Despite the key role of the Telecom Regulatory Authority of India (TRAI) in the sector, it does not have complete independence in its functioning and continues to face interference from the government. Industry experts are of the view that more powers should be given to the regulator. At the same time, the government should explore the option of forming another independent agency to regulate issues related to content creation and distribution. Sector experts share their views on the regulatory scenario in the sector…

What are your views on TRAI’s powers and competence?

Govind Gaiha

In my opinion, the current powers distributed between TRAI and the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) is an outstanding balancing act by the statute makers. There should not be any change at present and we may wait for further proliferation of the broadcasting sector, with digitisation. After digitisation, the broadcasting sector will become almost self-regulating, like the telecom sector, and it will be possible to place most of the issues in forbearance, while TRAI shall play the role of regulating the sectors from the point of view of induction of the latest, state-of-the-art technology.

Hemant Joshi

TRAI has many powers as the regulatory body of the Indian telecom sector, which is helping the growth of the industry and keeping a tab on disputes. Some of its important roles are as follows:

• Serving as adviser to the Department of Telecommunications (DoT)
• Carrying out general administrative and regulatory functions for the telecom ecosystem
• Fixing tariffs and rates for the telecom services.

TRAI is working efficiently for the growth of the telecom ecosystem, but it could carry greater influence with additional power and more freedom.

Brijendra K. Syngal

TRAI, which happens to be the first independent regulator in India, was established in 1997, pursuant to a TRAI ordinance that was later replaced by an act, as an urgent need was felt for a regulatory body in the sector. Since its establishment, there have been definite changes in the sector. TRAI was supposed to protect consumers and ensure the proper functioning of the market. However, the power to issue licences has remained with the government. It should be noted that the regulator came after competition had already begun, thus causing some distortions. For a regulator to be independent in the true sense, it needs to have functional and financial independence from the government. In the case of TRAI, after the initial few years, there has been a weakening in its functional independence. There are various ways in which the government continues to exercise control over TRAI. First, the central government is allowed to issue binding directions to TRAI from time to time. Second, the authority’s funding is largely derived from grants made available from the government. Third, the government can make rules on a wide variety of subjects and these rules are binding on the authority. Section 25 of the act is considered an innate shortcoming, as it does not fulfil the underlying legislative intent to establish an independent regulator for the sector. Further, DoT has consistently ignored various important decisions made by TRAI, without so much as seeking consultation on the matters.

Dr Mahesh Uppal

TRAI has substantive powers in tariffs and interconnection, where it can act unilaterally without any need to involve the government, which has no veto or binding say on the subject. However, its powers over key functions such as licensing and spectrum management are chiefly recommendatory. In recent years, the government has not accepted or simply kept pending several of TRAI’s recommendations on mobile virtual networks, spectrum sharing, spectrum trading and auction design.

The body’s competence has improved, but there is still a long way to go. It has relied on DoT and other government departments for its staff. It has not been able to attract or pursue professionals outside the government. This has often given its output and approach a bureaucratic rather than a professional feel. A case in point is its recent work on unified licensing, which has made little impact.

TRAI has played a significant role in shaping the telecom sector. However, in light of the changing industry dynamics, is there a need to rethink its role and powers to make it a more relevant and powerful authority?

Govind Gaiha

TRAI has done a tremendous job in issuing regulations, not only for interconnection, but also by issuing tariff orders and creating a benchmark for quality of service by observing a process of consultation amongst all stakeholders. The credit for the induction of a large proportion of FDI in the telecom sector since the inception of the process of privatisation goes to TRAI and the TDSAT. The amendment to the TRAI Act in 2000 created another statutory body, the TDSAT, which complemented the functions of TRAI as an independent dispute settler. It became possible for aggrieved stakeholders to appeal against the regulations issued by TRAI before the TDSAT. Recently, a Supreme Court judgment has decided that the regulations issued by TRAI can only be challenged before the high courts, while the tariff orders can be still be challenged before the TDSAT. The two statutory bodies, TRAI and the TDSAT, have together created tremendous confidence among investors, which has resulted in the exponential growth of the telecom sector over the past two decades.

Hemant Joshi

TRAI is doing a wonderful job and yes, its role and powers can be changed to make its presence more relevant. The telecom market is slowly moving towards maturity and there will be some major mergers and acquisitions in the future. The market is expected to consolidate with six to seven big players and there is a need for a strong regulator to control the market. TRAI is not a fully independent body. The government’s influence has made it more of an adviser than a regulator. Giving complete autonomy to TRAI can make its role more relevant.

