In this article, Shruti Kulshreshtha, from Symbiosis Law School, Hyderabad has explained about the Telecom Regulatory Authority of India Act, 1997.
The telecommunications sector has played a significant role in the transformation and expansion of mobile communications as well as the information society as it stands today. Given the huge barrier to entry in this industry, its regulation becomes pivotal to circumvent the possibility of any monopoly and to ensure the absence of any unfair or discriminatory practices within the industry. For this purpose, Telecom Regulatory Authority of India (hereinafter referred to as “TRAI”) a statutory regulator of the telecommunications sector in India was set up under Section 3 of the Telecom Regulatory Authority of India Act, 1997 (Hereinafter referred to as “The Act”). The paramount objective of the Act is to institute TRAI and Telecom Dispute Settlement Appellate Tribunal (TDSAT). The Act also seeks to regulate the operation in the telecom industry, settle disputes and preserve the interest of the people.
Constitution of TRAI
The TRAI is incorporated as a body corporate having perpetual succession and a common seal, having the power to hold & dispose of property, enter into contracts and the capacity to sue or be sued. In pursuance to Section 3(2) of the Act, TRAI consists of a Chairperson, not more than 2 whole-time members and not more than 2-time members. All these members are appointed by the Central Government and the term of office is either 3 years or till they attain the age of 65 years, whichever is earlier. The Central government can also appoint a Vice-Chairperson if required. The authority is Headquartered in New Delhi. Section 4 of the Act states that the chairperson and other members who qualify to occupy this post shall have special knowledge and professional experience in telecommunications, industry, finance, law, accounting, the management of consumer affairs. A government servant cannot hold such a position unless the person has served the government as a Secretary or Additional Secretary for a period of exceeding three years.
The Chairperson or any other member of Trai shall not possess any financial or other interest which might impact his decisions and functions. The salaries, allowances and conditions of services shall be prescribed from time to time. The Chairperson and other members can be removed from office or can resign from office upon a written notice to be given to the Central Government three months prior to such resignation. However, such a person will become ineligible to be employed by the government, Centre or State, and also cannot be commercially employed for a period of 1 year.
Section 8 of the Act deals with meetings in TRAI. All the decisions in the meeting are taken by way of a voting system, where the majority of the votes of members who are present and voting are considered. In the case where the number of votes is equal, the Chairperson or the person presiding the meeting has a second vote.
TRAI also appoints employees so as to carry out the functions as prescribed by the Act. Presently, the Authority consists of 9 divisions:
- Mobile network division;
- Fixed network division;
- Converged network division;
- Quality of service division;
- Broadcast and cable services division;
- Economic division;
- Financial analysis and internal finance and accounts division;
- Legal division and
- Administration and personnel division.
According to the Organizational structure available on the official website of TRAI, Dr R.S.Sharma is the current Chairman of TRAI, having 1 full-time member and 2 part-time members.
Government control over TRAI
Although TRAI was established to regulate telecom services, which were earlier under the supervision of the Central Government, still the government exercises certain control in limited areas of TRAI’s functioning. The chairperson and other members of the authority are appointed by the Central government and when the members wish to relinquish, the written notice is to be given to the Central Government itself. The Central Government also has the power to remove any member, if the conditions listed under Section 7 of the Act are met.
The Telecom Dispute Settlement Appellate Tribunal (TDSAT) is established by the Central Government and the composition of the Appellate Tribunal is made by the Central Government after the consultation of the Chief Justice of India. The TRAI is funded by the government. Under Section 21 of the Act, the Government is empowered to make such grants to TRAI that are necessary to pay salaries and meet the administrative expenses. The accounts and audit reports of the authority are required to be forwarded to the Central Government annually, for laying before both houses of the Parliament. Section 24 requires the Authority to prepare a report of all the activities carried out in the previous year and to be forwarded to the Central Government.
