Digital discrimination: The need to realise universal access to the internet
- On 2 December 2019, the Competition Commission of South Africa published its final report in the Data Services Market Inquiry.
- The report makes important findings and recommendations to achieve universal access to the internet, including relief on data pricing and the need to develop alternative infrastructure to achieve public access.
- Going forward, much work will need to be done to ensure implementation and enforcement, coordination, and user safety online.
The importance of universal access to the internet
On 2 December 2019, the Competition Commission of South Africa published its final report in the Data Services Market Inquiry. The report makes damning findings of the current limitations on access to the internet in South Africa – particularly for poor and marginalised groups – and calls for a significant overhaul by mobile operators and other key stakeholders going forward. Notably, the recommendations of the Competition Commission are aimed, in significant part, at the current “anti-poor retail pricing structures” and “exploitative price discrimination” that currently persists in the country. As explained by the Competition Commission (emphasis added):
The Commission has identified a final package of recommendations that provide immediate relief to high data prices, especially for low-income consumers, combined with initiatives to improve mobile price competition and greater infrastructure alternatives to consumers over the medium term. The full implementation of this package of remedies will not only lower prices for all consumers, and particularly the poor, but will lead to greater economic and social inclusion moving forward as the country moves into the digital age. The full implementation of the package of remedies is also essential to provide the necessary building blocks for South Africa to participate fully in the Fourth Industrial Revolution and take advantage of the opportunities that revolution presents. Participation in the future digital economy requires low data prices to support a broader consumer and industrial demand required to make digital platforms and solutions commercially viable. It also requires competitive mobile and fibre infrastructure markets to ensure prices remain low as investment and development of new technologies, such as 5G, are rolled out.
However, the importance of the Competition Commission’s recommendations goes further than this. Access to the internet is fundamental to enabling the enjoyment of the full array of human rights, including freedom of expression, access to information, assembly, education, health and equality. It also enables members of the public to participate in the digital economy and realise their full potential through digital citizenship. Both the United Nations (UN) and the African Commission on Human and Peoples’ Rights have held that the same rights that people enjoy offline apply equally online, and called for states to take proactive measures to give effect to this.
It is telling that in November 2018, the South African government received a recommendation from the UN Committee on Economic, Social and Cultural Rights (CESCR) regarding access to the internet. In it, the CESCR expressed its concern at the limited access to the internet in the country, particularly in rural areas and in schools, as well as the lack of affordability of the internet for the most disadvantaged groups. The CESCR went on to recommend that South Africa “adopt relevant measures to ensure the accessibility and affordability of the [i]nternet, particularly in schools and rural areas and for the most disadvantaged groups”. However, not enough has been done since then to meaningfully remedy this quandary.
In September 2019, ALT Advisory assisted a coalition of organisations – Media Monitoring Africa, the South African National Editors’ Forum, the Interactive Advertising Bureau of South Africa and the Association for Progressive Communications – in the development of a 7-point plan to realise universal access to the internet in South Africa. In this regard, the 7-point plan calls for the implementation of the following measures:
- Free public access to the internet at government sites.
- Zero-rated access to government websites and data.
- Free public wi-fi in public spaces, particularly in rural areas.
- The allocation of a tranche of data as a free basic service.
- The roll-out of media and information literacy training.
- The implementation of minimum protections in the provision of free basic access.
- Monitoring and oversight to ensure the progressive realisation of universal access to the internet.
It is, therefore, a welcome development that the report of the Competition Commission coheres with the recommendations called for in the 7-point plan. In particular, three of the key recommendations of the Competition Commission directly align with that of the 7-point plan. These important aspects are discussed below.
Report of the Competition Commission
A significant portion of the report of the Competition Commission is dedicated to the high cost to communicate in South Africa. As noted, data from the International Telecommunications Union (ITU) reveals that South Africa ranks poorly when compared to a global selection of countries, as well as when compared to African countries as a group. While prices have declined in other jurisdictions, the position has in fact worsened in South Africa over time, with operators having failed to establish that cost and quality factors account for the price difference in the country.
A key section of the report deals with anti-poor retail pricing structures and the lack of transparency. The report notes that lower-income consumers, who purchase smaller data bundles, are faced with inexplicably higher costs per megabyte. The Competition Commission expresses the view that poorer consumers are therefore unduly exploited relative to wealthier consumers. According to the Competition Commission, “the evidence is consistent with larger operators being actively engaged in exploitative price discrimination and partitioning strategies in order to push up margins and prices”.
The Competition Commission further finds that price-based competition in mobile markets is inadequate and that a lack of spectrum and cost-based facilities access drives up costs. On this note, the state also has the responsibility to bear, as it was a common cause that the failure to release the spectrum due to the delay in digital migration had raised costs unnecessarily.
The Competition Commission also highlights the need to address the fixed-line support gap for alternative data services. This issue links directly to the importance of public data services, such as public wi-fi and community networks. As noted by the Competition Commission, this offers the potential to provide cheaper – or free – data services and serves as an important alternative source of competitive pressure to bring prices down. The Competition Commission, therefore, calls for the development of these services to become more pervasive, particularly to reach poorer communities and the need for scalable models that move beyond a single community or municipality.
