The Wireless Access Providers Association (WAPA) yesterday launched proceedings in the South African High Court aimed at bringing much-needed clarity to the Value Added Network Service (VANS) industry and the rights of holders of VANS licences.

WAPA is requesting the High Court to make a declaratory order regarding the rights of such VANS licensees to “self-provide”, i.e. to roll out their own networks without the need to lease infrastructure or electronic communications facilities from Telkom or other major licensees. WAPA believes that VANS have held this right since 1 February 2005 after the Minister of Communications published a policy direction to this effect in September 2004, notwithstanding a press release issued on 30 January 2005 in which the Minister attempted to clarify her earlier policy direction.

WAPA has chosen this route as it has been advised that it may bring the much needed clarity to the industry without delaying the conversion process currently being undertaken by the Independent Communications Authority of South Africa (ICASA).

Despite repeated attempts by industry players to obtain certainty as to the rights of VANS neither ICASA nor the Minister has, until recently, made any statement in this regard despite the passing of more than three years and the critical importance of the issue in the conversion of licences from those issued under the now-repealed Telecommunications Act  of 1996 to those to be issued under the new Electronic Communications Act of 2005.

On 17 March 2008, ICASA Councillor Marcia Socikwa made an oral statement at the commencement of hearings into the conversion of VANS licences in which she made it clear that ICASA’s position was that there were no infrastructure rights attaching to VANS licences and that they were accordingly not entitled to self-provide.

ICASA has not confirmed this position in writing as yet and this latest statement is in conflict with the manner in which ICASA has previously indicated it will convert VANS licences. Accordingly there is still a great deal of debilitating confusion in the industry.

The issue is of critical importance not only to the more than 500 VANS licensees in existence but also has fundamental implications for the levels of competition and choice to be experienced by South African consumers.

Should the High Court rule that VANS do indeed enjoy the right to self-provide ICASA will need to take this account in the licence conversion process, as the ECA requires that conversion of Telecommunications Act licences to ECA licences be done on “no less favourable terms”. In other words the rights which a licensee enjoys under its current licence must be carried through to the new licence it will receive under the ECA as a result of licence conversion.

Under the ECA there are two basic types of licence – electronic communications network services (ECNS) and electronic communication services (ECS). As the names suggest the former allows the holder to roll out and operate networks and to lease capacity thereon to holders of ECS licences so that they can provide their services to end-users and consumers.

WAPA and many other VANS licensees contend that their licences should be converted to both an ECNS and an ECS licence, an outcome which would serve to both protect the existing rights of these licensees as well as ushering in a “big bang” liberalisation of the market at network or facilities level. In other words SA consumers, after many years of having to rely on a monopoly facilities provider, will have a far greater degree of choice as to where they can obtain their services from.

And as can be seen from other markets around the world, greater competition leads to lower pricing and generally improved service levels, an outcome which South Africa desperately needs, as recognised by the President in his State of the Nation speeches over the past five years.

Clarification not confrontation

Despite receiving legal advise to the effect that the process employed by ICASA in the licence conversion process is deficient, WAPA has expressly decided not to attack such process on the grounds that this would simply serve to delay licence conversion.

According to WAPA Chairperson David Jarvis: “We believe that by seeking a declaratory order on the rights of VANS we will in fact speed up the licence conversion process by assisting ICASA to reach a definite position with regard to the infrastructure rights of VANS.”
Jarvis continued that it was WAPA’s hope that both ICASA and the Minister would view the intervention as being a positive development which will stave off future challenges to licence conversion.

“We sincerely hope that the spirit of our application is appreciated by both industry and the Regulator and that the Regulator will take the opportunity to engage in the process of gaining certainty on VANS rights in a constructive manner”.

The first to go

WAPA has noted that, while there has been a great deal of unhappiness in the industry, no licencee has as yet sought to gain clarity on what exactly the existing rights of VANS are.

According to Jarvis: “We are aware that there are a number of other parties who share our views in respect of self-provision and who have been considering taking the matter further.”

WAPA is aware of at least one other VANS grouping which has drawn up papers in preparation for approaching the High Court on an urgent basis seeking the same clarity and also to interdict ICASA from proceeding with the licence conversion process until the rights of VANS licensees have been finally determined.