Spectrum standoff must end - TechCentral

Spectrum standoff must end

marian-shinn-180Government’s secret plans for a national wholesale wireless network, which will have exclusive access to high-demand spectrum, must be withdrawn from the white paper on information and communications technology being prepared for cabinet approval and be subjected to public scrutiny in a separate process.

Communications regulator Icasa’s high-demand spectrum auction must be allowed to proceed, after the invitation to apply (ITA) to participate in the auction has been amended to lower the costs of participation and some of the conditions have been revised and corrected.

The spectrum standoff between Icasa and telecommunications & postal services minister Siyabonga Cwele cannot continue delaying the assignment of desperately needed high-demand spectrum. South Africa’s economic growth, service delivery initiatives and pending economic rating cannot be held to ransom by a secret process that seeks to insert crony capitalists into the lucrative mobile broadband market.

The secret plan for government’s wireless open-access network (Wona) is seemingly loosely based on the unproven Mexican experiment with open-access wireless networks may well be unconstitutional and unaffordable, and is likely to be legally challenged all the way to the constitutional court should government try to implement it.

I maintain that it is the minister’s attempt to insert his Wona plan into the white paper so it would be confirmed as government policy that is behind the surprise 15 July gazetting by Icasa to proceed with the spectrum auction it has been working towards for the past three years.

Icasa wanted to get the spectrum assigned efficiently and transparently before the white paper inhibited it and bogged down the sector in years of litigation. It may well be one of the last bold and independent acts Icasa makes before government restructures it to remove its chapter 9 status and gives the minister his wish to have direct control over network licensing and policy.

While the idea of a national wholesale wireless open-access network has been discussed through the ICT policy review process, its desirability and detail about it have not been put to the sector for discussion.

The lack of clarity on financing, management and operating infrastructure for this planned network prompts me to request this plan be withdrawn from the white paper until the minister’s model has been thoroughly and publicly debated.

From discussions with ICT sector players during the past few weeks, I have gained some insight into the minister’s planned network. It will be private-sector-owned by those who choose to join it. Participation will not be restricted to network licence holders, meaning experience in the sector is not a pre-requisite. There is no indication of the nature or value of the investment any of these participants will be expected to bring to the network.

Over-the-top service providers, such as WhatsApp, along with Internet service providers and Google, may be invited to become members. The more than 400 holders of electronic communications network service licences will be expected to join the network if they want access to spectrum.

Spectrum will be treated as a public good over which no one will have ownership and that users can share. It is envisaged that all available spectrum in South Africa will one day be the preserve of the wholesale open-access network to assign.

A planned wholesale open-access network could have grave consequences for Vodacom and other big operators

A planned wholesale open-access network could have grave consequences for Vodacom and other big operators

It is claimed that the network cannot co-exist with large, licensed, market-driven operators, begging the question of what future the minister foresees for MTN and Vodacom should it be established.

This network will have to operate — on a cost-recovery basis — on the significant wireless communications infrastructure currently owned by MTN and Vodacom. Should these companies want access to the high-demand spectrum currently in play, they will need to fold their operations into the open-access network.

There is no detail of how this wholesale network will acquire or use MTN and Vodacom’s extensive, multibillion-rand infrastructure or how any network expansion will be funded, managed or maintained in this high-capital cost environment.

This plan, while offering some innovative ideas on how to include smaller players into the mobile network market, has serious repercussions for infrastructure investment and wholesale network competition so must be robustly and publicly debated.

Unless this matter is promptly resolved, South Africa’s marginalised communities will be further left behind as the digital divide expands to exclude them from e-government services, e-education, employment and entrepreneurial opportunities.

And, while South Africa’s connected communities will continue to be ingenious in exploiting opportunities they identify and grasp via the World Wide Web, they will be unable to do it at the performance level of their international competitors because the bandwidth and speed of access will not be there to support them.

  • Marian Shinn is a Democratic Alliance MP and shadow minister of telecommunications & postal services

4 Comments

  1. The elephant in the room is price. MTN and Vodacom have poor track records when it comes to competitive data pricing. Price is the main factor that limits internet growth in South Africa, not spectrum availability. And price has been a problem even before spectrum became constrained.

    An auction seems like a surefire way to entrench companies that already don’t care about reducing data costs.

  2. Marian Shinn on

    An auction is the only transparent and fair way to do this – but the conditions of the auction need to facilitate the entrance of new operators and facilitate a realistic competitive process. But, there is no transparency on government’s envisaged wholesale network and how it plans to award spectrum – now and in the future. The Minister favours a closed-bid process which is fertile ground for corruption and is no guarantee that crony capitalists will lower the costs of communication. Will there be competition on the wholesale level? From what I hear this is unlikely so OTT service providers and consumers will have little, or no choice. And the network will have no incentive to keep prices low.

  3. Those are fair questions, but I disagree that an auction has any inherent transparency. The process ICASA has been following thus far pretty much negates any such claim. In fact, your comment criticisms can easily be leveraged at an auction as well.

    Your position would make sense if a) we could trust ICASA and b) we had healthy competition to keep the duopoly in check. Neither those conditions exist. Yet consensus seems to be that we can trust those parties more than the telco ministry. This is foolish and reactionary.

    I’m not saying we should blindly go into a wholesale arrangement. But an auction orchestrated by a compromised regulator and most befitting the incumbents (especially Vodacom, which has the network and war chest to dominate the auction, as well as zero history of fair pricing) is dangerous. At least the Telco ministry is doing something for a change. After twenty years of ICASA non-action and duopoly market strangling, I think we should be far more open about alternatives.

    Spectrum isn’t going to solve the pricing problem. We’ve had high prices long before spectrum was a huge issue. The problems we face are institutional and mostly lie with an inactive ministry, a toothless regulator and two networks that have run roughshod over any public interest.

    Unless you are willing to stick your neck out. If the auction goes ahead and we still find ourselves in a pricing quagmire, are you willing to resign your post as Shadow MP?