Trai chief ‘not consulted on 3G rules change’

NEW DELHI; The regulator has not been consulted before the government amended the 3G (third generation) telecom service guidelines, according to Nripendra Misra, chairman of the Telecom Regulatory Authority of India (Trai).

Although he is yet to study details of the amended policy, Misra says it is tough to separate 3G revenue from the overall revenue of a company for paying the annual spectrum usage charge as per the changed norms.

Misra also points out that his biggest concern is the frequent  legal scrutiny of Trai’s norms by the stakeholders, including the incumbent. He said that in other parts of the world, challenging telecom sector regulations is very rare. Excerpts from an interview:

The department of telecommunications (DoT) has amended the 3G (third generation) telecom policy guidelines within a month of issuing the same. What is the Trai view on it?
I am yet to study the details. I don’t have the authoritative version and the circumstances in which the amendment was made. If there are minor amendments, I can understand as sometimes you make a slip here or a slip there.

When the previous guidelines were issued, we ourselves pointed out that some amendments were required. For instance, if the policy mentions only data and not voice, it should mention both in terms of service which can be offered. But, if it is a major amendment, I don’t know. After all, DoT also has a process of inter-ministerial consultation and Telecom Commission. So, what has come and why it has come, I would not know. We have not been consulted.

The amended policy says that 3G players will have to pay an annual spectrum usage charge of 1% of the incremental revenue coming from 3G services after the first year of operation, rather than 1 per cent of the company’s AGR. What do you think of that?
I have to study it. If media reports are correct, DoT has itself said that details will follow for the method of calculating the 3G revenue of a company. Clearly, it’s a major exercise to separate the 3G revenue from the overall revenue. How do you do it?

Do you think it’s possible to separate the 3G revenue from the overall revenue?
I cannot comment on that.

Trai has to deal with the industry and the government. Who is more difficult to deal with?
Nobody is difficult. I’m doing my job. For example, if I send my recommendation, and the government does not accept it, why should I be sensitive to that?

I have done my job. Likewise, if the telecom companies, after seeing the regulations, challenge the same, I have done my job. The next step is for me to contest that. No comparisons because the two (government and service providers) stakeholders are very different. One is a superior body as it is the licensor. The other is the service provider. I have had tremendous cooperation also with the service providers in many cases.

As regulator, what is your biggest concern now?
My main concern is the issue of legal scrutiny (of Trai’s directives). In this country, the companies, including the incumbent, cable operators and direct to home (DTH) players, have a tendency to challenge the regulations in the court. If you analyse, after the challenges, 90 per cent of the decisions have been upheld.

Therefore, one has to see why companies are paying so much money in challenging the TRAI regulations. I personally feel that perhaps there is a need to enforce preliminary scrutiny before an appeal gets entertained. It will filter out the trivials. Unlike other sectors, the telecom laws are still evolving. And it is a tribute to the Tribunal (TDSAT) for their judgements, which have set trends for growth of telecom infrastructure. But if the tribunal gets burdened by the trivial, then the important ones will be crowded out.

Do you think it is possible to weed out the trivials?
I think it would require some kind of self discipline on the part of the stakeholders, particularly the service providers. They can give a certain degree of respectability to the regulator and his work. It’s not something that the courts can do because courts have to entertain appeals. It will be very difficult to evolve a conscious interventionist policy.

What is the trend in other parts of the world?
In the US, UK and other European countries, the regulatory instructions and directions are not subject matter of legal scrutiny immediately. The level of litigation that you see in India is not there in other parts of the world. Definitely not in the US and UK. I asked the chairman of Ofcom (the telecom regulator in the UK) as to how many cases are filed against the Ofcom regulations, he said it is an exception. We also have to think where the legal lacunae lies that so many regulations are getting challenged. We are not able to pinpoint the lacunae.

Trai has come out with several consumer-friendly recommendations, regulations and orders in recent times like transparency in tariff and allowing Internet telephony, among others. What’s next on the agenda?
Their implementation is the most important aspect in this. The Trai recommendations, which have been sent to the government, must be implemented. If the recommendations do not get a decision, what do you do?

Our objective is growth along with consumer welfare, instead of just growth. With this in mind, we recommended number portability, MVNOs (mobile virtual network operations) and VoIP (voice over IP). These steps have been widely accepted. While these recommendations have gone to the government, their acceptance is awaited. In the broadcasting sector also, several recommendations have gone but they are awaiting implementation. Unless they get implemented in a timeframe, we are nowhere.

Is the regulator facing any opposition from the telecom operators on some of the orders/regulations like transparency in tariff?
No opposition as such. But when you come out with regulations which are likely to impact the profit of a company, it is not liked. But, cost to the access provider is taken into consideration before TRAI comes out with a regulation.

Also, we try to find out whether a regulation would take away a company’s surplus, which is so necessary for infrastructure expansion. Another point that is looked at is whether a regulation is justified with reference to cost. Even so, there have been industry representations. But even if companies have reservation against some of the TRAI regulations, they should realise that many others are helping them like abolition of ADC (access deficit charge). From September 30, everyone will be put on the same pedestal when ADC goes away completely.

On value-added services (VAS), is a major recommendation expected soon?
No, I don’t think it’s going to come very soon.

Is there any move to slash the SMS rates?
We are not working on that.

What are the chances of political parties being permitted to launch broadcasting companies or cable firms?
It is perfectly possible that you may not float a broadcasting channel in the name of a political party, but you can definitely have promoters who have political leanings. You cannot stop that. I think the government will take a view once it receives advisory from other bodies like Centre State Commission because Federal system issues are involved here.

Isn’t a government decision likely before the forthcoming elections on political parties floating TV companies?
I don’t think there’s any connection with elections. It is perfectly possible that the government may not take a decision on this before the elections.