Imagine a traffic police officer who does not have the power to fine a motorist who jumps a red light! This is precisely the problem the Telecom Regulatory Authority of India, or Trai, is currently facing. The telecom regulator has the responsibility of framing the regulatory norms that should govern the operations of all telecommunication companies. However, it cannot impose a fine or some other penalty on an errant company. The preposterousness of the situation becomes blatant with the manner in which the government framed the Trai Act, which gave legislative sanction to the powers of the telecom regulator. Trai can frame the rules of the game, but it cannot book an offender. For that, it has to knock on the doors of a separate appellate body, the Telecom Disputes Settlement and Appellate Tribunal, or the courts. If Trai has been found wanting in enforcing some of the rules of the game that it framed in the past several years (for instance, the poor adherence to the do-not-call-registry system created to prevent marketers of products and services from making unsolicited calls to telecom subscribers), a good part of the blame should rest with the regulator’s inability to penalise the errant companies.
It, therefore, comes as no surprise that Trai should be asking the government to amend the Trai Act to give it the requisite powers to penalise companies for violating rules. Trai has suggested that it must be able to penalise a telecom company that refuses to furnish documents or returns, fails to maintain accounts and records or fails to supply information within a stipulated deadline. The arguments in favour of a suitable amendment to the Act to empower Trai are unexceptionable. Many other regulators such as the Securities and Exchange Board of India and the Competition Commission of India have the powers to impose penalty on market participants flouting rules or companies indulging in anti-competitive practices. They too have appellate bodies, but that system has not denied the regulator the primary powers to penalise errant behaviour. So, Trai has simply sought the extension of the same principle to empower itself through necessary amendments in the legislation.
What comes as a surprise, however, is the stance adopted by the Department of Telecommunications (DoT), arguing for maintaining status quo. The DoT’s arguments are rooted in the belief that the original Trai Act had not envisaged adjudication of regulations as one of the responsibilities of the telecom regulator. That may well be true, but what may have been the logic at the time of the Act’s formulation need not necessarily continue to be an alibi for perpetual inaction in spite of reasoned arguments in favour of changing the law. As subsequent pieces of legislation on other regulators have shown, regulation without penal powers can often lead to ineffective regulation. It may be reasonable to argue that regulators armed with such powers should be adequately equipped to undertake those onerous responsibilities so that there is no miscarriage of justice. Equally reasonable is the argument that such powers of adjudication should incorporate necessary checks and balances within the system. An efficient system to redress such grievances with a vigilant appellate body becomes a necessary and integral part of a regulatory framework. There is no reason why Trai should be excluded from such a framework. A regulator without teeth weakens regulation. What the DoT should worry about is to ensure the functioning of an effective and efficient appellate body, not a telecom regulator with powers to impose fines.