Brijendra K. Syngal

The government has refused to take any strict policy decision to provide clarity and specify the role of regulatory bodies like TRAI, the degree of their independence and their accountability, among other things. The role of TRAI, to achieve predetermined policy objectives and maintain competitive conditions in the market by ensuring that everyone follows the basic rules of the sport, has been diminished and disregarded. And the role of policymakers is to provide the long-term objectives and vision for the development of a country. A bitter divorce between the two bodies is definitely not desirable, since a proper agreement between them is very important for ensuring effective governance. At the same time, it is important to ensure that the regulator’s domain is not encroached upon by the government in the name of achieving policy objectives, which is the clear case in India. There is an urgent need to create a clear distinction between policy and regulation, which is missing in the sector, and which the government has been neglecting for many years.

Dr Mahesh Uppal

Yes, the rules must be changed to ensure that the government does not interfere with TRAI’s recommendations, which have been arrived at after due analysis, consultation and process.  The regulator must have the resources and authority to attract and retain competent professionals. The government must allow it to become a subject specialist body and treat it like one.

What steps should be taken to improve coordination between the regulator and the policymakers?

Govind Gaiha

The executive, that is, DoT and the Ministry of Information and Broadcasting, has to seek TRAI’s opinion on almost all important issues related to licensing, tariff fixing, etc. Besides this statutory power, TRAI has also been empowered by the act to advise the government suo moto. The government has to either accept TRAI’s recommendations or refer them back to TRAI for its reconsideration. The authority may, within 15 days from the date of receipt of such reference, forward its recommendation to the government after considering the reference made by the government.

Hemant Joshi

Some of the measures could be:

• Eliminating all government influence over TRAI
• More powers to be ascribed to it
• Decisions to be made based on mutual agreements between TRAI and DoT.

Dr Mahesh Uppal

There must be a time limit of around six months for the government to dispose of TRAI’s recommendations. The government should review the recommendations but not change or ignore them unless TRAI has manifestly erred in its analysis or process. I believe the government’s recent treatment of TRAI’s recommendations on spectrum auctions would not meet these criteria. The government must, of course, have the final authority on matters of safety, security and foreign affairs.

With the emergence of new platforms for content creation and distribution, is TRAI equipped to come up with the relevant regulatory frameworks?

Govind Gaiha

TRAI is well-equipped to come up with relevant regulations for all platforms since the function of all types of platforms is finally to provide a good quality signal to the subscriber. The costing of the platforms and its resultant effect on the tariff has been efficiently handled by TRAI. The authority is well-equipped to handle all issues related to a variety of platforms. It can handle issues related to transmission and reception of signal. However, for content regulation, a specialised body can separately be created. This body may consist of experts from different social sectors and other walks of life. Except for content regulation, all other functions can be carried out efficiently by TRAI. In conclusion, the role played by TRAI and TDSAT is commendable and this combination is a role model for many other developing countries, if the ultimate objective of providing telecom for all and removing the digital divide is to be achieved.

Hemant Joshi

TRAI has limited power, which revolves around the telecom ecosystem. In order to create content-related regulatory frameworks, TRAI needs more power. Content creation is an entirely different platform and this segment has its own regulators like the Censor Board, the Competition Commission of India and the Ministry of Information and Broadcasting. For creating content-related frameworks, TRAI needs to work closely with these regulatory bodies. Content aggregators, broadcasters and distribution platform operators can also play a significant role in building a good regulatory framework.

Brijendra K. Syngal

Infrastructure development plays a crucial role in building a robust telecom network. Communication has now become a basic requirement, and the necessary infrastructure to fulfil this requirement needs to be created. Content and infrastructure are very different and, therefore, need to be dealt with separately.

Dr Mahesh Uppal

No, TRAI has been largely focused on networks, infrastructure and services. It has limited expertise and perspective when it comes to issues around convergence. Its focus on licensing and fees is a serious handicap in dealing with convergence. This factor is reflected in India’s relatively poor performance in internet and broadband.

Should TRAI only look into infrastructure-related issues and policies while content should be regulated by another independent agency? If so, why?

Hemant Joshi

Yes, it is a good option to have a content regulator. Content is an entirely different subject, and needs to be regulated by different regulators. TRAI has limited power and experience in content management and regulation. Countries like Malaysia and Korea have tried and failed to combine content and carriage regulation. Content regulation can be handled better by the Ministry of Information and Broadcasting.

Dr Mahesh Uppal

TRAI must focus on networks, infrastructure and carriage services. Technology and the internet in particular have blurred the traditional boundaries between computing, telecommunications and broadcasting, frequently making them indistinguishable. TRAI should shift its traditional focus from licensing, which prevents it from becoming a true enabler of convergence. The value of its coming recommendations on over-the-top services or network neutrality will depend on how well it internalises its new challenges. It should focus on removing all barriers (like licensing and levies) to the introduction of any technology or service that could benefit and empower consumers.

There should be no role for TRAI in matters related to content. For example, it should not determine what is suitable to be aired on radio or television, or whether an NGO, civil society or political party is fit to provide it. However, it must have power over all other communications-related regulatory functions, which are currently with ministries like the Ministry of Information and Broadcasting, the Department of IT and the Department of Space.