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Mar 18, 2016 07:33 PM IST | Source: CNBC-TV18

TRAI will comply with SC order on call drop case: RS Sharma

In an interview with CNBC-TV18, RS Sharma, TRAI Chief said that the regulatory authority will conduct another test in April on the call-drop issue.

Telecom Regulatory Authority of India (TRAI) will comply with the Supreme Court order on call drop case, says RS Sharma, TRAI Chief.

His comment came after the apex court on Thursday asked the telecom regulator to reconsider its decision to penalise telecom companies for call drops.

In an interview to CNBC-TV18 he said TRAI will conduct another test in April on the call-drop issue.

He refrained to further comment on the call drop case as it is sub-judice.

Below is the verbatim transcript of RS Sharma's interview with Shereen Bhan on CNBC-TV18.

Q: I know you are constrained because the matter that I am going to talk to you about is subjudice but nevertheless, let me ask you to comment on the observations that were made by the Supreme Court yesterday on the back of what our court reporters are reporting and I am going to quote what they said, "The Supreme Court observed yesterday that it appears that nobody has seen the technical papers on the day of framing the regulation", you passed the order on the call drop penalty in October. A technical paper of the TRAI which released a month later, which suggested that call drops are not necessarily only on account of poor quality of service providers. The court then also goes on to say, "Please tell us in an affidavit whether you will consider amending the regulation or you still want to stand by them". Is there a scope for reconsideration at all?

A: Let me first say that because the matter is subjudice, pending before the Apex court of the country, it will not be appropriate for me to make any kind of observations. The only observation which I can make is that the orders of the Supreme Court shall be carried out that is what I can say.

Q: Which means that you will be filing an affidavit, you will not tell us.

A: Whatever has been ordered by the Supreme Court shall be complied with.

Q: Let me ask you then about the points that the SC raises and I will ask you to comment on that and that is the argument that telecom companies have also made in court as part of their representation and this is something that your own technical paper also highlights in the month of November that call drops could not be blamed merely on service providers, there are a whole bunch of other issues. Would you at least agree that perhaps there is room to reconsider given the fact that telecom service providers are not only to blame for the call drop situation?

A: As I said to you, it is a matter pending in the court and whatever argument will be made on the side on behalf of the TRAI will be made in the court of law.

Q: Do you believe that this has maybe pushed you on the backfoot, it is a little bit of an embarrassment as far as TRAI is concerned?

A: I will refrain from making any comments whatsoever on that issue except that the SC's orders shall be complied with.

Q: Let me ask you about what the situation currently looks like as far as call drops are concerned. You have had the telecom operators provide you with data, you have done your own auditing in the month of December-January if I remember correctly but it didn’t show any significant improvement. Where do things currently stand today?

A: We are going to conduct another test in the month of April and we will find out because we do periodic tests in a number of cities and last time we did seven of them and we will find out whether there has been any significant improvement or not. As you rightly said, there was no improvement when the tests were done in December. Let us see whether there is any improvement.

Q: Has there been any improvement in the situation where sell towers have been sealed, where the government has said that you can set up towers on government land, have you seen any follow-up action on that front?

A: This is an issue, which is pending in the SC.

Q: But you can give us an updates on whether or not the government's land being used to set up towers is being followed through on?

A: The basic argument, which I can say is that nowhere in the licensing conditions of the telecom service providers is it provided that the government will make the land available for the towers or the government will make other kinds of things.

Q: But that has gone on record to say that they will do that?

A: That could be a facilitation but essentially it is not a part of the contract and if you have legal issue, you go by contract.

Q: So you are saying that it is not part of the contract but the government has said it also wants to play facilitator in this matter, so can we expect some forward movement because this has been the conversation that has been had between telecom operators, the government, the regulator for almost six months now?

A: Let me put it this way. I would have had conversations on this issue but in a different content for different time but not at this moment where the case is pending before the SC.

Q: Let me then move on and talk to you about another issue, which is not pending before the SC -- at least not yet -- and that is the issue as far as the auction is concerned and the pricing for 700 megahertz band. Has there been any further conversation between you and the government because again report seemed to suggest that the DoT panel has found some issues with the methodologies that has been deployed as far as the 700 megahertz pricing is concerned?

A: To my knowledge, we have not got any reference back from the DoT as of now.

Q: But do you believe or do you at least take on board the reservations that have been made by the industry as far as the pricing is concerned, and most saying that this will be a non-starter of an auction if the reserve price stays as is?

