Government wants universal access to broadband in SA by 2030 and part of this requires connecting SA schools. The Electronic Communications Amendment Bill, published late last week for comment, reexamines the controversial e-rate, in terms of which educational institutions benefit from a 50% discount for Internet access.
Under the Electronic Communications Act, which the amendment bill will replace when it is enacted, schools and some education and training institutions qualify for a 50% discount on the prevailing rate for Internet access. This includes the cost of connectivity, equipment and any data charges.
This “e-rate” was initially conceived of in 2002 and is seen as a straight discount to schools for services. But according to various industry players, the policy is flawed, not least because there is no mechanism for Internet service providers to recover discounts from upstream network providers like Telkom.
Dominic Cull, regulatory advisor at the Internet Service Providers’ Association, says that because of the current structure of the e-rate, the entire burden of the discount falls to service providers.
“It’s actually a disincentive to ISPs to service educational institutions because they can only provide services at a loss,” Cull says. He adds that under the Electronic Communications Act, it was made clear that there should be a mechanism to recover from upstream providers but that attempts by the Independent Communications Authority of SA (Icasa) to create a suitable regulatory framework have to date failed.
Although Icasa has previously indicated that the e-rate provisions need revision, the issue doesn’t yet feature in its policy framework for coming years.
“The e-rate is well intentioned,” says Cull, “but it doesn’t work in practice. Other mechanisms need to be put in place. If ISPs can get an upstream discount, then they can offer services for diminished profit rather than a loss.” — (c) 2012 NewsCentral Media