India: Regulatory effectiveness questioned

28 October 2002 – According to a report by the Times of India, the Telecom Dispute Settlement Appellate Authority (TDSAT) has stayed two orders against government-owned Bharat Sanchar Nigam (BSNL) by the Telecom Regulatory Authority of India (TRAI) in the last ten days, raising questions about the working of the country's regulatory regime.

On October 23, TDSAT stayed a TRAI order regarding changes in the reference interconnect offer (RIO) developed by BSNL. The RIO that BSNL submitted to TRAI for approval allowed BSNL to disconnect a company if they default on interconnection charge payments. TRAI had rejected BSNL’s request for this power.

TRAI also asked BSNL to incorporate a clause making it mandatory for the incumbent operator to bill subscribers in case new operators do not want to do billing. There were more than thirty modifications that TRAI asked BSNL to incorporate. BSNL protested the changes to TDSAT and was granted a stay.

Last week, BSNL complained to TDSAT about a TRAI order to make it mandatory for an operator providing more than one service to have its tariffs approved by the regulator. BSNL operates basic telephony, national long distance (NLD) and cellular mobile services. Therefore, BSNL would have to get its tariffs approved by TRAI. However, TDSAT stayed TRAI’s order.

These recent actions by TDSAT raise questions about the functioning of the regulatory regime.