Press release: ISPA: There is No Implementable E-Rate

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South Africa’s Internet Service Providers’ Association (ISPA) has written to the Independent Communications Authority of SA (ICASA) highlighting that ICASA’s failure to finalise regulations governing the implementation of the e-rate is dis-incentivising the provision of discounted services to schools and other qualifying institutions.

ISPA’s specific request to ICASA, set out in a letter dated 3 February 2015, required clarity from the Authority ‘regarding the current status of implementation of the e-rate as contemplated in section 73 of the Electronic Communications Act 36 of 2005 (“the ECA”).’ No substantive response from ICASA has been received.

First proposed under the Telecommunications Act of 1996, the concept of an e-rate was floated as a way to help achieve universal telecoms access and facilitate education by requiring Internet Service Providers (ISPs) to provide Internet access to schools at 50% of the commercial rate.

More recently the legislative framework for the e-rate was amended by the Electronic Communications Amendment Act 1 of 2014, which broadened the potential scope of application of the discount to private schools.

ICASA has stated several times that it intends to complete its review of the 2009 e-rate Regulations, which it recognised did not provide for the relationship between retail and wholesale levels of the service provision value chain. It published notice of its intention to revise the 2009 e-rate Regulations on 7 December 2009 and public hearings in this regard were held in March 2010.

This exercise has not, however, been completed and the 2009 e-rate regulations remain in force. Furthermore there is no mention of the proposed e-rate or any review thereof in ICASA’s current Strategic Plan, which covers the period until 31 March 2019.

Statements from many of ISPA’s 175 members bear testimony to the current levels of frustration with regards to the specifics of e-rate implementation:

“We are still stuck with no reference to upstream providers giving the downstream provider 50% discount. With today’s prices, margins have been chopped to remain competitive making 50% totally unrealistic. Personally I think the e-rate should be scrapped as many ISPs are doing their best to provide services to schools and making their own decisions around a sustainable service. The reality is that schools are getting discounts in spite of the e-rate,” writes one ISP.

There is a common perception that the e-rate must be offered by ISPs, says Dominic Cull, ISPA regulatory advisor, when, in fact, no regulatory framework exists to do so.

“ICASA is aware of the absence of a regulatory framework to prescribe the manner of e-rate implementation, yet it carries on requiring licensees to file annual reports relating to their implementation of the e-rate. At the same time the e-rate is regularly held up in Parliament as an ongoing success: it isn’t.” states Cull.

ISPA has called on the Authority to act urgently to remedy this state of affairs and to either initiate a new process for the development of a new set of regulations or make a public statement clarifying its position in respect of the e-rate.

“ISPA has made its view clear to ICASA, Parliament and the ICT Panel of Experts: the e-rate needs to reconsidered – the intention is sound but the realities of the market, technology and service provision are very different from 2002, when all facilities and upstream services were procured from Telkom.

If the e-rate is to be persisted with then it must be recognised that as things stand the e-rate actually disincentivises discounted service provision (with the possible exception of vertically-integrated incumbent operators).”

“The current uncertainty serves nobody’s interests,” concludes Cull.

Further Information

For further information, please contact the ISPA secretariat on the Contact ISPA page.