Recommendations of the Competition Commission
The Competition Commission goes on to make a number of significant recommendations. This includes the need for immediate relief on data pricing, including for Vodacom and MTN to reach an agreement with the Competition Commission “on substantial and immediate reductions on tariff levels, especially prepaid monthly bundles, within two months of the release of the report”. According to the Competition Commission, the preliminary evidence suggests that there is scope for price reductions in the region of 30% to 50%. Added to this, the Competition Commission further requires Vodacom and MTN to reach an agreement with the Competition Commission on a reduction in the headline prices of all sub-500 megabyte 30-day prepaid data bundles, to reflect the same cost per megabyte as the 500-megabyte 30-day bundle or cost-based differences where such differences have been quantified.
Linked to the 7-point plan referred to above, the following recommendations of the Competition Commission also bear highlighting:
- Lifeline package of daily free data: All mobile operators must reach an agreement with the Competition Commission, within three months, to offer all prepaid subscribers a lifeline package of daily free data to ensure all citizens have data access on a continual basis, regardless of income levels. This agreement must then be given formal legislative or regulatory effect within six months. The precise level of lifeline data and any annual adjustments are to be determined in consultation with the industry, the Independent Communications Authority of South Africa (ICASA) and relevant experts. According to the Competition Commission, this must be “sufficient to ensure each citizen’s participation in the online economy and society”.
- Zero-rating of content from public benefit organisations and educational institutions: All mobile operators must reach an agreement with the Competition Commission, within three months, on a consistent industry-wide approach to the zero-rating of content from public benefit organisations and educational institutions to ensure broad application. This agreement should then be given formal regulatory status within six months of the report. The process should seek to establish clear principles and criteria to be applied, as well as an application process for those public benefit organisations and educational institutions that seek zero-rating. These criteria should expressly include greater zero-rated access to content in African languages.
- Development of alternative infrastructure to provide data services: As noted by the Competition Commission, the development of alternative infrastructure to provide data services in lower-income areas, as well as smaller secondary cities and towns nationally, will provide off-load opportunities from the mobile networks to free or lower-priced public wi-fi services. Accordingly, the Competition Commission recommends that the national government consider providing investment incentives for network rollout in low-income areas, for example through the form of tax breaks or financial support from the Universal Service and Access Agency of South Africa (USASA). Further, the Competition Commission recommends that the government should actively promote the development of free public wi-fi in low-income areas, as well as the creation and entry of community networks, with an ultimate objective of every municipality providing free and affordable wi-fi services in public areas within the boundaries of the municipality. The Competition Commission also calls for ICASA to consider models and regulatory changes to allow non-profit community networks, and possibly small commercial enterprises, to access licensed spectrum not used by mobile operators in rural areas.
Where to next?
The report of the Competition Commission is only the first step; now the real work begins. The recommendations of the Competition Commission implicate a range of different stakeholders, and public vigilance is needed to ensure that those responsible are held to account. Three key considerations need to be borne in mind going forward:
- Implementation and enforcement: Much of the efficacy of the Competition Commission’s recommendations will depend on the agreements that are reached with the operators, but it is also hoped that members of the public will be engaged to ensure that the final outcomes best serve the needs of the users who are most directly affected. The Competition Commission has indicated that where the necessary agreements are not reached, it may consider prosecutions within its legislative powers. Added to this, the Competition Commission has undertaken to institute ongoing monitoring of pricing levels and profitability into the future, until such time as the market becomes more competitive.
- Need for coordination: In order to ensure effective implementation and enforcement, it is imperative that there is appropriate coordination among the different state functions and a clear assignment of roles and responsibilities. As it is, ICASA is currently underway with its own Market Inquiry into Mobile Broadband Services, separate from that of the Competition Commission, and has published a discussion document for public comment. One of the recommendations of the Competition Commission regarding the development of alternative infrastructure is for a single government department or agency to be designated as responsible for driving these initiatives across the different departments and levels of government, which should establish a technical or advisory committee of experts to assist with advice and capacity-building.
- Ensuring users are safe online: The value of getting people online is significantly diminished unless they are safe when doing so. This requires appropriate measures to be taken to secure the relevant networks, as well as the implementation of media and information literacy programmes to ensure that users can guard against potential online threats and harms. This should, in particular, be focused on persons who have had limited access to the internet in the past, such as children and the elderly, and should be seen as a priority within the overall plan to achieve access to the internet. Added to this, the personal information of users should not be exploited in exchange for receiving free services. Users should be sufficiently empowered to be able to realise the full developmental potential that the internet can offer, and realise the maximum benefits that lie before them.
Even with the challenging task that lies ahead, there remains a reason to be cautiously optimistic that universal access to the internet will indeed become a reality in South Africa. It is hoped that all stakeholders will recognise the importance of the report, and act meaningfully and efficiently in giving effect to it.
Avani Singh is a Director and Co-founder of ALT Advisory. Avani writes in her personal capacity and her views do not necessarily constitute the views of ALT Advisory.
Please note: The information contained in this note is for general guidance on matters of interest, and does not constitute legal advice. For any enquiries, please contact us at [email protected].