ICASA denies Broadband Infraco an ECS licence

Posted by LA Thornton on Tuesday, April 13, 2010
ICASA published a Reasons for Decision document on 7 April 2010 detailing a process that has led to its denial to Broadband Infraco, of an electronic communications service (ECS) licence.  Broadband Infraco was earlier issued an electronic communications network service (ECNS) licence by ICASA.
I must admit, I am a bit confused about this decision.
Broadband Infraco, in terms of its own Act, has as it main object, to provide access to electronic communications by providing ECNS and ECS.  How is it going to do that now that ICASA has denied it an ECS licence?
Indeed, 28 pages of the 30 page ICASA document details the work of an ICASA Committee supporting its recommendation that an ECS licence be issued to Broadband Infraco (emphasising the legislative mandate of Broadband Infraco).
ICASA‚Äôs reasoning for denying the licence is that because Broadband Infraco indicated that it will not enter the retail market and will instead provide wholesale ECS only, this is inconsistent with the the criteria of affordable pricing and universal service. 
The irony is that Broadband Infraco was trying to meet the objections of its would be competitors by agreeing not to enter the retail market, and because of that, it cannot now provide wholesale ECS.
ICASA states that Broadband Infraco's plans "creates a special type of ECS licence that is not provided for in the ECA.  It also unduly discriminates against similarly placed licensees who have obligations to offer services across all market segments and are not in a position to cream-skin".
Well, that's just wrong.  First, no licensee has universal service obligations, including Telkom.  There are some obligations on the old mobile cellular providers in respect of community service telephones and on Sentech and Neotel in respect of Internet services.  These hardly obligate licensees to offer services across all market segments or not to cream-skin.  Indeed, any one of the more than 200 individual ECS licensees could now become a wholesale only ECS provider within the mandate of its existing licence.
Despite protestation to the contrary, perhaps ICASA was unduly influenced by the Minister's attempt to amend the policy direction to ICASA asking ICASA to consider only the ECNS licence application of Broadband Infraco?
In conclusion, although not a fan of yet another state owned entity in the market, in my opinion, ICASA has opened itself to another unfortunate and unnecessary legal battle.


Tags: licensing  "broadband infraco act" 
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