ISPA LODGES TELKOM ANTI-COMPETITIVE COMPLAINT WITH ICASA

Internet

The Internet Service Providers’ Association (ISPA) has lodged a complaint with the Independent Communications Authority of South Africa (ICASA) regarding a number of unfair and anti-competitive business practices undertaken by Telkom.

The complaint deals with Telkom’s roll out of Asymmetric Digital Subscriber Line (ADSL) services, the BestFriends and SurfMore call packages, the bundling of VSAT service with Telkom’s Cybertrade product range and the anti-competitive bundling of competitive services with monopoly services.

The launch of Telkom’s ADSL service last year was shrouded in secrecy, and lacked consultation with the Internet industry. While ISPA wholeheartedly supports the roll-out of broadband technologies like ADSL, Telkom’s refusal to provide information to ISPs prior to the launch of the service provided Telkom’s ISP division (Telkom Internet) with an unfair advantage over other ISPs. In addition, the lack of consultation has lead to a suboptimal mechanism for the delivery of ADSL service. This means that there is less choice for the consumer and a more limited ADSL service is available than in other countries.

Telkom has chosen to deploy ADSL in such a manner that the DSLAM units at Telkom exchanges are shared between all upstream service providers. These are then connected with the authentication server through a shared link on the Telkom ATM network at centralised regional sites. There has been no attempt to ensure that the upstream provider is able to ensure service levels over these links. The upstream ISP is also expected to cover the cost of the link between the authentication server and the ISP’s network. Telkom’s ISP is co-located with the authentication servers and thus has a unfair cost advantage in this competitive sector of the telecommunications market. ISPA believes that ISPs should be able to locate their own DSLAM units at Telkom’s exchanges, removing any need to rely on Telkom’s IP network to relay the ISP’s customer’s information and reducing Telkom’s anti-competitive cost advantage.

Telkom’s Cybertrade product range combines electronic commerce services with a range of access solutions, including analogue telephone ines, ISDN connections and ADSL. One of these products includes a ‘CyberSat’ access options, which is asymmetric satellite access via a VSAT earth station, an access mechanism not readily available to other non-Telkom ISPs.

ISPA supports the roll-out of alternative access technologies such as VSAT, but believes that Telkom should not enjoy a monopoly on the provision of Internet access using VSAT. Other ISPs must be afforded the opportunity to provide VSAT access services to their commercial and residential clients.

In August 2002, Telkom launched the SurfMore call package, which aims to provide Internet users with reduced call charges to ISPs. While ISPA supports any initiative to bring down the costs of connecting customers to ISPs, Telkom used the launch of the SurfMore package as an opportunity to unfairly market Telkom Internet. The initial advertising campaign for SurfMore gave the impression that SurfMore was only available if Telkom Internet’s services were used.

Telkom also enjoys an unfair advantage through its ability to bill for competitive Internet access services on the same bill it uses for voice services. In many other jurisdictions, such practice is not permitted by the regulator. To ensure fairness, ISPA believes that Telkom should be required to make it clear to a consumer signing up for the SurfMore calling plan, that they have a choice of Internet service providers. Telkom should also be required to separate their billing for competitive and non-competitive services.

The BestFriends calling plan, a new service included in Telkom’s rate filings for 2003, gives telephone customers the ability to select several commonly called numbers. The customer enjoys reduced call charges to those numbers. In the definition of the BestFriends calling plan filed with ICASA, Telkom specifically excludes calls to ISPs. It is ISPA’s view that excluding a particular type of business from benefitting from a call plan is an unfair and discriminatory practice. Including calls to ISPs in the BestFriend calling plan would be a welcome additional step in reducing the costs of Internet access for South African consumers.