The Central Government derives the majority of its powers of control over TRAI from Section 25 of the Act which deals with the Power of the Central Government to issue directions. The Authority is bound to follow the directions or orders issued by the Central Government for the purpose of security of the State, maintaining foreign relations, public order, integrity and morality. This section ensures finality of the decision taken by the Central Government. Another significant provision by which the government exercises control over the authority is Section 35, through which the Central Government can make rules for the smooth functioning of the authority and for the implementation of this Act. It also has the power to remove difficulties that arise in the execution of the provisions of this Act.
The salient feature of the TRAI Act, 1997 are as follows:
- The objective of this Act is to regulate the telecommunication sector and to consolidate all laws, rules and regulation of the telecom industry.
- The Act has established the Telecom Regulatory Authority of India (TRAI) for regulating and supervising the telecom industry and the Telecom Dispute Settlement Appellate Tribunal (TDSAT) to adjudicate disputes between a licensor and licensee.
- The TRAI Act contains 6 chapters. Chapter 1 states the applicability of the Act, key concepts and definitions. Chapter 2 constitutes the TRAI. Chapter 3 contains the powers and functions of the TRAI. Chapter 4 establishes the appellate tribunal, TDSAT lays down the procedure of the appellate tribunal. Chapter 5 includes the provisions relating to finance, accounts and audit of the two institutions established under the Act. Chapter 6 deals with the miscellaneous provisions for the purpose of the smooth functioning of the two institutions created under the Act.
- The Act establishes TRAI as a corporation consisting of a Chairperson, Vice-chairperson, two whole-time members and two other members.
- The Act provides powers and functions to TRAI so as to facilitate its major function of regulation. Some of the primary functions of TRAI include establishing standards of Quality of Service, conducting periodical surveys, setting up terms and conditions of grant of a license, fixing the tariffs and rates to be charged etc.
- The Central Government funds the TRAI and thereby has certain powers which are discussed in the Act.
- The Act lays down the grounds and procedure of Appeal to be followed in the event of a dispute between parties. As per the Act, the Central Government, State Government, local authority and any other aggrieved person can approach the TDSAT for adjudication of the matter.
- The Act provides the qualifications, term of office, powers and rules for termination of the members of TRAI as well as the Tribunal.
Functions of TRAI
Section 11 of the Act gives the functions performed by TRAI. This Section overrides the Indian Telegraph Act, 1885. The Act was amended in 2000 and the Amendment Act of 2000 gave 4 broad categories on the functions of TRAI:
- Recommendatory functions
- Regulatory functions
- Fixing tariffs for telecom services
- Any other function prescribed by the Central Government
These functions are elaborated below.
Recommendatory Functions of TRAI
The Authority has to make recommendations to the licensor either suo moto or upon an application of request. The matters on which recommendations are made are:
- Need for the introduction of a new service provider and its timing. Here, TRAI analyses the existing situation of the service in a particular region.
- Terms and Conditions of issuance of a license to a service provider. TRAI furnishes the conditions on which license should be granted to a service provider under Section 4 of the Telegraph Act 1885.
- Revocation of license due to non-compliance of terms and conditions recommended by TRAI. Revocation of a license is a measure of last resort and hence, this function is important for TRAI.
- Steps to be taken to promote healthy competition, efficiency in service and enable the growth of the industry. The motive behind this function of TRAI is to empower the authority to supervise the industry thereby facilitating economic growth and development.
- Technological advancements in providing services. The quality of services enhances with the improvement in the technological aspect of providing services. Moreover, this regulation will aid in keeping the commercial developments in legal bounds.
- Type of equipment used and their inspection. The purpose of this function is to ensure better services by the service providers by making them undergo inspection of the equipment used.
- Measures of the development of technology and matters related to the telecom industry in general. Encouraging research and innovation in the industry is crucial.
- Effective management of the available spectrum. The term ‘spectrum’ is not defined anywhere in the Act or the Telegraph Act. In general, it means the electromagnetic spectrum in available frequencies.
Regulatory Functions of TRAI
Regulatory functions performed by TRAI are as follows:
- Ensure compliance of the terms and conditions mentioned in the license. Compliance can be ensured either by the issue of directions or by recommendation of termination of the license on the ground of non-compliance of terms and conditions.
