Cracks in the signal

To a distant observer of telecommunications in India it would come as a surprise that the sector has been on the front pages of both business as well as popular newspapers regularly for over a decade.

Vikram Raghavan's large book documents how the government, courts and regulators have worked sometimes together""occasionally at odds""to create a market that is now delivering unparalleled value to users and is so coveted by investors.

The quality of the regulatory regime in an infrastructure sector is universally regarded as an important determinant of the size and quality of investments it can attract. This is especially true of telecommunications, where regulatory treatment of contentious issues like interconnection and radio spectrum will typically determine whether new players enter the market at all.

Raghavan documents diligently the evolution of TRAI's rules for interconnection between telecom operators from the self-serving ones drafted by the grudging reformers in the government's Department of Telecommunications. He details early problems with licensing, which nearly killed the new entrants. The process of fixing the interconnection and to ensure fair competition in the market place led to several changes in policy, regulation and law that were necessary to make it happen. In particular, DoT's role as a licensor and policymaker no longer allows it or its company, BSNL, to escape the scrutiny of a now more mature and independent TRAI.

The book has extensive details of the various milestones in India's telecommunications reform exercise. These include the many hiccups in starting cellular services in the metros, the many subsequent disputes following the setting up of TRAI in 1997 to the merging of fixed and cellular services in 2003. The developments since the expansion of TRAI's mandate to broadcasting and the introduction of CAS are ably covered.

There are many nuggets and insights in its diligent review of historical documents, case law and the many decisions of government, TRAI, TDSAT and courts over the years. Few would have realised that TDSAT is now more occupied with disputes amongst broadcasting players than amongst telecom firms.

Raghavan suggests that Section 25 of the TRAI Act, which allows the governments to make binding directions to the regulator on grounds of national sovereignty, security, relations with foreign countries, public order, morality, decency, etc. "is a birth defect inconsistent with legislative intent to establish an independent regulator". It is a moot point whether this yet to be invoked provision is a bigger threat to TRAI's independence than the appointment of chosen bureaucrats, the frequent movement without adequate safeguards of senior staff between BSNL and TRAI, the reduced tenure and job security of the chairperson and members of the authority following the 2000 amendment to the Act (which ironically, otherwise clarified and increased TRAI's jurisdiction). Many of the controversies about TRAI's independence and much litigation have accompanied a change of guard at the Authority. Cases in point are the somersault on opening long-distance services, the approval of limited mobility services in 2000 or the move towards unified licensing. Raghavan's well-deserved but often uncritical praise of TRAI and TDSAT ignores that their role in several disputes over the years has sometimes attracted scathing criticism by players, the Press as well as the Supreme Court.

Raghavan's biodata suggests that his experience of the sector is second-hand. His disadvantage is in over-reliance on printed material. The author is at his best when he dissects "finished" documentation such as regulations and legislation. However, it is quite different where the only sources he uses are assorted newspaper reports referred to throughout the book. Many important statements are unsupported (e.g. "it was revealed that the company [HFCL] had colluded with various political and bureaucratic players," p 302).

Occasionally, Raghavan reads more into the material than is actually there. He says that the New Telecom Policy of 1999 acknowledged a bias in allocations, which favoured the defence forces. Similarly, he says that the same documents mention so-called "other services" to include diverse IT-related services and this represents a scarcely acknowledged but extremely important achievement that led to a boom in IT-based industries (p. 91).

The book frequently lacks accuracy and depth, especially in its discussion of policy and technology. A sense of political economy is often missing. The primer on technology and the glossary of technical terms need several corrections (e.g. bandwidth, DSL, Internet telephony). Better proofreading could have removed many errors that the spellcheck software often misses.

The author has been an active consultant during and after the deregulation of India's telecom sector

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Communications Law in India

Vikram Raghavan
Lexis Nexis Butterworths
Price: Rs 1,795; Pages: 804