A: The issue is that when the TRAI make such recommendations relating to reserve prices, we carry out a very detailed consultation process and the same was done and we also had an open house discussion in which various views were expressed about -- whether to auction or not to auction and what kind of reserve price should be set up. So essentially this whole process for the recommendation has been done after consulting all these stakeholders. So, therefore it will not be appropriate for me to say that whether I agree or disagree because all those views were made before the consultations were on.

Q: Stakeholders will also mean telecom service provider and telecom service providers believe that this is prohibitable and this will lead all of them to pause and re-evaluate even participating in the auction?

A: Telecom service providers are certainly the most important stakeholders in the spectrum auctions and we had consulted every telecom service provider, we have consulted every stakeholder.

Ultimately, in a consultation process of this kind of recommendation, one has to consider the overall sort of inputs from everybody and that is what we have done.

Q: Is there room for the TRAI to review this given the negative feedback that you are getting from as you yourself just pointed out the most important stakeholders in this matter?

A: Negative feedback should not be a reason enough for us to review. It is not they versus TRAI essentially there is a set rule for review of this recommendations by TRAI, which is essentially then the government will give us a back reference if there is any reference, we will consider it as per the set practices and procedures.

Q: So what can we expect now as far as the auction timeline is concerned? You probably had some kind of a conversation with the government on this even though the DoT panel hasn’t come back to you with the reference on the pricing itself?

A: The auction timeline is not in the mandate of TRAI, it is for the government to take a call as to when they want to auction, what they want to auction. As far as our role is concerned, we gave a recommendation on the reserve pricing and that is where our role ends.

Q: Let me ask you for your comments on what the telecom minister or at least the finance minister is hoping this sector will provide by way of revenues in the Budget, a figure of Rs 98,000 crore from the telecom sector not just by way of auctions but on the back of what they provide to the government on an annual basis in any case through levies etc. Do you believe that this is going to be practical?

A: I have no comments to offer on that issue.

Q: One would imagine and one talks to people in private, they believe that this is the gross over estimation?

A: I have no comments to make on this. My role has ended as of now when we made the recommendation on the reserve pricing. Thereafter it is the auction the timings, what they want to auction is essentially the prerogative of the government.

Q: Let me then ask you about an issue that is your mandate and that is to do with the net neutrality regulation. You have already put out your order as far as this discriminatory pricing is concerned and I have to say that the feedback has been very positive, in fact some are going to the extent to say that India may have provided the roadmap to other countries even as far as discriminatory pricing is concerned. There are some concerns though on that front and that has to do with this business of the internet loopholes being misused, your comments on that and do you believe that that is something that there is a need to plug a possible loophole there?

A: No, I do not believe there is any loophole in fact, the regulation is very clear that what cannot be discriminatorily priced. It is also very clear and the area as to what does not fall beyond within the mischief of the regulation or within the domain of the regulation is also very clearly defined by the regulation. So I do not think there is any scope for misinterpretation or there is any loophole.

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Q: You believe the concern that maybe some service providers could use the intranet route to actually resort to discriminatory pricing is an exaggerated concern?

A: I believe that the regulation is very clear in its intent and its language and its definitions and there is no scope for any misinterpretation.

Q: What can we now expect as far as the net neutrality regulations are concerned specifically? There is this business of fast lane, slow lanes, regulators around the world whether it is the Federal Communications Commission (FCC) or it is the EU has taken positions on that. What can we expect now as you frame the regulations here in India because this was a matter that was not addressed in previous order on discriminatory pricing?

A: The current regulation which the TRAI has issued, essentially has dealt with certain components or aspects of net neutrality from a tariff perspective. So, essentially what we have said is that you cannot discriminatorily price any data packet, the wheeling of that data packet on the basis of where this data came from, where this data is going to and what this data contains. So, these three aspects have been taken care of.

However, though I will not venture to define net neutrality, but I would say, there are certain other aspects which you yourself mentioned about, fast lanes or the throttling part of it, they are not directly related to tariffs and therefore we had not taken any call on them. Recently the government of India has actually given us, department of telecom has given us a letter requesting us to provide information on a larger issue of net neutrality and we are soon going to come out with a consultation paper (CP) where we will discuss this whole issue of what kind of framework do we need to put in place in our country for net neutrality.

Q: One of the issues we have just discussed is going to be the ambit of this consultation paper whether or not we should have fast lanes or allow for throttling at all but what are the other aspects that you are going to look at and I ask you this in the context of what we could expect for instance in the treatment of over-the-top (OTT) players because this has been a matter that has also come up, should OTT players also be treated on par with service providers when it comes to at least voice calls for instance?

