The Trai/TDSAT process has several problems right now.
With the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) readying to celebrate its 10th anniversary in a few months time, this is the right time to ask if the new regulatory/appellate structure that was put in place a decade ago is working in the manner envisaged — that is, to deliver justice, and speedily. Given that the sector is adding more than 10 million subscribers per month and investments continue to pour in, you’d think the question is redundant. Yet that’s not strictly true since, on critical issues, most players (and wannabe players) remain quite aggrieved — indeed, the way things are, even the regulator, Telecom Regulatory Authority of India (Trai), and the appellate body, the TDSAT, are challenging each other’s powers in various fora!
As a result, the efficiency of the system critically depends upon who is in charge of each body — while individuals always matter, what makes Trai/TDSAT different is that the heads of these bodies are chosen by the telecom ministry, the body that Trai/TDSAT is supposed to replace in terms of policy-making and redressal. Since the bulk of the complaints relate to Trai/TDSAT playing favourites, fixing this is critical. One solution is to free their finances from the telecom ministry and make these bodies report to the law ministry; ditto for their selection process which also needs to move away from selecting just bureaucrats as Trai chief. To give an example, the telecom minister is currently deciding on whether or not to increase the tenure of the Trai chief from three to five years — so any Trai chief who goes against the minister can be sure his tenure won’t be increased!
A 10-year review also needs to do something about the powers of Trai and the TDSAT. For one, Trai has only recommendatory powers and that ensures it is virtually toothless on critical issues — in the recent case of the 2G spectrum allocations, for instance, this is what allowed the minister to do exactly as he chose. In the case of the interconnect agreement that determines the terms on which telecom companies will allow access to their networks, similarly, the TDSAT ruled five years ago that Trai had no jurisdiction on the matter — Trai challenged this in the Supreme Court where no final ruling has been given. This is critical since it means that if operators have a dispute, there is precious little Trai can do. When RCom launched its new GSM mobile services, this became a serious problem since the older GSM operators refused to sign interconnect agreements that would allow its subscribers access to/from their networks. Things were finally resolved at an informal level by the then Trai chief, but imagine the confusion if RCom had to challenge each operator in different courts (RCom could have gone to the TDSAT but Trai would have challenged this saying this was its prerogative!), and each court had ruled differently! The fact that interconnect agreements (as opposed to interconnect usage charges, or IUC!) are not a Trai prerogative means that, for instance, it can do nothing on complaints against BSNL’s restrictive practices.
Or take the issue of TDSAT’s powers. While the TDSAT is the appeals bench for Trai decisions, over the years, Trai has been couching some of its decisions as “regulations”, and then saying these cannot be heard by the TDSAT! So, aggrieved parties have to go to various high courts where they could be stuck for years. Indeed, Trai’s latest order giving the new IUC rates has been challenged by various parties before the TDSAT where Trai is arguing the former has no locus standi to rule on it! What complicates matters is that in a parallel case involving a challenge to the Central Electricity Regulatory Commission (CERC) before the Appellate Tribunal for Electricity, or Ate, which is the electricity counterpart of the TDSAT, Ate has ruled it cannot rule on CERC regulations since both bodies were created under the same statute (as were Trai and the TDSAT!). This isn’t a theoretical problem, it causes real complications. In the case of the arbitrary allocation of GSM licences in 2008, the TDSAT has ruled there was no problem but the Delhi High Court has ruled (in the STel case) that there was a serious problem — how does the government reconcile and implement both rulings and which judgment does industry take as the operative one?
A related problem that arises, of course, is who can appeal to the TDSAT. The reason why STel went to the high court and not to the TDSAT was that, under the current law, only telecom licencees can appeal to it — in the GSM licence case, the aggrieved parties were the firms that wanted to come in but couldn’t, thanks to the minister playing favourites and allotting the licences to a chosen few. So, apart from limiting the access to speedy justice, this creates the additional problem of different judgments which cannot be reconciled.
Perhaps another solution lies in law minister V Moily’s suggestions about having a separate commercial bench in each court to deliver speedy justice on corporate matters. In exactly the same way, perhaps it is a good idea to have specialist judges in the Supreme Court whose job would be to clear cases pertaining to appellate/regulatory bodies like Trai/TDSAT and CERC/Ate. And the Trai/TDSAT law also needs to be clarified further to end the turf war between the two bodies.