Telkom refuses access to high-speed DSL trials

Telkom is a wholesale provider of DSL services to ISPs in South Africa, one of which is its own ISP, TelkomInternet. Telkom as the wholesale provider has refused requests from ISPA members to participate in the trial, raising a concern that the majority of ADSL users in South Africa will not benefit from the technical and other insights obtained into high-speed DSL services.

"There is a technical difference in the way in which Telkom makes wholesale DSL services available to TelkomInternet as opposed to other ISPs obtaining the same services. While TelkomInternet has a direct link into SAIX, other ISPs are required to use the IP Connect or IPC product to take up wholesale DSL. ISPA questions whether the trial would be capable of achieving its stated objectives of testing cost assumptions and technical issues given the narrow manner in which it is being conducted," said ISPA regulatory advisor, Dominic Cull.

Telkom has been reported as stating that the reasons for excluding all ISPs other than its own from the trial were technical and that it had to balance inclusion against its desired outcomes. The association's position is that it must surely be a desired outcome for all DSL subscribers to be provided with upgraded services as quickly as possible and that this is an outcome, which will not be achieved by testing only the direct link and not the IPC model.

Innovation and price reductions

"Innovation and price reductions have been led by ISPs other than TelkomInternet and the experience of these ISPs in uncapped data provision, content management and rich media would enhance the evaluation of the new services and contribute to their successful deployment," said Cull.

ISPA further expressed surprise that Telkom had adopted an exclusive approach given the recent Competition Tribunal judgement against it. Notwithstanding that it has indicated its intention to appeal such judgement, it is clear that both Telkom and the Tribunal accepted that its DSL network was an "essential facility" for the purposes of the Competition Act.

"There can be little doubt that this approach will provide a competitive advantage to TelkomInternet, allowing it to obtain knowledge of the new services not available to its competitors while gaining market share in what is a highly-competitive market. While the organisation has previously expressed its commitment to enabling fair competition in the downstream services market, its conduct indicates otherwise. Our view is that this will be to the detriment of consumers, competition and innovation," Cull concluded.