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DoT wants to break free from Trai control, seeks legal opinion

DoT wants to break free from Trai control, seeks legal opinion
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First Published: Wed, Jun 02 2010. 10 55 PM IST

Photo: Harikrishna Katragadda / Mint
Photo: Harikrishna Katragadda / Mint
Updated: Wed, Jun 02 2010. 10 55 PM IST
New Delhi: The department of telecommunications (DoT) is seeking legal opinion on whether it can avoid consulting the Telecom Regulatory Authority of India (Trai) before making changes to existing rules that govern the telecom sector.
DoT and Trai have been lately sparring over the former’s decision to alter licence terms under which telecom firms operate second-generation (2G) mobile services.
Photo: Harikrishna Katragadda / Mint
“We have asked for a legal opinion since a number of issues have come up in the past that have led to some friction between Trai and DoT,” a DoT official said.
Another official confirmed that DoT was in talks with lawyers and the law ministry on the issue. Both spoke on condition of anonymity as they are not authorized to speak with the media.
The Trai Act makes it mandatory for DoT to consult the regulator before introducing new policies or licences for new technologies, such as high-speed third-generation (3G) mobile telephony. But the law is vague on the DoT’s freedom to tweak rules governing existing technologies, such as 2G services.
Until now, DoT has followed the norm of referring even minor changes to Trai. But it wants to change that now, after Trai said it should get the regulator’s opinion before changing policy regarding a so-called uniform licence fee for telecom companies.
A DoT panel had recommended that telecom firms be asked to pay a consolidated 8% licence fee for 2G services, instead of paying under different heads. The move followed allegations that telcos were reporting their revenues under heads that faced lower fees to reduce overall payment.
But Trai told DoT it should take the watchdog’s opinion before changing the policy, to which the government agreed. The issue was clubbed with Trai’s recommendations on overall 2G spectrum management and licence terms, in which the regulator proposed a uniform licence fee of 6%.
Mahesh Uppal, regulatory expert with Com First India Pvt. Ltd, said DoT does not need to ask for the regulator’s opinion for changing existing licences, but it has to do so for bringing in larger changes. “They are not expected to ask, but are obliged to.”
“Sometimes it is just better to go to Trai as many of the companies use it as a tool in the courts if we don’t go,” the second official quoted above said. “DoT is limited in this aspect as it cannot hold consultations with the industry like Trai can.”
The issue has wider ramifications as DoT is currently reviewing Trai’s recommendations on 2G spectrum management and licensing, which have been criticized by telecom companies.
A Mumbai-based analyst with an international brokerage firm said on condition of anonymity that if legal experts agree DoT does not need Trai’s approval for tweaking existing rules, it will heavily undermine the watchdog’s authority.
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First Published: Wed, Jun 02 2010. 10 55 PM IST
More Topics: Telecom | Trai | 2G | 3G | Mobile telephony |