The October 3 decision of the Telecom Commission (Commission, hereafter) to seek a review of last month’s recommendations of the Telecom Regulatory Authority of India (Trai) raises important concerns. The nature and working of the Commission poses questions about its relevance and authority to scrutinise regulatory decisions.
Trai’s recent recommendations relate to spectrum, a vital and scarce resource for wireless communications, and the mainstay for voice and data services in the telecom sector accounting for over 90% of sector’s users, revenues and levies to the government. Failure of two successive auctions has exacerbated scarcity, deprived operators of its use and government of its share of revenue and left it unable to comply with the Supreme Court’s order to auction all spectrum vacated by the122 mobile licences that it cancelled in February 2012. The Commission wants the regulatory body to provide new reserve prices for 900 MHz and 800 MHz and review its recommendation on spectrum trading and flat spectrum usage charges (SUCs) for any wireless service.
The Commission’s proposals, irrespective of their merit or relevance, raise questions about the role of the body itself. It was set up in 1989 as a part of efforts to reform a seriously under-performing department of communications which at that time played the combined roles of policymaker, regulator, operator and service provider. There was less than one phone line per person and virtually no connectivity in rural areas, thanks to very high costs (over $1,000 per line) and systemic inefficiencies. Unusual for the time and perhaps because the then Prime Minister Rajiv Gandhi, through his advisor Sam Pitroda, prioritised this, the Telecom Commission was set up as a high-powered decision-making body to prevent delays due to cumbersome coordination between ministries. So, while senior technical and financial staff of the DoT are its executive members, secretaries of relevant (to telecom policy) departments including information technology, finance and the planning commission were also made members.
It is easy to see that following the separation of telecom operations under government-owned Bharat Sanchar Nigam Ltd (BSNL), its original mandate has largely disappeared. Indeed, a former senior functionary of both Trai and the Commission believes that participation of other ministries in the latter compromises all of them.
The Trai Act, 1997, identifies areas where Trai can act autonomously (e.g. tariffs) and subjects where its role is recommendatory (e.g. licensing and spectrum). The legal body to receive the recommendations is the the