“Damaging Uncertainty” Surrounds Undersea Cables

31 October 2007

The uncertainty surrounding aspects of the South African government’s position on undersea cables is damaging and threatens to sink the country’s hopes for a successful 2010 Soccer World Cup.

This is according to the Internet Service Providers’ Association of SA (ISPA) which is particularly concerned about the troubling about-turn in the Minister Ivy Matsepe Casaburri’s policy regarding the ending of the exclusivity on SAT-3 from November 2007.

“While the draft policies issued in May had a clear and welcome provision on SAT-3 exclusivity, this is mysteriously missing from final policy gazetted last month. Many pronouncements made by the Minister in her budget speech are now out of date,” said Ant Brooks, ISPA General Manager.

Equally confusing is that while the minister has mandated ICASA to ensure there is no unfair competition relating to the use of undersea cables, she has also made it clear that any undersea cable landing in South Africa must be majority South African-owned. This is especially confusing because a cable usually has two ends.

That the Minister’s ownership comments are unfortunate is highlighted by the fact that Seacom’s quoted prices for its March 2009 launch are some fifteen times cheaper than Telkom’s current pricing for International Private Leased Circuits. Seacom is the planned undersea cable system running along the East African coast. When it comes to landing rights, the fact that Seacom is majority foreign-owned is now seen as more important than President Mbeki’s State of the Nation Address comment about telecoms pricing in South Africa being ten times too expensive.

Amid assurances that her department was working on refining the landing requirements, almost a full month ago, Communications Ministry Director-General Lyndall Shope-Mafole was quoted as saying the undersea cable landing guidelines would be ready “soon”.

“Talk of majority South African-ownership of cable systems is very worrying and totally at odds with common practice elsewhere. Reputable organisations such as the World Bank have made it clear that allowing all competing undersea cables equitable landing rights while limiting public sector involvement in telecommunications is the way to reduce prices,” said Mr Brooks.

The New Partnership for Africa’s Development (NEPAD) e-Africa Commission recently announced plans for a submarine cable following its split from the private sector-led East African Submarine Cable System (EASSy). Much attention has been given to the fact that the new cable system will eventually have a 3.8 terabit per second capacity without any mention of exactly how much capacity will be ready for 2010.

Should the South African government continue to place arbitrary and ill-advised restrictions on investment in communications it is very doubtful that the country will have sufficient bandwidth available for 2010.

According to Mr Brooks, “A likely scenario is that bad planning and an unclear regulatory framework will see ISPs being pressured to give preference to World Cup traffic at the expense of mission-critical daily business traffic.”

The Internet Service Providers’ Association is a South African Internet industry body incorporated not for gain. ISPA currently has about 150 members, comprised of large, medium and small Internet service and access providers in South Africa. Formed in 1996, ISPA has historically served as an active industry body, facilitating exchange between the different independent Internet service providers, the Department of Communications, ICASA, operators and other service providers in South Africa.