SC asks COAI to guarantee payments

The Supreme Court today asked the members of the Cellular Operators Association of India (COAI) to give an undertaking within two weeks guaranteeing the revenue claimed by state-run telecom major Bharat Sanchar Nigam Ltd (BSNL) in case they lose their cross appeals against the ruling of the telecom tribunal.

The Telecom Disputes Settlement and Appellate Tribunal had asked the Telecom Regulatory Authority of India (Trai) to review its policy of reducing interconnection charges. It had restrained BSNL from claiming any port charges from private telecom operators during the period between the Trai notification of February 2, 2007 and May 28 this year, the date of the tribunal’s judgment.

On the other hand, BSNL is seeking to recover the differential amount of port charges for the same period. COAI wants that the restraint order should operate till the new guidelines are framed by Trai.

The Bench presided over by Chief Justice S H Kapadia posted the case for final hearing on September 9 in view of the important legal questions arising in the appeals. One of the crucial issues affecting regulatory authorities and their appellate tribunals in all sectors is whether the regulators can pass rules in the nature of delegated or subordinate delegation.

The power of this nature has been a question frequently raised in the case of regulators, like the electricity regulatory authorities. In the case of electricity commissions, the Supreme Court has clarified the issue. However, in numerous appeals filed by BSNL and private operators, this has been a recurring issue.

The telecom regulator, in its Telecommunication Interconnection (Port Charges) Amendment Regulation on February 2, 2007, had reduced port connectivity charges from 23 per cent to 20 per cent effective April 1, 2007, on the ground that in a multi-operator, multi-service industry, introduction of a new port policy was essential and that high port charges were detrimental to the industry. It reduced the amount from Rs 50,000 to Rs 39,000 per port.

BSNL argues that the reduction in charges would cause it an annual loss of about Rs 100 crore.

Pvt telcos told to submit financial details to CAG
In another order related to the telecom sector, the Supreme Court today directed private operators to give their financial details to the Comptroller and Auditor General (CAG), but stopped the the statutory auditor from vetting the papers till a case on jurisdiction was decided by the Delhi High Court. The Bench headed by the Chief Justice directed GSM operators to give revenue sharing details to CAG within two weeks from today to ensure that the government was getting its due by way of licence fee.

However, the court clarified no audit would be done as CAG’s jurisdiction to audit the accounts of private telecom firms was still to be decided by the high court.