In May, the Supreme Court, in a strongly worded order, struck down a Trai regulation that required telcos to compensate consumers for call drops by R1 per dropped call. While acknowledging the scale of the problem posed by call drops—faced by 900 million consumers across the country—the apex court found that the approach Trai has taken in regulating call drops lacked transparency and was “…manifestly arbitrary and unreasonable.”
Justice Rohinton Nariman observed the regulation was “…framed without intelligent care and deliberation…” This, unfortunately, puts the consumers in the same place as two years ago, leaving them at the mercy of telcos.
The 99-page order cites several instances of the lack of “intelligent care and deliberation” by Trai in formulating the call drops regulation. The Supreme Court, in one section, for instance, scrutinises the compensation mechanism adopted by the regulator and points out how Trai eventually contradicts itself in a technical paper published right after the call drops regulation was issued—acknowledging that 36.9% call drops are due to the consumer—while at the same time implementing the compensatory mechanism placing 100% liability on telcos. This data, put out by the regulator itself, was surprising to many, and was equivalent to Trai shooting itself in the foot in its efforts to regulate the vexed issue of poor network quality and call drops. As Justice Nariman rightly acknowledged, this is a classic case of “…one hand of Trai does not seem to know what the other hand is doing…”
The call drops regulation of October 2015 came on the back of a strident campaign by consumer groups. Trai was responding on behalf of the consumers for the first time in years, and so, was welcomed by all. But the holes in the regulation and Trai’s own data showed that the regulator’s belated wakeup, to the cause of the consumer, was a case of its performance flattering to deceive.
The telecom sector is India’s best example of private sector investment in infrastructure. In the last two decades, it has transformed connectivity for a billion Indians. In addition, the sector contributes significant revenues to the exchequer in terms of revenue share and spectrum auction receipts. Trai has played an important role in the development of the sector thus far.
However, in one very important area, Trai has failed—that of ensuring consumers’ right to quality service by telcos.
All these years, Trai has either been silent on call quality and slow internet speeds or, as in the recent case, on an attempted call drops regulation; essentially, it has been unsuccessful in ensuring consumers are protected. It is worthwhile to note that the Trai Act prescribes, in its objectives, “Protection of Consumer Interest” as one of the mandates of Trai and further describes, under Section 11(b)(5), “laying down and ensuring quality of service.” So, the inability or unwillingness of the telecom regulator to enforce this needs examining.
Consumers are clearly unhappy with call quality (aka call drops) and slow internet speeds, as a recently launched petition on Change.org titled #NoSlowInternet reflects. For close to a decade now—after making the move from a telecom entrepreneur to a Member of Parliament—I have been urging (fighting!) in Parliament for an overarching framework for consumer rights in the technology and digital landscape. I have argued that what India needs is a Magna Carta for Digital Consumer Rights, i.e. a basket of consumer rights that include net neutrality, privacy, strong quality of service norms, and free and fair competition on the internet. The key to ensuring this, apart from legislations, is a strong, capable and accountable regulator.
For the past many years that I have been raising this, ministers and regulators lacked the interest or the will to do anything to protect the consumer. But both telecom minister Ravi Shankar Prasad and Trai chairman RS Sharma have demonstrated that they desire to even the scale for the consumer, and move regulation and policy-making closer to consumers and away from the skewed telco-controlled approach that was the norm for several years. This balance is critical for the success of the sector as a whole.
While for the most part Trai has been negligent, it is obvious from the recent failed attempt of Trai’s call drops regulation that it also suffers from lack of adequate powers to enact regulations that enforce quality of service, except for termination of licences. The Supreme Court order also raises a broader issue about who is monitoring Trai and holding it accountable for the quality of its work. Clearly, there is a need for more accountability of Trai, which currently appears to be unaccountable for its performance and conduct to anybody. Trai must be made accountable to Parliament, and that would require the Act to be further amended.
Trai’s performance on critical issues like net neutrality exposes its weaknesses in its capability and capacity to rapidly deal with complex technology regulation challenges. For instance, 18 months after it was first raised, Trai continues to struggle with its consultation and regulatory process on net neutrality. The telecom regulator requires staff that is highly capable in regulatory, legal and economics, but instead it has to rely, due to its budgetary and other limitations, on a cadre of dedicated but ill-equipped staff from the Department of Telecommunications (DoT) and other government agencies. Faced as they are with big corporates who employ the best and pay the highest, it’s no surprise, then, that Trai finds itself in difficulties.
The Trai Act was last amended materially in 2000—more than a lifetime in the rapidly evolving technology space.
The technology and telecom landscape has transformed dramatically in this last decade and a half. The amendments to the Act that will help Trai to be a global standards regulator for a fast changing technology sector will involve four distinct sets.
* More powers to regulate and enforce consumer rights to privacy, quality of service and access;
* Accountability to Parliament;
* Enhanced capacity and capability with unfettered access to talent, human resources and enhanced financial budget, perhaps linked to percentage of revenue share;
* Financial independence of Trai from DoT and government of India.
Trai is attempting to regulate one of the most disruptive and rapidly changing sectors with a legislation that was enacted way before the current landscape emerged. There are several new challenges in this sector that were not foreseen at that time. There will be even more changes and unforeseen technology and regulatory challenges in the coming years. That, in itself, is a pressing argument for a complete re-look at the Trai Act, its scope, its powers, accountability and its remit to consumers and investors. It can help the regulator evolve and grow into a global standards independent technology regulator, like the Federal Communications Commission (FCC) of the US and the Office of Communications (Ofcom) of the UK. A global standards regulator and its work has a direct impact on investor confidence, investment flows and consumer rights and protection.
The author is a Member of Parliament & tech entrepreneur