- Fix the terms and conditions of the interconnectivity of service providers.
- Ensure technical harmony and effectiveness in interconnectivity between service providers.
- Direct courses of action among organizations for sharing their income received from providing services.
- Set out the standards of quality of service and conduct surveys periodically to protect the public interest and ensure better service.
- Prescribe the time period for proving local/ long-distance circuits of telecom.
- Maintain a register containing all the interconnection agreements. Any member of the public is free to inspect this register upon payment of the prescribed fee.
- Ensure compliance of universal service obligation. It is not defined under the Act, however, has a mention in the National Telecom Policy, 1999. Universal service obligation refers to making the economic and social opportunities of the telecom sector available to the public at large.
Other functions of TRAI
Under Section 11(1)(c) of the Act, TRAI is responsible for levying fees and other charges as per the rates determined in the regulations. Sub-clause is a residuary clause which states that the administrative and financial functions prescribed by the Central Government are to be performed by the Authority for the effective implementation of this Act. In case the Central Government feels that the recommendation given by the authority requires modification, then such recommendation can be sent back for reconsideration within a period of 15 days. Under Section 12 of the Act, TRAI has the power to call for documents for the purpose of investigation and inspection. The Authority is obligated to carry out all these functions while keeping in mind transparency of the exercise of its power. Section 13 empowers the Authority to issue directions for carrying out its functions. The Central Government has the authority to prescribe such other functions that are necessary.
Despite the clearly defined rules and powers prescribed under the Act, TRAI has found the task of regulation a bit difficult. There have been instances in the past where TRAI has landed itself in controversies. Let’s have a look at the significant ones.
The Jio Controversy
It is alleged that TRAI has twisted its rules in order to accommodate the needs of Jio, the subsidiary of Reliance Industries Limited. Competitors claim that TRAI has played a significant role in making Jio a market leader of the telecom industry in such a short span of time. Jio was permitted by TRAI to “test” its services for a much longer period and upon a much bigger subscriber base than prescribed as a general industry norm. This was also opposed by the Cellular Operators Association of India. TRAI is accused of bending its definition of ‘significant market power’ to exclude Jio from its ambit, which saved Jio from the strict scrutiny and severe regulations supposed to be imposed by TRAI. People believe that the governmental influence on TRAI is the reason behind making Jio the biggest market player of the industry.
Predatory Pricing Controversy
Companies such as Bharti Airtel and Vodafone among many others allege that TRAI’s regulations on predatory pricing influence and favour only one company – Reliance Jio. Although TRAI is constantly trying to circumvent this issue and to resolve it, the changes brought about by TRAI and the clarificatory comments given by the officials are not very satisfying to the analysts.
Data Protection Controversy
TRAI released recommendations on Privacy, Security and Ownership of Data in the Telecom Sector, applicable on apps, browsers, operating systems and handset makers. TRAI states that necessary steps need to be taken with respect to privacy and this can be done by TRAI since all data passes through the telecoms and devices. However, these recommendations were alleged to be insufficient with regards to data privacy and protection. In order to prove the effectiveness of this claim, TRAI chairman R.S. Sharma made his Aadhar number public on social media as a dare to the hackers. He said that with the current regulations invading the privacy of anyone is not possible. This move was criticised by many people including the UIDAI, who gave instructions to the citizens not to share their aadhaar numbers with others.
Due to this stunt of the TRAI Chairman, the Central Government extended his tenure by two years, a day before his previous tenure was ending.
The TRAI Act, 1997 has yielded numerous benefits to the telecommunications industry due to its policies and regulations. The operational costs and other expenditures which were borne by operators earlier have been drastically reduced, which ultimately has brought economic growth and development in the country. The Act has allowed a public stakeholder organisation to include other associations like private companies, policy organisations, academicians etc to be a part of the decision making the process of the government, making an inclusive society. The recommendations, consultations and regulations given by the Act have helped in the transformation of the telecom industry.
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