A: Our view is that the three issues of origin, destination and content having been taken care of in the discriminatory pricing regulation, whatever are the residual issues of net neutrality, they will certainly be taken into account in the consultation paper which is coming forward. What we are proposing is that the issues of OTT, the DoT committee on net neutrality had also brought out a paper, all these will be taken as inputs and feedbacks while proceeding forwards on this whole issue of net neutrality.

Q: Do you think that there is merit in the argument that telecom service providers are making when it comes to OTT players, the Whatsapp’s, the Viber’s of the world saying that at least as far as voice calls are concerned let there be parity?

A: This is again an issue which will be decided out of consultation so we will have a consultation on all these issues of throttling, fast lanes and other kinds of whatever related issues fall within the overall ambit of net neutrality, we will have consultation and I am sure we will be able to come out in a couple of months, the broad kind of framework which we will propose to the government.

Q: So you think it will take at least a couple of months?

A: It will because ultimately the consultation will probably take another 15 days to come out because we are formulating the issues. Thereafter we will have to take one month’s period approximately for comments and then counter comments and then open house discussions. So, the whole consultation process of TRAI will take about two to three months.

Q: Let me also ask you because net neutrality regulations have now been formulated by the US regulator, have been formulated by the EU, is the TRAI looking at current regulations around the world as a model, as a benchmark perhaps?

A: When we have the consultation paper, the consultation inputs which come out of the consultation paper are one set of inputs. We also study the trends in the world, we also study the other regulations, similar regulations around the world. So, essentially the process involves studying all the models which exist in the world, what comes out of our stakeholders views, what the technological developments are, all these are taken into consideration when you formulate a final policy recommendation or a regulation.

Q: Since you are talking about consultation, let me ask you about the previous consultation which really became Facebook versus everybody else and it dealt with net neutrality on a whole but of course the order had to do with the differential pricing. Were you disappointed by the manner in which that process played out?

A: Whatever communication, which took place between us, the TRAI and the Facebook is available on the internet.

Q: I have seen that and I have heard your comments as well that this is not an online poll and you weren’t expecting likes, you were expecting justified commentary on why certain things should be taken forward.

A: The consultation process of TRAI is one of the best methodologies and processes to arrive at certain policy decisions or certain recommendations and we are grateful that we got such large number of these inputs.

The only problem with some of the inputs were that they did not address the question, which TRAI had raised in the consultation paper and we were disappointed to the extent that we did not get any meaningful inputs for our policy or rule formulation. That is what we had approached back because we could not talk and approach these people who provided inputs through Facebook's platform. We had approached Facebook to allow us to approach them to at least tell them what our questions are.

Q: Are you worried that the similar situation may play out as you start the consultation for the net neutrality regulations?

A: We are ready for that and we will be very happy if more and more inputs come in. What we are concerned about is the fact that as we have said in the Facebook part also, that you should not reduce it to an exercise where the large number of mails come without any reference to the consultation paper or the issues raised therein. That should not happen. That is not a desirable thing but otherwise we will welcome any inputs on the questions which we raised in the consultation paper.

Q: Let me also ask you about the priorities that you have as the regulator beyond dealing with the call drop situation and of course auctions, which will be top of your priority list. Digital India and connectivity -- there have been concerns on penetration, there have been concerns on the rollout obligations, deadlines have been missed, are you feeling at all hopeful or confident that perhaps we are now going to start to see a pick up? Will you be able to achieve or will the government be able to achieve the milestones that have been set?

A: I am very hopeful and excited and there are a couple of developments which have taken place which I would like to share them with you. One is that the Bharatnet project, which the government of India as DoT is going to take up, there we have provided our own inputs saying that besides the methodologies, which has been suggested in the Bharatnet document, there are the public-private partnership model could be another model which could be considered.

Q: But there doesn’t seem to be too much enthusiasm in private sector, would you at least admit and acknowledge that?

A: No, there is a huge enthusiasm in private sector and I think all these developments and a sort of revolution in the telecom sector has happened because of private sector. So, let us not undermine that. I am sure if we are able to  create appropriate framework we should be able to attract the private sector.

Q: Do you believe that currently the framework that has been created is conducive to private sector participation?

A: Precisely what we have recommended in our recommendations to the government as to what could be the business model to proceed forward which will basically ensures incentive alignments, which will ensure enthusiasm and the incentives for the private sector to participate and therefore we are provided by our own whatever we thought was appropriate sort of input and this also happened after a due consultation process where we are saying that this could be a good model to implement Bharatnet.

