TRAI: Lack of autonomy, punitive powers reduce telecom regulator to a bystander

draft telecom bill
TRAI turned a blind eye to violations by telecom operators and failed to impose quality standards, punish violators, and protect consumers.

Communications minister Ashwini Vaishnaw has allayed concerns over dilution of TRAI’s powers, saying that the government is looking to strengthen the telecom regulator with penal powers. A recent newspaper article had cited a senior government official saying that the government plans to make TRAI a permanent technical body with powers to penalise companies that fail to meet service quality standards on the lines of the Federal Communications Commissions of the US and Ofcom of the UK.

One thing is clear – the telecom regulator needs to evolve to be in sync with the industry which is prone to frequent disruptions caused by technological advances. Also, the government is keen to regulate foreign social media and OTT apps that seek to skirt any attempt to third-party moderation of content.

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The Telecom Bill, 2022 draft sought to transfer some of TRAI’s powers to the department of telecommunications, leading to objections by the regulator. TRAI had objected saying the changes will make it toothless in a vibrant and technology driven market. Vaishnaw’s clarifications came in this context. The government plans to get the bill passed in the monsoon session of Parliament next year as India gears up for the rollout of 5G services.

The draft Telecom Bill 2022

Earlier, the department of telecommunications had issued the draft Indian Telecommunication Bill, 2022. The proposed legislation looked to modernise the country’s telecom industry and rid it of the archaic British-era laws. The Bill was aimed at bringing in sweeping changes in how the telecom sector is governed while giving the Union government more powers in several areas.

Through the Indian Telecommunication Bill, 2022, the government sought to consolidate and amend three separate acts — the Indian Telegraph Act (1885), the Indian Wireless Telegraphy Act (1933) and the Telegraph Wires Act (1950). One of the key changes proposed in the Bill is the inclusion of new-age over-the-top communication services including WhatsApp, Signal and Telegram in the definition of telecommunication services.

The draft faced fierce criticism over concerns regarding the right to privacy of citizens. Meanwhile, the government also found an unusual dissident in TRAI which claimed that the Bill will make the regulator toothless. Currently, the TRAI Act mandates the telecom department to seek the regulator’s views before issuing new licences to service providers. However, the proposed Bill removed this provision. The Bill also made it obsolete for TRAI to request the government to furnish information or documents necessary to make recommendations.

It was not just TRAI which criticised the draft telecom Bill. The Bill was also called out for lacking safeguards against preventing misuse by the government agencies citing national security provisions. Industry stakeholders called for clarity on the grounds for breaching the right to privacy by the state. There is also an outcry for intervention by courts to set the law in order and to hold security forces accountable in case of misuse of provisions.

The draft bill made it mandatory for OTT communication services, which are essentially Internet-based apps/ software, to obtain telecom licences. This simply meant that these companies were now under the ambit of the laws governing the telecom industry. Industry watcher said the move will stifle innovation or isolate India among world nations. Another provision of the draft Bill mandates reverting of assigned spectrum back to the Union government in case a telecom entity goes defunct or enters insolvency.

Industry stakeholders argue that the government must rather allow companies to sell spectrum in case of need as it is a bought entity and hence must function as an asset. Presently, there is no clarity on whether the spectrum owned by a defaulting operator should go to the creditors or whether the government can claim control over it.

India is the second-largest telecom market in the world and the industry is of paramount importance to the country’s GDP. To make the telecom sector appealing to investors and to promote its growth, the government allowed 100% FDI in the sector and several other measures. These include largely deregulated BPOs and call centres, in-flight Wi-Fi, and deferred payments by telecom operators.

TRAI’s many failures

The government cannot be blamed for looking to reform TRAI that has a track record of failures. It turned a blind eye to violations by telecom operators, and failed to impose quality standards, punish violators, and protect the interest of the consumers.

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One of its most prominent of its failings is its inability to protect consumers who registered with the National Do Not Disturb registry to escape from pesky calls and spam commercial messages. The security failures saw the DND registry becoming a database for spammers. Apart from this, the regulator could not ensure service quality standards for connectivity, call drops, and data speed.

Banking regulator RBI and capital markets regulator SEBI are two examples of independent regulators TRAI can emulate. Without ample punitive powers and a willingness to use coercion, TRAI has become an example of inefficient regulator. One cannot expect any major improvement unless the government showed a willingness to empower it with adequate autonomy. There is hardly any evidence of this willingness in the draft Telecom Bill, 2022.

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