loop unbundling has quietly been shelved.

The Independent Communications Authority of South Africa (Icasa) had promised that the first and most basic form of unbundling, something called “bit-stream access”, would have taken place by November 2012. That date slipped by with no action from the regulatory authority and no new deadline being set.

“It’s like a black hole,” says Internet Solutions regulatory affairs head Siyabonga Madyibi of the lack of information about the local-loop unbundling process. “All we’ve seen is the new draft of the minister of communications’ broadband policy.”

Madyibi had hoped that minister’s document would have provided Icasa with fresh deadlines for unbundling, but it didn’t, he says.

Internet service providers and consumers had expected that unbundling, even in its simplest form of bit-stream access, would have helped bring down the cost of fixed-line connectivity and helped foster greater demand for fixed broadband services.

Telkom has long warned that any planned intervention by Icasa must be counterbalanced by a recovery scheme for the “access-line deficit”, the sum of the money it claims it loses on every fixed-line in service.

TechCentral last year revealed internal Telkom documentation from 2011 that showed it believed that this deficit amounted to a staggering R2,2bn/year. The documents claimed that it cost the company R256/month on average at the time to maintain each fixed line in service. It said the scale of the impact of unbundling would depend on a number of variables, including the form of unbundling that was implemented and the degree of cost recovery allowed by Icasa. It said the revenue lost could be anywhere between R200m and R2,2bn annually.

Last October, Telkom told TechCentral that it was in discussions with Icasa about an access-line deficit recovery scheme, which it described as a precursor to the implementation of bit-stream access.

Telkom vs Neotel
Mystery continues to surround the outcome of last May’s victory by Neotel over Telkom at a hearing of Icasa’s complaints and compliance committee. The result appeared to open the door for Neotel to gain access to its rival’s last-mile infrastructure.

The committee found that Neotel’s 2010 request for access to Telkom’s exchanges under so-called facilities leasing regulations was valid. It found that Telkom’s response to Neotel’s request for access to the Benmore and Rosebank telephone exchanges in Johannesburg was “inadequate”.

Last month, Icasa faced pointed questions in parliament about its progress with local-loop unbundling. The authority said draft regulations had been compiled and would be released soon, but that a new target of March 2014 had been set for introducing bit-stream access.

Icasa hinted that, under bit-stream requirements, it need not create specific regulations, as those dealing with facilities leasing were sufficient. This, however, would not be true of more aggressive forms of unbundling.

Icasa councillor Nomvuyiso Batyi told parliament that the authority had considered the compliance committee’s ruling and was implementing it.

In the meantime, Internet service providers have been left guessing as to what’s going on.