SOUTH AFRICA'S TELKOM GETS TOUCHY ABOUT CAPPING CRITICISMS SPURRED BY DOTCO CASE
Thin-skinned Telkom SA last week issued a press release in an attempt to halt what it saw as inaccurate media coverage of the Dotco case and the issue of it capping its broadband service.
Telkom has issued a statement about the recent court action regarding its new ADSL billing system. We have decided to provide this statement in full.
It is with great concern that Telkom has noted inaccurate media reports around the Dotco interdict, currently with the Cape Town High Court. Telkom would like to set the record straight by providing the correct factual information regarding this matter.
Dotco brought an urgent application in the High Court in Cape Town against Telkom on 25 October 2005 to stop Telkom from implementing usage-based billing for its ADSL service.According to media reports Dotco won the interdict on 27 October, with the High Court ”freezing” Telkom’s increase in ADSL fees.
Telkom will continue to implement usage based billing as of 1November 2005. All ISPs except Dotco will be billed according to the new proposed fee structure and billing method. Telkom responded to the court application by removing the matter from the urgency role. As a result, the case was postponed to 5 December 2005. The case was only postponed to give both parties time to file further papers.
If the case is postponed, it quite simply means it was not heard in Court. This, in-turn, means that Dotco could not possibly have won an interdict, as it was not heard at all. Telkom did agree to continue billing Dotco, using the current billing method, until the case is heard on 5 December 2005. This decision forms part of an agreement between Telkom and Dotco, and no court order has forced Telkom to do so. Should Telkom win the case against Dotco, the ISP would have to reimburse the company for the period that it was not billed according to the new billing method. All other ISPs will comply with the usage based billing method from 1 November.
Media reports regarding the pricing of ADSL have also been largely inaccurate, with the media reporting that bit capping will result in Telkom’s ADSL service undergoing huge price increases. The fact of the matter is that broadband capping does not result in a price increase. It is a wholesale issue, which provides each ISP with the flexibility to determine its own ADSL product offerings. This means that Telkom will perform the role of ADSL wholesaler as opposed to the perception created in the industry that the Company is regulating ADSL usage.
ISPs will, in other words, be re-selling ADSL Internet services to end-users and should therefore be in control of, and responsible for, their own customers. To this end Telkom will provide ISPs with tools to control ADSL sessions. To reiterate: broadband capping does not equate to a price increase.
Telkom has to regulate ADSL usage because certain ISPs purchase 3 gigabyte accounts from Telkom and then resell it as 30 gigabyte accounts, leading customers to believe that they purchased 30 gigabyte accounts. This practice is an abuse of the ADSL service.
It should be noted that broadband capping is an international norm. Both the BT 512k services have a 15 gigabyte a month cap, while its 1 megabyte service has a 30 gigabyte limit. Other telecommunications companies that employ a similar practice include Australia’s Telstra, Belgium’s Belgacom and New Zealand Telecom.
On 1 November, Telkom will introduce two options:
1) ISPs can opt to purchase from a set of products ranging from 2 gigabytes to 30 gigabytes shaped, and 4 gigabytes to 30 gigabytes unshaped. All of these options will be hard capped. This means the ISP will purchase user names and passwords from Telkom’s South African Internet Exchange-SAIX and not engage in their own final radius authentication.
2) ISPs will make use of usage-based billing and be responsible for the total consumption of their end users. They will also manage the capping of each user individually. In this case, ISPs will do their final radius authentication and assign their own usernames and passwords to their respective users.