Commission seeks heftier Telkom fine

Competition Commission says the Competition Tribunal erred in fixing the fine against Telkom at the level it did and argues the penalty should have been set at a "materially higher level". By Craig Wilson.

Not only is Telkom appealing against the Competition Tribunal’s ruling that found the fixed-line operator guilty of anticompetitive behaviour, but now the Competition Commission has filed a “cross appeal” against sections of the tribunal’s findings and wants Telkom to face a higher penalty than the R449m the tribunal imposed on 7 August.

The commission appears to believe that it proved the conditions for a conviction on grounds other than those the tribunal found and that the tribunal should have taken other mitigating circumstances into consideration in its ruling and in setting the fine imposed on Telkom. The original penalty proposed by the commission was in excess of R3bn. It still wants a fine of that magnitude imposed and says the tribunal erred in setting the penalty as low as it did.

Both Telkom’s appeal and the commission’s cross appeal mean that the operator isn’t required to meet the requirements of the tribunal’s ruling – including settling half of its R449m fine within a year.

But there is now also the risk, should the commission be successful in its cross appeal, that Telkom could be slapped with a bigger fine along with a broader precedent.

“Telkom has received the Competition Commission’s notice of cross appeal … and has taken note thereof,” a company spokesman tells TechCentral. “The commission is fully within its rights to cross appeal those aspects of the tribunal’s ruling it does not agree with. The matter will now proceed to a hearing of the appeal and cross appeal by the competition appeal court…”

Dominic Cull, regulatory advisor at the Internet Service Providers’ Association (Ispa), says the commission has the right to cross appeal and wants a higher sanction imposed. He says the commission is arguing that the tribunal has given insufficient weight to the factors the commission advanced.

Cull says that, from an Ispa perspective, given Telkom’s recent failure to include other rival service providers in trials of its new 20Mbit/s and 40Mbit/s broadband services, the “current sanction doesn’t seem to have the desired effect of modifying [the company’s] behaviour”.

“We’re still seeing what we regard as anticompetitive behaviour from Telkom and, as such, we welcome the commission’s intervention,” Cull says.  — (c) 2012 NewsCentral Media