CUASA Welcomes Altech ruling

The Communications Users Association of South Africa welcomes Friday's landmark judgement made in favour of Altech Autopage's High Court Application – a decision which clears up the meaning of an uncertain ministerial determination to confirm that VANS can indeed, self provide.

"While not everyone will be pleased by the ruling, overall the decision is likely to increase liberalisation and competition in the market – and that's ultimately going to be a good thing for South African business and consumers," says CUASA Chairman, Edwin Thompson.

"There is no doubt that the High Court's ruling will be of great significance to the VANS industry and to the ongoing liberalisation and deregulation of the telecommunications industry in South Africa," says Thompson. "The future telecommunications landscape was, in many ways, dependant on decisions coming out of these hearings. One can only hope that such decisions do indeed recognise the critical need for further deregulation of the industry and the freeing up of resources to enable the rapid reduction in telecommunication costs going forward," he continues.

Communications Minister Dr Ivy Matsepe-Casaburri made a ministerial determination in 2004 which indicated that VANS would be able to build their own networks. ICASA initially interpreted the determination as confirmation that VANS would be able to self-provide, but the minister later said that she had never intended this to be the case.

"With the exception of a possibility of an appeal from ICASA, the matter is now settled and we can hopefully look forward to greater freedom and competition in the South African ICT industry," Thompson continues. "However, on the downside, the decision may possibly lead to a measure of 'chaos' while new network operators scramble to provide infrastructure. It's also possible that this judgement could lead to an increase in the load placed on ICASA, particularly regarding the allocation of spectrum for the provision of generally wireless telecommunications infrastructure. It is likely that an initial rush to self-provide infrastructure will be followed by a period of consolidation, as has been the case with other aspects of the telecommunications industry," he continues.

In April 2008 an application was made by Altech Autopage Cellular to interdict the ICASA-regulated Electronic Communications Act (ECA) license conversion process insofar as such process was dealing with the conversion of Value-Added Network Service (VANS) licenses to ECA-type Individual Electronic Communication Network Service (I-ECNS) licenses. The ECA specifically mandated ICASA to carry out the conversion of all telecommunication and broadcasting licenses issued under the old Telecommunications Act within 24 months after the promulgation of the ECA (with an option to extend if necessary by a maximum of a further six months).

The conversion process in respect of VANS licensees effectively began in 2007, and after a number of about-turns and changes in the process, public hearings were held in March 2008. At these hearings those VANS licensees wishing to have their licenses converted to I-ECNS licenses made representation to ICASA.

It was not long thereafter that Autopage Cellular, apparently having been led to believe that it was not likely to be successful in having its VANS license converted into an I-ECNS, lodged a High Court Application against ICASA. The intended effect of this application was two-fold. Firstly it was to stop the ICASA VANS license conversion process. Secondly it was to obtain a court order to the effect that VANS licensees could from 1 February 2005 self-provide (which means that VANS were not obliged to source underlying telco network facilities/infrastructure from Telkom or some other PSTS licensee such as Neotel). Importantly, the effect of the latter decision by a court, Autopage Cellular argued, would render the entire conversion process from VANS license to I-ECNS license redundant and immaterial. This because if VANS licensees could self-provide, then the license category to which they should automatically be converted under the ECA conversion process should be to that of an I-ECNS license (the telecommunications license which includes the provision of network infrastructure provisioning). As such, following Autopage Cellular's logic, the conversion process did not grant ICASA any discretion in converting VANS to I-ECNS licenses, as all VANS licensees should have a right to an I-ENCS license.

At the end of April ICASA gave Autopage Cellular an undertaking that the VANS license conversion process would be suspended until such time as all the matters in Autopage Cellular's application were considered by the High Court. The process was thereafter put on hold and the Autopage Cellular application was set down to be heard in the Pretoria High Court from 29-31 July 2008.