Spectrum auction: telecoms industry on edge After Oz, Big Tech’s reckoning awaits
In forcing Google and Facebook to pay news providers, a precedent has been set that other countries are sure to follow
In less than four weeks, the Independent Communication Authority of SA (Icasa) is set to begin the process of auctioning radio spectrum for mobile broadband.
It will be the first time in 15 years that the spectrum-starved industry has been given new access, despite the sector adding tens of millions of bandwidth-hungry consumers in that time.
Long delayed as the process has been, however, there is a real possibility that the auction won’t happen, mainly due to a legal challenge by Telkom. This has the major operators, which are desperate for access to spectrum — their lifeblood — on edge.
That the operators urgently need access to new frequencies is beyond question — for years, they’ve been “refarming”, or reallocating, their legacy 2G and 3G assignments so South Africans can get access to 4G services. Compared with most other countries, SA operators have had to make do with a relatively narrow sliver of spectrum to keep consumers connected — difficult in a market where most people don’t have fixed broadband and rely on wireless networks to go online.
SA should have sold 4G-specific spectrum a decade ago. This never happened, mainly due to political interference. Former communications minister Siyabonga Cwele went to court in 2016, for example, when Icasa last tried to license access to new spectrum. It delayed the process for years.
There is, of course, plenty that could go wrong between now and the end of March — but a delay this time would most likely be a result of a court order rather than interference by the minister, now Stella Ndabeni-Abrahams.
There are two lawsuits against Icasa — so far — that could throw a spanner in the works: Telkom wants the auction delayed a few months while its concerns are addressed, and MTN has an issue around the licensing of 5G-suitable spectrum. (MTN doesn’t want any delay to the process.)
The MTN matter will be heard on March 9. The Pretoria high court is still to announce a date to hear Telkom’s application, which is the one most likely to derail Icasa’s plan.
Telkom is seeking an interdict to stop the regulator from proceeding, for now, with the licensing process.
It says Icasa’s invitations to apply (ITAs) for spectrum and a planned wholesale open-access network have fundamental flaws that could entrench the dominance of Vodacom and MTN. It wants the court to set aside Icasa’s decision to issue the ITAs and stop it from adjudicating any applications received.
One of Telkom’s biggest concerns is that Icasa issued the spectrum auction ITAs knowing that two of the key bands it intends selling are not yet available.
The “digital dividend” bands at 700MHz and 800MHz — both extremely valuable bands that are well suited to offering excellent indoor coverage and better, more affordable broadband outside SA’s cities — are still being used by the SABC and other broadcasters for analogue television. These broadcasts should have ended no later than 2015 but SA’s broadcasting digital migration project is still far from finished, thanks largely to political incompetence.
Telkom, the only major player without access to frequencies below 1GHz, is worried that it will be forced to pay top dollar — R1bn or more — for access to the digital dividend bands without being able to use them effectively for years to come. This could put pressure on Telkom’s balance sheet and leave it in a weaker position relative to Vodacom and MTN.
Icasa “cannot license something that is not available”, group executive for regulatory affairs and government relations Siyabonga Mahlangu said at the time Telkom filed court papers in December.
Telkom is challenging the process on other grounds, too, including that Icasa pre-empted the outcome of its separate mobile broadband services inquiry, which Mahlangu contends must happen to ensure spectrum is allocated in a way that promotes optimal competition rather than “entrenching” the Vodacom/MTN “duopoly”.
Icasa is having none of it and has told Telkom they will meet in court. Telkom, Icasa chair Keabetswe Modimoeng says in a responding affidavit, has no right in law to seek to interdict the spectrum licensing process.
“There is absolutely no constitutional basis for this court to grant the interim interdict [in] which Telkom seeks only to protect [its] own commercial interests to the disadvantage of the general population,” Modimoeng says.
“The mere fact that Icasa arrived at a conclusion which is different from that which Telkom would have preferred … does not mean that Icasa’s decisions are unlawful or that they are irrational. In fact, it shows that the decisions … required Icasa to consider different policy objectives and balance competing interests.”
Modimoeng also dismisses Telkom’s claim that Icasa didn’t
Fresh from a bruising public relations disaster in Australia, Facebook — along with Google and Twitter — has much bigger problems this month when US lawmakers will grill the tech giants again over spreading misinformation about politics and Covid-19.
Facebook has the most to worry about — including the January 6 insurrection on Capitol Hill, as it was used as the primary organising platform by right-wing rioters, and its reluctance to ban former president Donald
Trump until after five people died because of that riot.
Last month the world’s largest social network, with more than 2.3billion users, scored yet another own goal with its clumsy reaction to the Australian government’s admittedly imperfect law that Facebook and Google should compensate news publishers.
Since CEO Mark Zuckerberg’s
2018 announcement that it would “pivot to privacy” and drop the news feed, Facebook has become a pariah for failing to rein in its users from spreading disinformation, misogyny, anti-Semitism and lies such as Trump’s claim that last year’s election was “stolen”. Instead, Zuckerberg’s focus on groups has proved to be a breeding ground for conspiracy theories such as QAnon and the Trump-supporting militia mobs.
On March 25 the energy & commerce committee of the house of representatives will start grilling Zuckerberg, Google CEO Sundar Pichai and Twitter CEO Jack Dorsey on, among other things, how disinformation has spread with “real-life, grim consequences for public health and safety”.
“For far too long, Big Tech has failed to acknowledge the role they’ve played in fomenting and elevating blatantly false information to online audiences. Industry self-regulation has failed,” said Democratic congressman Frank Pallone jnr. “We must begin the work of changing incentives driving social media companies to allow and even promote misinformation and disinformation.”
But, having settled with the Australian government, Facebook has signed deals with three publishers (the details are still secret). The eight-day news blackout, which included the pages of essential government services and Facebook’s own corporate page, has humbled Facebook, despite its posturing.
It’s worth noting that this is the first time, globally, that an elected government will set the prices for what news organisations are paid by a commercial company — and that prices are not set by the firm that will always be in a more powerful bargaining position.
Other countries have seen that Facebook and Google, which blinked first, can be forced to follow legitimate laws. Until now, no country has had the guts to stand up to the might of these tech giants.
As Australian Prime Minister Scott Morrison said: “Global tech giants, they are changing the world, but we can’t let them run the world.”
Australia just won the first test.
It’s a first: an elected government determining what news organisations are paid by a company