Media reports say the department of telecom has prepared a draft cabinet note, proposing major amendments to the Telecom Regulatory Authority Act 1997, to empower the Trai. The opportunity should be used to review Trai’s functioning since 1997, when it was first set up, and restructure it on the lines of some of the globally famous regulators like the US FCC.

The draft bill proposes to empower Trai to impose penalties on telcos to enforce its regulations. Another proposed change in the Act is to raise the tenure of Trai chairperson to five years from three, in line with other regulators such as the Competition Commission of India, Irda and the Airport Economic Regulatory Authority.

When Trai was setup in 1997, it had a chairman and six members of five years’ tenure. In the original Act, the Trai was empowered to regulate the sector and adjudicate in disputes between service providers and between a service provider and government. The first chairperson was a retired Chief Justice of the Allahabad High Court. The government of the day in 1999 felt uncomfortable with some bold decisions taken by the Trai and the first Trai was disbanded prematurely in December 1999.

A restructured Trai was created in 2000. The judicial powers relating to adjudication was transferred to a new body called TDSAT. The restructured Trai has a chairperson and two full-time members and two part-time members. The chairperson has a tenure of three years or up to the age of 65, whichever is earlier. Similarly, members are appointed for three years or the age of 62. Members/chairpersons? job security was diluted in the amended Act. In the original Act, a judicial enquiry was required to establish charges of unbecoming conduct before sacking a member/chairperson of the Trai. In the amended Act, there is no such stipulation.

The Federal Communication Commission (FCC), set up in 1934 and often taken as a model by governments in developing countries, has five commissioners appointed by the President of the USA and confirmed by the senate. They have a tenure of five years. One commissioner is designated as chairperson by the President. He is first among the equals. FCC commissioners, including the chairperson, are generally much younger than Trai chairpersons and members, who are in their 60s, being retired bureaucrats, rather than young professionals as is the case with the FCC. The latest addition to FCC is commissioner Jessica Rosenworcel, in her 30s. This may be an extreme example of youth getting the better of experience, but it definitely underlines the need for younger professionals to man specialised bodies like Trai, CCI, etc.

Except for the first chairperson of the restructured Trai, who was a banker, all the subsequent chairpersons have been IAS officers, with no specialised domain knowledge of telecommunications, economics, competition or law. They are retired ex-secretaries to the government.

There are instances of ex-secretary- telecom being appointed as Trai chairperson. There is a conflict of interest angle in such appointments, as the Trai is required to give its objective opinions on many issues referred to it by the government, even some referred to it when the chairperson was heading the DoT as secretary. The new Act should try to remedy the situation by providing a younger and professional leadership to the Trai.

There is also a need to restore the job security to Trai member/ chairperson, provided in the original Trai Act of 1997, to make it more independent. In the US, the law provides for impeachment proceedings for removal of an FCC commissioner.

IAS officers generally spend two-thirds of their career in state government departments, working in non-technical departments, and they are transferred frequently from one job to another. They come to the Centre on deputation as joint secretaries for five years. Even in the central government they are not allowed to specialise in any one discipline. Their exposure to high-technology areas like telecom or IT is minimal. They are general administrators, not professionals, and should not head regulatory bodies like Trai, CCI or Sebi, which require specialised knowledge. So, the proposal to prescribe higher professional qualifications for Trai chairperson and members is welcome.

The draft proposes 25 years? professional experience for a chairperson and 20 years for a full-time member, in relevant fields. Only professionals are nominated by the US President to the FCC. The same is true of other globally famous regulators such as Ofcom of the UK and CRTC of Canada. These regulatory agencies have professionals in their 30s and 40s in leadership positions. There is a good case to reduce the age limit to 60 years for Trai chairperson and members, and treat the former as a first among equals. If the age is capped at 60, regulatory bodies will not become a parking slot for retired officers.

Another proposal in the draft Cabinet note is to empower the Trai to audit spectrum utilisation by service providers and recommend punitive action for sub-optimal utilisation. Assessing optimal utilisation is an extremely complex task, as it involves a large number of variables. Neither the Trai nor the Wireless Planning Wing of the ministry of communications is equipped to discharge this function. Only equipment suppliers who engineer the network with computer-based optimisation tools of a proprietary nature perform this function at present. For the 2G systems, about a dozen proprietary tools are available. These tools are not available in the market for third-party use. International Telecommunication Union (ITU), a specialised body of the UN, is yet to develop such tools for mobile networks, although for the fixed network one such tool was developed in the 1980s. For 3G/4G systems, the availability of such tools even with the equipment supplier is doubtful. Since these networks will carry multimedia traffic, which unlike voice is highly bursty, the task is even more complex. In view of the complexity of the task and non-availability of non-proprietary tools in the market, no regulator in the world is doing this operational task.

Ofcom, the British telecom regulator, one function of which is to ensure efficient utilisation of frequency spectrum, has determined after a lengthy study and public consultation in 2005 that if the auction method is used and the operators participate in a competitive bidding process and pay the market-determined price, economics will force them to ensure efficient and optimal spectrum utilisation. World famous regulators such as FCC, Ofcom, CRTC and ACC (of Australia) rely on competition to ensure efficient utilisation of natural resources. If the Trai attempts this operational task, it will be like opening a Pandora?s Box, as the operators will contest its figures and will even move the court. So, this proposal needs to be reviewed through a dialogue with more experienced global regulators, particularly with Ofcom. Since NTP 2012 has delinked spectrum from licence and the spectrum will be auctioned, there is no economic justification for any audit as proposed in the Act. Only if spectrum is given free, auditing may be justified.

Also, the proposed latest edition of the Trai should be empowered by legislation to regulate any anti-competitive conduct in the telecommunications market. Although the Trai Act, 1997, requires the regulator to promote competition in the telecom market, it has no legislative power to investigate possible anti-competitive conduct by operators. The Competition Commission of India does not have the technical expertise to discharge this function. In the UK, this function is concurrently discharged by Ofcom with the competition authorities. This is important as convergence between telecommunications, IT and broadcasting will make the converged operator quite powerful and will give it the ability to dominate one market by cross-subsidising from the other. The empowered Trai must discharge this function.

The author is former member, Trai/Telecom Commission