Telecom Regulatory
Authority of India Establishment and working — Experience regarding
The Constitution
An independent body consisting of a Chairman, a minimum of two Members and
maximum of six members (All seven in position at present).
< FUNCTIONS OF TRAI
Recommend
Need and timing for introduction of new service providers.
Terms and conditions of licence to service providers.
Revocation of licence for non-compliance of terms & conditions of a licence.
Type of equipment to be used by service providers.
< ENSURE
Technical compatibility and effective interconnection between different service
providers.
Compliance of terms and conditions of licence.
Effective compliance of universal service obligations.
Tariff Setting & related
functions haut de page
By order notify in the official gazette the rates at which the telecommunication
service within India and outside India shall be provided including the rates at which
messages will be transmitted to any country outside India.
Regulate arrangements among service providers for sharing their revenue derived
from providing telecommunication services.
Levy fees and other charges at such rates and in respect of such services as may
be determined by regulations.
< OTHER FUNCTIONS
Lay down the time period for providing local and long distance circuits for
telecommunication different service providers.
Monitor the quality of service and conduct periodical survey of such services.
Inspect the equipment used in the network and recommend the type of equipment to
be used by the service providers.
Maintain Register of Interconnect Agreement and of all such other matters as may
be provided in the regulations
-- Protect the interest of consumers of telecommunication service.
-- Facilitate competition & promote efficiency in the operation of
telecommunication services so as to facilitate growth in such services.
-- Perform such other functions including such administrative and financial
functions as may be entrusted to it by the Central Govt. or as may be necessary.
< POWERS WITH TRAI
Settle Dispute (Powers of a Court in-certain class of cases) -
Frame Regulations
Levy Fees
Fix Tariffs
Call for Information
Institute Enquiries
Sanction prosecution for disobedience.
< INDEPENDENT REGULATOR
-- TRAI's role as an independent and effective regulator has been ensured through
the following provisions in the TRAI Act:-
(a) Chairperson and Members of the Authority are to be appointed by the Central
Government after satisfying that the persons to be appointed do not have any financial or
other interest as is likely to affect prejudicially their functions as members of the
Authority.
(b) The term of appointment of Chairperson and Members is fixed at 5 years.
(c) Terms and conditions of appointment of Members once fixed cannot be changed
to their disadvantage.
(d) Members are barred from holding any office under State/ Central Governments
for life. Commercial employment cannot be taken up for two years after demitting office.
Scope of commercial employment includes consultancy work in any sector.
(e) The Central Government may remove from office any member on grounds of -
-- Insolvency
-- Incapacity
-- Conviction for offences involving Moral turpitude.
-- In case of conflict of interest and abuse of powers, removal will be possible
only after an enquiry by the Supreme Court of India.
Powers to Issue directives haut de page
Govt. has the Authority to issue directives, but only after consultation with the
Authority.
Transparency in working haut de page
All decisions/ orders to be published and included in the Annual Report to be
placed before the Parliament.
Decision - making to be transparent.
Source of Funding haut de page
Financial requirements to be met from grants sanctioned after due appropriation
by Parliament. The Authority can generate additional resource by levying fees etc.
Working/ Implementation hat de page
Telecommunications liberalization policy in India has had two major shortcomings
(a) sequencing of the reform process
(b) non-separation of the policy making and service provision functions of the
Government, giving rise to a conflict of interest in these roles.
This gave rise to Litigation by the Government on the jurisdiction of TRAI in the
matter of its -
recommendatory and dispute settlement powers.
presently at the stage of second appeal in the Delhi High Court.
Telecommunication Tariff Order, 1999 - its process and implementation -
-- a three-year programme of rebalancing of tariffs in which local call charges
and rental would increase and domestic long distance (DLD) and international long distance
(ILD) call charges would come down by 42 to 48 percent.
-- Transparent consultative process
-- hurdles in implementation.
The present predicament haut de page
Telecom services & segments in which liberalization has been undertaken so
far in this sector are, from all accounts, crisis ridden - mobile cellular sector, basic
services sector, paging services. Other value-added services such as E-mail etc which were
liberalized earlier have fared no better.
There is an emerging consensus that the genesis of this crisis is the abnormally
high licence fees by the successful bidders.
That is only a part of the story. The whole licensing policy, including in
particular the terms and conditions of licenses, the institutional arrangement for
implementation and enforcement of licensing conditions and response time to the problems
of the new entrants are also responsible for the present state of affairs.
Options to resolve the crisis -
hold the existing licensees to their commitments by revoking their licences for
non-performance of their obligations under licences including in particular payment of
licence fee, and start afresh on a new basis.
An excellent option provided a quick and clean exit of the existing licensees is
possible, but given the existing structure of the licences, their one-sided -nature and
laches on the part of the licensor in regard to the provision of resource etc the
prospects of prolonged legal battles cannot be ruled out.
The other cost in this option is the delay in licensing new operators.
Is it possible to renegotiate the fundamentals of these licences and can that be
done without credible legal challenge
The moral hazard question.
< NATIONAL TELECOM POLICY, 1999
a) endorses the basic thrust of the 1994 policy.
b) Recognizes its shortcomings which have surfaced particularly in regard to the
crisis faced by the private operators as a result of the high license fee regime which was
the outcome of an open bidding process.
c) envisages a big thrust for liberalization in an environment where both
technology and markets are converging.
-- shift to entry fee and revenue sharing regime for new licensees on the basis
of TRAI's recommendations .
-- a search for modalities to allow migration by the existing licences to a
revenue sharing regime.
-- DLD opening by January 1, 2000
-- Modalities for liberalization and terms & conditions of licenses to be
recommended by TRAI.
-- Many other liberalizing features.
-- WTO reference paper -
-- on independent regulators, while India has accepted that decisions and
procedures by the regulating authority shall be impartial with respect to all market
participants. It has made no commitments on separation of the regulator and the issue of
accountability .
-- This is of no practical consequences in view of the provisions of TRAI Act.
< Decision-making procedures
< How transparent?
Consultation Papers issued haut de page
-- On Telecom Pricing
(i) Concepts, Principles and Methodologies. 4th Nov. 1997
(ii) Framework and Proposals 9th Sept. 1998
-- Quality of Service 2th Nov. 1998
-- Regulations for meeting 15th June 1998 the Funding requirements of TRAI
-- Maintenance of Registers for Interconnections. 3rd Dec. 1998
-- Licence fee determination for Radio Paging Services. 21st Dec. 1998
-- Paper on Number Plan - I 4th Dec. 1997
-- Paper on Number Plan - II 24th July 1998
Determinations issued haut de page
-- Telecommunications Tariff Order, 1999 9th Mar, 1999
-- Telecommunication Interconnection Charges
-- & Revenue Sharing/Regulation, 1999 28.5.99
Concluding remarks haut de page
What does all this mean for the TRAI as an effective independent Regulator?
This has two aspects -
(i) Freedom in decision-making
(ii) Powers and Functions.
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