1. Column: Towering telecom goals

Column: Towering telecom goals

It is time to consider transferring spectrum auctions and licensing to the regulator

By: | Published: September 22, 2015 12:31 AM

Over the next five years, what public policy goals are sought to be achieved? Broadly, these are “reliable, affordable converged services”, universal access and connectivity, delivery of broadband, and using mobile technology as an instrument for transformation and empowerment. So, what is the agenda for action?

Spectrum

There must be a comprehensive audit of all spectrum use held by government agencies, including the ministry of defence (MoD). An army of competent (and underemployed) engineers is available with the Department of Telecommunications (DoT) to be deployed for the purpose. A separate team will have to be set up for the MoD. The exercise should be finished in six months, following which there should be resumption of spectrum (which was given scot-free); if agencies wish to continue holding the spectrum, they must pay market-related prices. On backhaul spectrum, releasing existing spectrum quickly, rationalising charges, and opening up the E and V bands are needed.

Then there is a need to identify new bands for access spectrum and plan their release. Simultaneously, we have to move towards releasing unlicensed spectrum to reduce the traffic load on commercial spectrum.

Infrastructure
* Resolving Right of Way (RoW) issues on a pan-India basis is needed; it was done for the National Optic Fibre Network (NOFN) and can be extended to other projects.
* We also have to permit the use of public buildings for roof-top towers.
* On broadband, the two main focus areas should be the completion of the NOFN and simultaneous prioritised development of software applications to deliver e-governance services.

Regulatory regime

The next generation networks (NGN) will be IP based, and are around the corner. Converged services and networks are inevitable. Rapid technological advances necessitate much greater flexibility in the conduct of regulation. There has to be a paradigm shift to lighter touch regulation. The division of regulatory responsibilities between the DoT and the Telecom Regulatory Authority of India (Trai) needs to be demarcated afresh. It is time to consider transferring spectrum auctions and licensing to the regulator. The government, as a sovereign, should retain the powers to allocate spectrum for commercial and non-commercial uses. A new regulatory regime will require legislation. Experience can be drawn from countries such as the US, the UK and, closer to home, Malaysia. This will be a three-year project; but work must start now.

Industrial structure, charges and fees

The investment needed to realise public policy goals is huge. The paradigm shift of the early 1990s, to bring in the private sector, was conditioned by the consideration that public resources were simply not available. That situation has not changed, so we should persevere with the paradigm. Large dollops of both foreign and domestic investment are required and both are contingent on the economic health of the industry. The following action points seem obvious: There is a wide dispersion of rates for the levy of the Spectrum Usage Charge (SUC). We should transition to 1% over three years (2016-19). Similarly, the LF regime should transition to a flat 5% (or lower) charge over 2016-19. And there must be a suitable redefinition of Adjusted Gross Revenue (AGR). Realistic M&A guidelines have to be immediately issued. This will call for a review of the 25/50 rule. After a year’s experience with trading, we must consider spectrum leasing. Finally, a very quick decision on the Virtual Network Operator (VNO) regime will help the industry (all segments, not merely telecommunication industry players) and the broadband effort.

Institutional structure

It is imperative to have faster decision-making and predictability and transparency in governance. If the government is so concerned about making processes more business-friendly, why not in telecom?
* Abolish the Telecom Commission: It is a dysfunctional organisation.
* Restructure the DoT: It should function like any other department with responsibility and accountability for decision-making. This may entail a rejig of personnel/posts to ensure coordination at the sub-top-level management.
* Re-engineer internal decision-making: Dismantle the current committee systems. Officers must be held to account for decision-making.
* Urgent reform of the Universal Service Obligation Fund (USOF) is imperative: Since public money is involved, the government may wish to retain the authority to determine policy on how funds are to be spent. However, once policy is set, decision-making should be delegated to the USOF, which should function independent of the DoT in this regard.
* The Wireless Planning & Coordination Wing (WPC) needs wholesale overhaul: Once it is decided that spectrum is to be released for commercial use, the case for managing such spectrum within the DoT is non-existent. These functions (and WPC staff) should be transferred to Trai. The overall management of spectrum, a sovereign function, must be retained with the government.

The author is former chairman, the Telecom Regulatory Authority of India

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