No cost clamp for interconnection rates in South Africa

Telecoms

The Independent Communications Authority of SA's (ICASA's) new draft interconnect regulations have not clamped down on high incumbent costs. Smaller industry players have had much riding on ICASA's interconnect decisions and have long lamented the high costs imposed by the incumbents.

While an interconnect agreement is essentially a commercially arranged contract, many of the smaller operators would have been hoping ICASA would put a price limit on the high interconnect costs in the country.

"Interconnection is an important way of introducing competition in the electronic communications sector. The authority notes that, while interconnection agreements are in essence commercial agreements, they are always subject to some form of regulation, particularly in absence of a competitive environment," the regulatory annexure explains.

However, the regulator says it does not intend to regulate the commercial relationships between the operators. Rather, it wants to instruct them on the minimal requirements that will facilitate competition between the telecoms businesses.

The last set of draft regulations were published in December 2007. ICASA says the new regulations include new concepts and more functional dispute resolution. The current draft of the regulations is a culmination of a consultation process the regulator held with the operators in April last year.

While ICASA has not specifically called on reasonable pricing for interconnect, the regulator says the idea behind the new regulation is to force the operators to be more transparent around interconnect agreements. ICASA says all agreements must be submitted to it for approval before they are implemented.

The regulations place a high focus on telecommunications companies being transparent in their interconnect dealings. "Billing and settlement procedures must be transparent." The regulations stipulate that all relationships and parties involved must be clearly identified.

Transparency is also attributed to the way the agreements are made and the costs that are being charged. "Charges for interconnect must be sufficiently unbundled so that an interconnection seeker does not have to pay for anything it does not require for the requested interconnection."

ICASA has also made provision for those companies that have already entered into interconnect agreements. The regulations will be backdated so those companies can also benefit from them. "It is, therefore, incumbent on stakeholders who have entered into existing agreements to review and, where necessary, amend them for submission to the authority."

The draft regulations will go through a public hearing process before they are implemented.

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