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Telkom South Africa’s anticompetitive behaviours still under investigations

The Competition Tribunal hearing into allegations of anticompetitive behaviour by Telkom took a new twist when the fixed-line operator successfully forced Internet Solutions to withdraw one of its complaints.

Telkom argued that Internet Solutions' complaint was filed late and overlapped with a similar complaint from the tribunal's investigative arm, the Competition Commission.

This may be a small victory for Telkom, but it is still facing other anti-competition allegations that have been referred to the tribunal. Telkom controls access to crucial international bandwidth and high-speed ADSL lines, and is frequently accused by internet service providers of charging excessive fees for those facilities.

This leaves the service providers with no choice but to pass on the costs to consumers.

Internet Solutions referred its original complaints against Telkom to the tribunal in June last year, after the Competition Commission had referred its own case against Telkom to the tribunal for adjudication.

Internet Solutions' second referral was filed in November, after it studied the commission's submissions and found that some of its complaints had not been included. Internet Solutions then asked the tribunal to consider its complaint together with the commission's referral.

The commission was investigating complaints of anticompetitive behaviour against Telkom made by internet service providers, including Internet Solutions.

It found that Telkom abused its dominant position in the market for the provision of telecommunications network facilities.

The commission also found that Telkom charged excessive prices for the basic infrastructure needed by the internet service providers to obtain access to a range of telecommunications services.

During the proceedings yesterday, Telkom raised its objections to Internet Solutions' submission. It argued that it could not answer to the similar complaints.

The tribunal's chairman, Norman Manoim, requested that Telkom and the company to "sort out" the issue.

Internet Solutions agreed to withdraw its first referral but asked the tribunal to accept its second submission (referral). But Telkom asked the Tribunal not to accept Internet Solutions' request.

The tribunal will now rule on whether to accept Internet Solutions' second referral and also Telkom's claims that the commission's findings are vague, contradictory, unconstitutional and did not meet all the requirements of the Competition Act.

Telkom asked the tribunal to dismiss Internet Solutions and the commission's referrals.

Telkom said the commission had failed to articulate any rule in the relevant act to which an alleged transgressor such as Telkom might know whether particular pricing is excessive, so that the behaviour is not repeated. Telkom's comments about the commission's case being unconstitutional indicate that it might approach the courts if the tribunal rules against it.

But its legal representatives refused to comment yesterday on whether they are hinting at possible legal action against the competition authorities.

If it goes to court, it will be the second time that it challenges decisions by the competition authorities. In 2008, it won a high court ruling that the commission did not have jurisdiction over its activities and that it is instead regulated by the Independent Communications Authority of SA.

However, that ruling was overturned by the Supreme Court of Appeal last year.

The matter dates back to the South African Value Added Network Services Association's complaint against Telkom lodged with the commission in 2002. The matter is expected to be heard early next year.

Source: Business Day

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