City's data monopoly is illegal

An inquiry into the prospects of fibre-optic network expansions in Windhoek has found that the municipality has no right to stop other players.

17 February 2020 | Business

The City of Windhoek's intention to monopolise the fibre-optic data network in the capital is unlawful, while its plan to develop its own network infrastructure is questionable and unclear.

These comments are contained in an industry inquiry into the short-term future of fibre-optic communication in the city conducted by ISG Namibia on behalf of the Internet Exchange Point Association of Namibia (IXPAN).

In the report, network facility licence holders say they are against the City's actions to block the expansion of fibre-optic networks for any reason other than assurance of quality installations, which can be achieved through a simple set of pro-forma standards.

The operators are not convinced that the municipality's actions to stop fibre-optic installations are aimed at ensuring orderly conduct.

Instead, they think the true reason for the City's actions is self-serving for monetary gain, which it has previously expressly stated.

The City Police on Thursday swooped down on one of the private operators, Paratus Telecommunications Namibia, and stopped it from digging trenches along Nelson Mandela Avenue for the purpose of laying fibre-optic cables.

Paratus and MTC, both fully licensed by the Communications Regulatory Authority of Namibia (CRAN), were instructed to cease all activities to install fibre-optic infrastructure in public spaces like pavements and roads.

The City first justified its action by stating that it intended to enter the ICT space itself and therefore had the right to prohibit other operators from competing with its strategy.

Later, in a letter to Paratus, it cited “processes subject to legalities as per ongoing dispute” as a reason for the obstruction.

The City then said “orderly” installation was a requirement, but failed to give examples of where installations were faulty.

Effectively, this embargo was indefinite and designed to exclude possible remedy, stated ISG Namibia's Eben de Klerk.

No justification

Paratus claimed that the City of Windhoek was delaying it as the municipality sought to apply for its own Class Network Facility Licence.

The City applied for its own licence, which, if granted, will allow it to enter the ICT sector.

However, states the ISG Namibia report, this does not justify the City's obstruction of other operators in expanding their networks.

“[Even] if the application succeeds, the City will not be allowed to favour itself in any way above any other operator,” the report states.

It says the City's anti-competitive intentions may very well be sufficient evidence of an already existing breach of the Competition Act.

The report states that all operators want the freedom to choose whether to lease or build their own networks. This applies especially to big operators like Telecom, MTC and Paratus, who are in a better position to build their own fibre-optic networks.

“It is unfortunate that while, in a country with such a small population as Namibia, there are actually three operators who are both financially and technically able, at least to some extent, to expand a fibre-optic network for the citizens of its capital, that progress and the efforts of these operators are being frustrated,” the report concludes.

Paratus manager for regulation, John D'Alton said the City was delaying his company.

“The intention of the Windhoek municipality is not to compete on a fair basis, but a bid to monopolise the industry which should be seen as an act of anti-competitiveness an outright abuse of power.”

“Furthermore, these stoppages are issued in a bid to buy enough time within which the municipality attempts to itself apply to the Communications Regulatory Authority of Namibia for a communications licence to seemingly allow it to justify its abusive actions,” he added.


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