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 South Africa Ltd.
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 rollout of broadband technologies like ADSL, Telkom’s refusal to provide information to ISPs prior to the launch of the service is claimed to have provided Telkom’s ISP division (Telkom Internet), with an unfair advantage over other ISPs. ISPA adds that the lack of consultation has led to a sub-optimal mechanism for the delivery of ADSL service. This means that there is less choice for the consumer and a more limited ADSL service than is available in other countries.
Telkom has chosen to deploy ADSL in such a manner that the Digital Subscriber Line Access Multiplexer (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 centralized regional sites. ISPA says that 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 an unfair cost advantage in this competitive sector of the telecommunications market, ISPA says. 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 lines, integrated services digital network (ISDN) connections and ADSL. One of these products includes ‘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 rollout of alternative access technologies such as very small aperture terminal (VSAT), but believes that Telkom should not enjoy a monopoly of 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, ISPA says.
BestFriends and SurfMore calling plans
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, it claims that Telkom used the launch of the SurfMore package as an opportunity to market Telkom Internet unfairly. The initial advertising campaign for SurfMore is said to have given the impression that SurfMore was only available if Telkom Internet’s services were used.
Telkom is also claimed to enjoy 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, the regulator does not permit such practice. 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 its billing for competitive and non-competitive services, it adds.
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 benefiting 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 SA consumers, ISPA adds.
SA Internet services highly competitive
The local Internet market is highly competitive and innovative, despite the restrictions resulting from the lack of competition in the provision of basic telecommunications services. ISPA believes that firm and decisive action is needed from Icasa to ensure that Telkom does not cause harm to the Internet sector, and that the consumer is afforded as much choice as possible at the most competitive price.