Column: Undermining a good regulatory system

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Published: January 30, 2016 12:21:24 AM

Trai is being subverted by a tactic of pressurising adopted by some telecom stakeholders

Globally, as a best practice, complex sectors are regulated by independent specialist regulators. One key reason (arguably, the key reason) for India’s past economic under-performance has been India’s inability to build such institutions, in sectors from real estate to power to transport et al.

Two conspicuous exceptions have been the regulators for the financial and the telecom sectors. Both have been the envy of other nations for the past several years. India’s unique regulatory framework, comprising a specialist regulator (Trai) and a specialist tribunal (TDSAT), constitute the chief reason why telecom is the only infrastructure sector where India has not fared badly. True, these institutions have had their embarrassing moments, but in the Indian landscape, telecom stood clearly apart from other infrastructure sectors.A series of forward-looking policies and enabling regulations emerged—after the 1999 world-class telecom policy announcement—in quick succession, primarily due to continuing engagement and vibrant dialogue and reasoned discussions between industry, regulator and government. Of course, there were some over-heated arguments and friction between the different groups of stakeholders but never was the discipline of a structured, serious and responsible policy-cum-regulatory engagement forsaken or undermined. Hence, the Indian telecom juggernaut rolled forward, from being a laggard to being at the pole position today for growth and potential.

However, the picture is changing rapidly. Our core strength, the unique regulatory framework, is being steadily subverted by some of the stakeholders. Regrettably, these constituents have strange ideas of what Trai should be doing. Increasingly, over the past one year or so, we are noticing that, while a comprehensive regulatory or policy consultation is in progress and many participants are attempting to contribute in a professional manner, others seem to have adopted the tactic of pressurising without cooperating in the stipulated, constitutional manner. Illustratively, the regulator or government is inundated with a flood of orchestrated template responses, emails and petitions. One section starts this and the others, unfortunately, start emulating through a reactionary deluge. The regulator’s website and system understandably breakdown or crash under such onslaught. How would the unfortunate regulatory officer/analyst be able to sift the real, meaningful inputs from the chaff? Thus, the initiator of the flood has successfully derailed the regulatory engine.

There are some interesting spin-offs also of the ‘subversive’ action. One innovation is to put up comedians to stage half-amusing, half-offensive skits regarding the ongoing serious regulatory consultation. One might welcome this free entertainment for the public. One might also argue that this lends a lively, light-hearted air to a heavy discussion. However, serious participants rightly condemn such comic interludes of questionable taste as being disrespectful of the regulator and bemoan that the constitutional process is being demeaned and degraded.
Another controversial initiative has been the bombardment of the general public with overwhelming full page advertisements in several newspapers over many days with a mass of information to ‘educate’ the public on the virtues of a product or service. Nothing maybe wrong in that if done in normal times, but again, if executed in a supercharged atmosphere, when a critical regulatory consultation is in progress, this does raise concerns and doubts. Why such big money-play when product itself ‘basically’ good?

Each of the above types of intervention are obviously pre-meditated efforts and involve significant financial inputs. Clearly, not at all a healthy sign, when the intentions are quite obviously to influence the regulatory outcome—not by provision of comprehensive answers, well-researched inputs and reasoned arguments to the questions posed by the Regulator but by deplorable pressure tactics. Very rightly, the regulator has roundly chastised the concerned stakeholders and cautioned that any articulation of inputs which are not made in the stipulated structured manner cannot be taken into their reckoning and analysis. This is not an idle warning; there is simply no way that all the e-mail noise or stand-up comedians or ads can be scientifically analysed by the expert techno-economic agency.

The Trai is no Election Commission—it is supposed to facilitate intellectual debate and listen to facts and reason, not conduct a polling exercise or oversee an election process. Sadly, however, all the counselling seems to have fallen on deaf ears. In fact, matters have now deteriorated to the extent that even the office of the prime minister is being flooded with hundreds of petitions/signatures, seeking his intervention to pre-empt the empowered regulatory authority and announce a decision in favour of the petitioners. In the unlikely event that this happens, then, the fears of one industry observer may come true: “We may soon have to witness the sorry spectacle of the Governor of the Reserve Bank of India being compelled to decide the country’s financial policy not by the excellent principles of economics but by counting the millions of mails that his office is bombarded with.”

Alas! The regulatory ark has been captured by the Philistines and Ichabod. The glory of the Indian regulatory system is surely being diminished.

The author is honorary fellow of the Institution of Engineering & Technology (London) and president of the Broadband Forum of India. Views are personal

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