Note, however, that this matter is far from over, with Telkom reportedly obtaining an urgent interdict from the Pretoria High Court to prevent Vodacom from using ducting in the Estate.
|1. Telkom had laid its copper network using manholes, sleeves and ducts (“the infrastructure”) which belonged to the Dennegeur HOA. When the HOA and Telkom could not reach agreement on upgrading this into a fibre network, the HOA entered into an agreement with Vodacom to use available space in the infrastructure to put down a fibre network.
2. Sometime after this was done, Telkom approached the High Court using something called the mandament van spolie. This is an old remedy under which someone (Telkom) claims that they had possession of something (the infrastructure) and that another person (Vodacom) came along and unlawfully deprived them of this possession. This is typically used where, for example, a landlord changes the locks of a tenant who is in arrears with rental payments. What is important to understand is that the Court was not concerned about the bigger picture of who was wrong and who was right: the only point of a mandament van spolie is to return possession to someone who (a) had possession and (b) was unlawfully deprived of it.
3. The High Court in Cape Town held that Telkom had proved that it had had possession of the infrastructure and further that Vodacom, when it installed its fibre network, had unlawfully deprived Telkom of possession of the infrastructure. It granted the application for a mandament van spolie and ordered that Vodacom should remove its fibre network (as by doing so it would restore Telkom’s possession to what it was before Vodacom deployed its network).
4. On appeal, the Supreme Court of Appeal (SCA) found that the requirements for granting a mandament van spolie had not been established by Telkom. While Telkom did have possession of the infrastructure it was actually using – not physical possession but a form of it derived from its rights under section 22 of the Electronic Communications Act of 2005 – the SCA held that that the facts did not establish that Telkom had possession of the unused space in the infrastructure.
5. So, there was no act of spoliation when Vodacom used the empty space in the infrastructure (because the requirement of possession by Telkom had not been established). Further, Vodacom had not materially disturbed Telkom’s possession of the space that Telkom was using, and Telkom could continue to exercise its rights to the space its cable occupied. In other words, Vodacom deploying its fibre network did not stop Telkom from operating its copper network.
6. It is also important to bear in mind that the facts of any particular matter will determine the outcome. The SCA, for example, made much of the fact that the manholes forming part of the facilities could be opened with a generic key as evidence that Telkom was not exercising physical possession of the infrastructure. More recently it is common for different network providers to have bespoke keys which allow only them to access manholes, and in these circumstances a court may come to a different conclusion.
What does this mean for HOA’s and fibre network providers? Is it possible to have an exclusive arrangement for only one fibre network to be deployed?
7. A network provider which enters into an agreement with an HOA is not relying on its rights under section 22 of the Electronic Communications Act. Rather it has a contractual right to use or lease the passive facilities for the deployment of its network. There is nothing preventing this lease or right of use from extending to the whole of the passive facilities. There is no law or decision preventing exclusivity in the provision of a fibre network: rather it is exactly what is provided for in South Africa’s National ICT Policy. This Policy says that network providers should have exclusivity as long as they promote competition on their network.
8. While choice of network providers may be attractive, HOAs should understand that this impacts on the commercial returns available for network providers and may disincentivise investment in fibre networks. Network providers will seek some reassurance where they are undertaking the upfront cost of constructing the network and ongoing cost of maintaining it. Instead the risks of having a single network provider should be offset by insisting that the provider operates on an open-access basis, allowing residents a wide choice of Internet Service Providers active on the network to drive down prices. HOAs should also consider provisions restricting price increases by the network provider as well as allowing for network pricing to be benchmarked against that found in comparable developments. Breaches of these provisions could lead to a loss of exclusivity.
This does not mean that a network provider does not have to share with other providers. Aside from being an open-access network provider, under ICASA regulations the provider may be required to provide capacity on its network to other network providers where it is requested to do so.
__[2 April 2019] In a judgement which should be welcomed by most of industry, the Supreme Court of Appeal (SCA) has overturned the position taken by the High Court in the matter of Telkom SA SOC Ltd vs Residential Estate Dennegeur (Pty) Ltd & Vodacom (Pty) Ltd, ruling on the facts of the matter that Vodacom’s use of the infrastructure in an estate to deploy fibre did not disturb Telkom’s use of that infrastructure to operate its copper network.