Q: What is your own estimation. Every day there are new reports on what could be the penetration, what could be the number of subscribers in India and so on and so forth. What is your own estimation because obviously you know where the roll out stands currently, you know where things stand on part of the government. What would be your fair assessment as far as penetration is concerned and an additional growth?

A: The current ranking of India in the internet penetration are not very encouraging. However with Bharatnet coming in another recommendation which the TRAI has made to the government which is regarding using the digital cable TV network to provide the broadband connectivity to the homes is very good idea.

Q: But where does that stand when it comes to taking off because the last chat we had we talked about wide spaces being used. We also talked about this. So, where do things currently stand on the ability to roll this out?

A: We have had conversations with the government with the department of telecom with the honourable minister and there is a huge sort of enthusiasm, and actually it is not a technology issue, it is essentially a business model issue. It is essentially a taxation issue. So, we need to create that kind of framework where we should be able to enable these businesses to come up.

Q: So, what is the specific taxation issue that you would like the government to address and that would obviously be the remit of the finance ministry?

A: We have made some recommendations to the government. Essentially the taxation issue is that currently the internet service providers have to pay certain percent of AGR to the government. Now, if a person who is providing digital cable TV services if he also provides internet through these pipes then obviously what should be the income which should be considered for AGR purpose is to compute that, that is one issue which is coming up. So, we need to sort out some of those details and I am sure once you sort out the details it should be possible for this sector to take off.

Q: We have talked about auction, let me ask you about audit. I don't know if you will comment on it or not but we have now got the government ordering a special audit of private telecom companies on the back of a reference that has been made by the CAG. Are you worried as the regulator that we are once again going to be burdened by regulatory uncertainty, we are going to be burdened by - probably this matter is also going to be headed to court. Litigations, so the obligations that you are hoping that the private sector will be able to fulfil the private sector is going to be too busy to address all of this stuff?

A: First of all I am not really familiar with this whole issue as to what the CAG's orders are in detail. Of course I have seen it in the newspapers, so I will not be able to make any comments on that. There may be obligations which are mandated by law, there may be some statutory requirements, those requirements will have to be fulfilled by all stakeholders. So, therefore one should not make non-fulfilment of these as an excuse for not doing things. That is not really the way to look at. I am of the view that notwithstanding all these requirements which may be demanded by law it is possible to work in that. In fact so long as there is certainty, so long as there is incentive alignment, so long as there is a participation, so long as there can I create business models things will go on.

Q: Let me ask you about another important development and that is the passage of the Aadhaar bill. So, the Aadhaar now gets statutory backing sanctity. How do you see this playing out because the government believes it is going to bring down the subsidy bill significantly. The committee headed by Nandan Nilekani, the market regulator SEBI believes that the Aadhaar could be the platform on which the next wave of innovation for the mutual fund industry perhaps could be leveraged. How do you see the passage of the Aadhaar?

A: I think personally for me I think this is a great development which has taken place. Aadhaar is certainly a foundation for a truly transformational things to happen. A lot of innovations to happen. It has the capability of providing what we call the presenceless, cashless, paperless governance.

In terms of applications my belief is that we have just now scratched the surface. There are large number of applications which will ride on Aadhaar, which will not only be cleaning up the subsidy system and bringing about huge saving to the government but it will also clean up the entire public service delivery space.

It will also be causing lot of convenience to people. So, I see Aadhaar and we have really leapfrogged because we have from a no identity to an online digital identity which is present everywhere, which is authenticable, which is unique. So, it is something really fundamental which we as a country have done.

Many other countries are looking at this project, how it was done. Yesterday I had met two delegations from two different countries on the same issue.

So, I am very excited  to see this transformation happening in the country.

Q: Will your affidavit in the Supreme Court say that you stand by your order or will your affidavit leave some room for reconsideration which is what the Supreme Court has asked?

A: I cannot prejudge the issue. We will have to go through the process, the direction which the Supreme Court has given us and we will comply with that and we will file appropriate sort of affidavit. I cannot say what affidavit and what will be the content because the decision will have to be taken by TRAI and TRAI is not RS Sharma alone. TRAI is a five member body which will deliberate and take a view.

Q: So, today you stand by the order?

A: I can't make a comment. Today or any day I stand by my statement that we shall comply with the Supreme Courts directions both in letter and spirit.

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