Sought powers not to jail telcos execs, but to empower Trai: Sharma

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New Delhi | Published: June 18, 2016 6:37:01 AM

Telecom Regulatory Authority of India chairman RS Sharma on Friday clarified that he has not sought penal powers from the government for himself to jail executives...

Trai recently seeking powers to levy penalties on the operators with the express clause that if its directions are not obeyed the executives of the erring companies can be jailed. (Reuters)Trai recently seeking powers to levy penalties on the operators with the express clause that if its directions are not obeyed the executives of the erring companies can be jailed. (Reuters)

Telecom Regulatory Authority of India chairman RS Sharma on Friday clarified that he has not sought penal powers from the government for himself to jail executives of telecom firms but only to strengthen the position of regulator so that its regulations can be better enforced, reports R Jai Krishna in New Delhi.

In an interview with FE, Sharma said that if there is any violation of the directions of the regulator, it will be the courts which will finally decide whether the offender is penalised or sent to prison or both and he has no intention of acting as the judge, jury and executioner. He said that such powers are vested with other regulators like the Reserve Bank of India, the Competition Commission of India and the Central Electricity Regulatory Commission.

“Trai is not seeking powers to punish for itself,” Sharma said, adding, “Consumer interest is as much the mandate of Trai.

He added: “We think it is non-negotiable. We are not putting any constraints, we are for healthy growth of the industry.”

Clarifying the proposals for vesting penal powers in Trai, Sharma said the proposal was to seek amendments, including powers to impose financial penalties and jail term for executives if they violate its directions/orders, as a measure to enforce its regulations. If such a scenario arises, the regulator will have to file a complaint in a magistrate’s court, who will adjudicate the dispute, leading to financial penalties or imprisonment for executives found guilty.

Trai recently seeking powers to levy penalties on the operators with the express clause that if its directions are not obeyed the executives of the erring companies can be jailed had led to concern being voiced by the industry, which felt it was too draconian.

Trai had moved a note to the department of telecommunications recently seeking penal powers after the Supreme Court had quashed its regulation mandating operators to pay monetary compensation to consumers for call drops.

Though the SC had not quashed the call drop regulation questioning its power but the process through which it arrived at the decision that it termed as arbitrary and non-transparent and in violation of principles of natural justice, Trai wants the power to levy penalties as it feels it will give it more teeth in terms of dealing with mobile operators.

It is not that in the past Trai did not collect fines from the operators for not meeting quality of service parameters but it was never termed as a penalty but called a financial disincentive. Further, the operators paid up the fines because Trai has powers to charge them in a civil or criminal court for disobeying its directions.

Any amendment to the Trai Act would require parliamentary approval. However, according to analysts, if done now it risks opening a Pandora’s box since all past fines would become illegal.

According to Trai, compliance by companies is higher when the regulator has a enforcement method including the power to impose penalties. According to Trai, telecom regulators worldwide such as the Federal Communications Commission of the US; Office of Communications, or Ofcom, the UK; and the Canadian Radio-Television and Telecommunications Commission have power to impose penalties, and send executives to jail if they are found guilty of not complying with their orders.

In India, too, other regulators have been vested with penal powers in their basic establishment act, which includes provision for imprisonment for executives if they provide false information or do not comply with its orders. For instance, the Reserve Bank of India Act, 1934, specifies financial penalties ranging from few thousand rupees to a few lakh rupees and may include a jail term ranging between six months and five years, depending on the nature of violation within the banking sector rules. The Electricity Act of 2003 specifies three months’ imprisonment with or without a financial penalty of up to Rs 1 lakh if a company does not comply with its orders/directions. The Competition Commission of India Act specifies that in case an executive is found contravening its orders, the person could face a penalty of Rs 25 crore, which may or may not include imprisonment for not more than three years, and would be decided by the chief metropolitan magistrate, Delhi.

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