In an accompanying media release (not forming part of the judgement itself) it was noted that:
The Supreme Court of Appeal held that Telkom did not enjoy possession of the infrastructure or cables which formed part of Dennegeur and was owned, occupied and controlled by the Home Owners Association. Its rights are derived from the provisions of Section 22 of the Electronic Communications Act (the ECA). The rights conferred by s 22 of the ECA are in their nature servitutal. Sevitutal rights are incorporeal assets and not capable of physical possession. A party professing to be entitled to a servitutal right does, however, enjoy the legal protection against spoliation to the extent that it in fact exercised the professed rights prior to the alleged act of spoliation. Telkom exercised its rights to the extent that it laid down copper cables in the ducts, sleeves and manholes. Vodacom’s optic fibre network did however, not disturb Telkom’s use of the ducts and did not prevent Telkom’s operation of its network. It was accordingly held that Telkom did not possess the vacant space in the ducts and sleeves which was subsequently occupied by Vodacom and that Vodacom’s conduct was therefore not an act of spoliation. The Supreme Court of Appeal accordingly upheld the appeal.
__[12 December 2018] In our post of 8 April 2018 below we provide some analysis of the judgement of the Western Cape High Court in the matter of Dark Fibre Africa (DFA) vs The City of Cape Town. This matter was appealed by DFA to the Supreme Court of Appeal, which confirmed the High Court judgment in ruling in favour of the City.
__[21 May 2018] We have prepared a short note on the judgement of the High Court in the Western Cape in the matter of Telkom SA Soc Ltd v Kulu NO and Another, delivered on 10 May 2018. This judgement brings further clarity to the requirement for licensees to comply with municipal by-laws before exercising their rights under section 22(1) of the Electronic Communications Act.
__[8 April 2018] We have prepared a short note on the judgement of High Court in the Western Cape in the matter of Dark Fibre Africa v the City of Cape Town (14 December 2017) and its implications for the rights of electronic communications network service licensees to enter onto land and deploy networks without the consent of the landowner.
__[16 August 2017] The judgement of the High Court in the Western Cape in the matter of Telkom v Dennegeur Home Owners’ Association & Vodacom – delivered on 26 July 2017 – is relevant to the rights of licensees to lease electronic communications facilities as well as the rights afforded to licensees under Chapter 4 of the Electronic Communications Act.
In short: Telkom had an existing copper communications network servicing the estate, but could not reach agreement with the estate about deploying a fibre network. The estate instead entered into an agreement with Vodacom, which initially requested that Telkom lease it space in the ducting servicing the estate. Telkom refused and a dispute was referred to ICASA. Before this could be finalised, Vodacom began deploying its fibre network in the ducting in the estate.
Telkom approached the courts alleging that it had been in possession of the electronic communications facilities in the estate and that Vodacom had unlawfully deprived Telkom of this possession by deploying its fibre network.
The High Court agreed, and ordered that:
• Vodacom must restore the possession and state of Telkom’s duct infrastructure at the estate.
• Vodacom must remove all equipment and fibre cables from the infrastructure, restoring it to its original state.
• Vodacom and the estate’s Homeowners’ Association are to pay Telkom’s legal costs.
__[27 September 2015] The judgement of the South African Constitutional Court in the matter of City of Tshwane Metropolitan Municipality v Link Africa (Pty) Ltd and Others  ZACC 29 brings to an end the current judicial scrutiny of Chapter 4 of the Electronic Communications Act 36 of 2005 insofar as it relates to the rights of holders of electronic communications network services (ECNS) licences to enter onto private or public land or use pipes under streets for the purpose of deploying their networks.
In essence the majority judgement of the highest court in South Africa has confirmed that neither section 22 nor section 24 of the ECA is unconstitutional in the sense of allowing arbitrary deprivation of property. This confirmation was required due to the arguments raised that a licensee did not require the consent of the landowner or municipal authority before entering onto land or using existing infrastructure.