ISPA calls for urgent clarity on Value-Added Network Services

Ahead of this week’s hearing on proposed new regulations governing Value-Added Network Services (VANS), the Internet Service Providers’ Association (ISPA) calls on the Independent Communications Authority of South Africa (ICASA) to provide urgent clarity on the types of services that are considered VANS. For some time now, ISPA has been asking ICASA to delineate which types of Internet services are classified as VANS and which do not fall within the VANS framework, but ICASA has not yet done so.

“Our members provide many different types of services,” explains Ant Brooks, Chair of ISPA’s Regulatory Committee, “some ISPs provide email services, but not Internet access; other provide Internet access, but operate as a ‘virtual ISP’ meaning that they do not operate their own access network, but piggy-back on the networks of large ISPs. And some members only provide higher-level services, such as web hosting. ICASA cannot tell us which of these services require a VANS licence, and this is extremely frustrating for our members.”

ISPA is also concerned that the lack of clarity on who needs to obtain a VANS licence means that many potential licencees are not aware that the proposed new regulations may apply to them. It is quite possible that ICASA may decide that a company or a school providing email to its own staff or students needs to have a licence, which means that the proposed regulations could apply to tens of thousands of organisations that are not even aware that these regulations exist. So far, ICASA has been unable to confirm that the VANS framework does not apply to such cases, and ISPA believes that this is cause for significant concern.

The new regulations tabled by ICASA in December propose a R30,000 application fee for all VANS licences. In addition, licencees will be required to have a 30% shareholding by Historically Disadvantaged Indivuals by 1 October 2005, and are required to pay an annual fee to ICASA related to their income from providing VAN services.

“At least two thirds of ISPA’s members are classified as Small, Medium and Micro Enterprises (SMMEs),” says Brooks, “not only is the proposed application fee exhorbitant for small businesses, but the empowerment targets are simply unrealistic. ISPA fully supports ICASA’s efforts to improve the level of black shareholding in the ICT sector, but their approach is counter-productive. The primary effect of the proposed regulations will be to shut down most of the SMME players in the Internet sector.”

ISPA is concerned that ICASA’s approach to empowerment conflicts with both national BEE legislation, and with the ICT Charter, both of which contain exemptions for small businesses. ISPA believes that ICASA should apply similar exemptions to the VANS licencing framework.

“It is an objective of national government both to promote development of the ICT sector, and to promote the development of SMMEs. By comparison, many of our smaller members believe that ICASA is deliberately trying to force them out of the market with the new regulations. While we don’t believe this to be the case, we do urge ICASA to take a step back and take a long hard look at the potential impact these regulations would have on a dynamic and important sector of the economy.”

Published: Tuesday, January 18th, 2005

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Name: Elaine Zinn
Company: ISPA Secretariat
Phone Number: +27 11 314 7751
Email Address: queries@ispa.org.za

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Tel: 010 500 1200 or 087 550 1200
Fax: +27 (0) 87 606 4066
Email: queries [at] ispa.org.za