Media release: Data must stand – at least until the facts are known

16 November 2016
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The Data Must Fall bandwagon is astounding in having captured public and media indignation without a clear grasp of the underlying facts. Myths have become de facto truths. Consumers’ increasingly insatiable desire for data has been harnessed by partisan interests of business, government and NGOs to the extent that clarity of thought and rational thinking have been swamped by the data must fall frenzy. The facts tell a different story - one in which the cost of data in South Africa is average when compared to other countries and the headline-grabbing four country comparison is disingenuous and dangerous. Any proposed legislation must have a social economic impact assessment (SEIA) as mandated by Cabinet to avoid unintended detrimental consequences. This was the message delivered by Free Market Foundation’s executive director Leon Louw at a media briefing on 15 November in Johannesburg.

The key question is: “must data really fall”? And if so, why; by how much; who will benefit and at whose cost? And who and what are the undisclosed vested interests behind the campaign, including the private sector (big and small business), government and regulatory capture, activists and hidden agendas, experts, civil society etc?

High data charges are not news – the debate has raged for several years. What is new now is two fold. Smart phones and applications are gobbling up data at alarming rates and the current #Data Must Fall campaign is spearheaded by two entrepreneurs whose business model relies on cheap or free data.

Louw laid out the FMF interest saying, “The FMF seeks to prevent knee-jerk government intervention by heavy handed regulation. Our intial research clearly shows that data cost is a complicated and complex story and that costs are not ‘outrageously high’. There is no one single cost of 1GB in any country.”

“Cross country comparisons are misleading in that countries differ enormously in terms of population, geography and development,” he said. Market failure could be ruled out as a cause of high prices as there is effective competition between providers.

“There ain’t no such thing as a free lunch - TANSTAAFL. Someone has to pay for the investment in network and roll out,” he said. “Everyone wants cheap data but we also need roll-out, quality of coverage and the latest technology. In South Africa we also want to include the poor and marginalised especially in rural areas. Mobile network operators (MNOs) are mandated to provide free data to schools and educational institutions. These come at a price.”

The role government has and is still playing with regard to high data prices is significant. The failure to transition from analogue to digital for radio and television means a relatively cheap spectrum cannot be utilised by the MNOs to increase and improve services.

Louw said that there is a danger of counter-productive intervention where regulation is a disincentive to MNOs to invest further in roll out.

Louw asked why are data costs for the poor being singled out? Why not housing, soccer tickets or food? Should Pick n’ Pay be asked to charge lower prices to poorer customers? He quoted the *AfricaCheck report which debunked the idea that the poor spend 20% of their income on data.

There are calls to make access to data a “human right” citing United Nations resolutions regarding articles 19 and 22, and section 16 of our Constitution. However, these all guarantee freedom of expression and communication and nothing in them implies an obligation to provide a means of communication.

Reports suggest that as much of 80% of data is used for social media.

Louw said that complexity is a critical issue and that MNOs do themselves no favours in bombarding consumers with a myriad of badly explained deals that baffle even their call centre and shop staff.

“Re-farming” is an issue. Due to insufficient spectrum allocation, MNOs are forced to waste billions in superfluous infrastructure and divert existing resources from 2G which serves mainly poor and remote communities to costly 4G.

The FMF is promoting a climate of informed opinion by encouraging the media to seek answers to critical questions.

Ends


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