Trai to assume powers to fine telcos for breaches

Written by Rishi Raj | New Delhi | Updated: Sep 3 2012, 07:48am hrs
Rahul KhullarRahul Khullar, Trai Chairman
The Telecom Regulatory Authority of India (Trai) is all set to arm itself with the powers to levy penalties on mobile operators for contravening any of its directions. A set of regulations is expected within the next few days that would define the quantum of fines operators would have to pay in case of a breach in the quality of service standards, delays in filing tariff plans with the regulator and statutory filing of information like subscriber data and financial performance.

What is significant is the manner in which the regulator has decided to empower itself in this regard because the Trai Act does not allow it to levy penalties for contravening its directions. Though the regulator has been seeking such powers by getting the government to amend the Act, the latter has so far not obliged.

Currently, the Trai Act only empowers the regulator to prosecute the erring companies in the court of metropolitan magistrates. However, regulators like the Securities and Exchange Board of India and the Competition Commission of India have powers to levy penalties.

Sources said that the Trai has now interpreted Section 29 of the Act in a manner that it can levy penalties on operators if they fail to follow its directions. Thus, it has decided to amend the various tariff orders to insert penalty provisions. Two such draft orders have already been issued one dealing with delays in filing tariff plans and the other on quality of service and would soon be converted into regulations. More such regulations are in the offing.

Section 29 of the Trai Act empowers the regulator to enforce its directions. We have gone through certain rulings of the Delhi High Court, which state that the regulator has the powers to enforce its writ. This means we can do whatever we want to ensure that our directions are not disobeyed by the operators and thus we can amend various tariff orders ourselves to levy fines and penalties, a Trai official told FE.

The last time Trai tried to levy penalties on operators was in early 2006 when it had issued show-cause notices to several top mobile operators on poor quality of services parameters. However, the move fizzled out with the operators challenging such powers in the Telecom Disputes Settlement and Appellate Tribunal. Subsequently, two Trai chairmen wrote to the government to amend the Act to empower it with such rights, but the government rejected such demands.

However, this time the regulator has taken no chances and is well prepared to deal with the operators in case they plan to challenge its move. We have powers to prosecute operators in the metropolitan court if our orders are not followed, the official said.

If the operators think that we have overstepped our limits by imposing fines then we would prosecute the promoters for any violation by the companies and then they should not complain about any harassment and be prepared to personally keep on appearing in the courts, the official said.

The strategy seems to have worked because sources said that the industry has agreed to the penalty provision and does not plan to challenge it.

Trai sources said that the decision to levy fines and penalties was a must because there were delays by the operators in filing statutory information with it. Further, almost all operators violate the quality of service benchmarks. We needed to make it clear that if you fail, you need to pay a fine. If the regulator is not able to enforce its writ then respect for regulatory provisions whittle and regulations have no meaning, the official said.