Apart from the fact that the incumbent operators have challenged Trai’s rulings in the past, keep in mind the Supreme Court’s sharp comments against Trai when it tried to impose penalties on telcos for call drops last year.
Expect a battle of words when the telecom regulator, Trai, comes out, either today or later this week, with its regulations on the charges telcos pay one another when a subscriber calls from one network to the other—the Interconnect Usage Charge (IUC). While RJio has said incumbents like Bharti Airtel, Vodafone and Idea have overcharged consumers Rs 1 lakh crore over the last five years on account of a high IUC, it has argued this cost could come down dramatically were the incumbents to have the kind of high-tech network it has. The incumbents, for their part, argue that what matters is that the total costs, including those for spectrum, are taken into account—in response to the RJio claim about its superior technology resulting in lower costs, AV Birla Group chairman KM Birla wrote to Trai last month to say it was not possible to come to any firm conclusions on RJio’s costs since there was no audited account of this. In the past, Airtel has argued that Trai had not taken its full costs into account—the last time the IUC was calculated, Airtel said that while the IUC should have allocated 4.5 paise for its spectrum alone, Trai had attributed just 0.79 paise for this. While Airtel may be right, it also needs to be recognised that incumbents who have the most to gain from a higher IUC will always protest against any reduction in it—the question is of how justified their current protests are.
Normally, in any such cases, since the courts are clogged, the appellate tribunal, TDSAT, offers the fastest resolution. The problem, however, is that Trai doesn’t think TDSAT has any jurisdiction over its orders on IUC. So, along with the matter of jurisdiction, various IUC orders going all the way back to 2006, are stuck in the country’s crowded courts. As this newspaper has argued before, if the sector has to grow rapidly, Trai simply has to allow TDSAT to rule on all its orders/rulings. Such checks and balances are at the heart of any regulatory process and are critical for the telecom industry’s growth. Apart from the fact that the incumbent operators have challenged Trai’s rulings in the past, keep in mind the Supreme Court’s sharp comments against Trai when it tried to impose penalties on telcos for call drops last year. The SC said, “TRAI may follow a transparent process where all facts and figures may be shared prior to making of regulations/ subordinate legislation. This would obviate, in many cases, the need for persons to approach courts to strike down subordinate legislation on the ground of such legislation being manifestly arbitrary or unreasonable”. After calling Trai arbitrary and unreasonable, SC went on to say ‘(Trai) must respond in a reasoned manner to (comments) that raise significant problems, to explain how the agency resolved any significant problems raised by the comments, and to show how that resolution led the agency to the ultimate rule … including a rational connection between the facts it found and the choices it made’. That the country’s highest court should be making such observations about the telecom regulator is unfortunate and is all the more reason why Trai cannot afford to put itself above review—telcos can challenge Trai in various high courts and SC, but this takes so long, justice is almost invariably denied.