Unbundling the local loop — introducing greater competition and regulating wholesale pricing in telecommunications access networks — is the “single most important regulatory intervention” available to lower the cost of broadband in SA.

That’s the view of the Internet Service Providers’ Association (Ispa), which was presenting its views at the Independent Communications Authority of SA’s (Icasa’s) unbundling public hearings in Sandton on Wednesday.

Ispa representative Dominic Cull says there is an “overwhelming case” for local-loop unbundling as the fixed-line access network constitutes the most significant “bottleneck” to bringing down broadband prices.

Cull cautions Icasa should not entertain the merits or demerits of unbundling as part of the public process as it’s already a policy decision taken by government. “The decision rests with the policy makers and, as things stand, that decision has been made,” he says.

Ispa also want the unbundling discussion to extend to fibre-optic and wireless networks, rather than focusing exclusively on providing companies with access to Telkom’s “last-mile” copper infrastructure.

“Ispa proposes that Icasa provides a framework for unbundling of access networks on a technology-neutral basis,” Cull says. “At the same time, Icasa must recognise there are different challenges in unbundling different facilities making up different access networks.”

However, he says Ispa does not intend to “detract in any way from the importance the unbundling of the copper local loop, which is under the control of Telkom”.

“It remains a significant bottleneck for delivery and remains under the control of a monopoly provider,” Cull says. “We are promoting parallel processes for the different forms of [network] facilities.”

Cull says Ispa would like Telkom to reconsider its opposition to local-loop unbundling and warns the operator’s intention to fight the process will have a “significant impact on the timeframes” for resolution of the issue.

“It’s regrettable that Telkom has taken the position it has,” he says. “It doesn’t want to recognise the potential benefits of unbundling of access networks, including but not limited to its own copper local loop.”

Cull says Ispa “agrees with the authority” that unbundling of the copper local loop “represents a revenue-generation opportunity for Telkom”.

“It will help Telkom resolve its reliance on a small number of exchanges for a disproportionate share of revenue.”

Cull adds that the success of Icasa’s intervention “hinges to a large degree on ensuring the incumbents are not in a position to thwart the process through price-setting, which would remove the business case for new entrants to take up unbundling opportunities”. — Duncan McLeod, TechCentral