Telecom Regulatory Authority of India Act, 1997- An overview

INTRODUCTION

The main objective of the Telecom Regulatory Authority of India Act, 1997 (TRAI Act) was to
establish the Telecom Regulatory Authority of India (TRAI) and Telecom Dispute Settlement
Appellate Tribunal (TDSAT). The main purpose of these two institutions established under the
TRAI Act is to regulate telecommunication services, adjudicate disputes, dispose appeals and
protect the interest of the service providers as well as the consumers. The Act also aims at
promoting and ensuring orderly growth of the telecom sector.
A bill to establish a non-statutory telecom regulator was proposed in the Parliament by the
Government through an amendment to the Indian Telegraph Act, 1985. However, this proposal
was dropped by the Parliament because several Members of the Parliament argued for a statutory
telecom regulator. TRAI was then constituted under the presidential ordinance[1] issued in 1997,
later it was ratified by the Parliament by enacting the TRAI Act. Subsequently, TRAI Act went
through major amendments in the year 2000.

Amendment to the TRAI Act

The TRAI Act was amended through the TRAI (Amendment) Act, 2000 (“Amendment Act”).
Before the amendment, TRAI exercised both regulatory and dispute resolution functions. The
Amendment Act established the Telecom Dispute Settlement Appellate Tribunal to solely deal
with relevant disputes. There was ambiguity in the Act as to whether TRAI recommendations are
binding upon the Government; this was clarified by the Amendment Act.

Independent Telecom Regulatory Authority

In Delhi Science Forum v. Union of India, the Supreme Court while deciding on the
constitutionality of the National Telecom Policy, 1994 observed that it is necessary that the
telecom regulator should be an independent body. National Telecom Policy, 1994 allowed for
private participation in the telecommunication sector, and in the light of this policy change the
Supreme Court also emphasized on the necessity of an independent statutory authority in a
deregulated and competitive telecom market.

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Government Control over TRAI
TRAI is not a completely independent telecom regulator. The Government exercises certain
amount of control over TRAI. Under section 25 of the Act it has the power to issue directions
which are binding on TRAI. The TRAI is also funded by the Central Government. Moreover,
under section 35 of the TRAI Act, the Central Government has the power to make rules on
various subjects and such rules are binding upon TRAI. Therefore, TRAI is not a completely
independent telecom regulator as envisioned by the Supreme Court.

Scheme of the TRAI Act

The TRAI Act contains six chapters. Chapter 1 deals with applicability of the Act, key concepts
and definitions. Chapter 2 contains provisions for constitution of the TRAI. Chapter 3 deals with
the powers and functions of TRAI. Chapter 4 deals with establishment of appellate tribunal,
TDSAT and the procedure of the appellate tribunal. Chapter V deals with finance, accounts and
audit of the two institutions established under the Act. Chapter 6 consists of miscellaneous
provisions for the purpose of smooth functioning of the two institutions created under the Act.

Constitution of TRAI
Telecom Regulatory Authority of India (TRAI) was established as a corporation under Section 3
of the Act. The head office of TRAI is in New Delhi. TRAI constitutes of a chairperson and less
than two, full time and part-time members. The chairperson and the members of TRAI are
appointed by the Central Government and the duration for which they can hold their office is
three years or until they attain the age of 65 years, whichever is earlier. The persons who are
appointed should have special knowledge and prior experience in the field of telecommunication,
industry, finance, accountancy, law, management or consumer affairs. If someone, who has been
in the service of the Government prior to appointment then he should have served the
Government in the capacity of a Secretary or Additional Secretary for a period more than three
years.

Section 8 deals with procedure to be followed with respect to meetings of TRAI. All questions
before TRAI will be decided by a majority vote of the members, present and voting. The person
who is presiding the meeting will entitled to a second or casting vote.

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The TRAI may also appoint officers and employees in order to carry out its function under this
Act. Currently the officers and employees of TRAI are divided into nine divisions. The divisions
are:

 Mobile network division;

 Fixed network division;
 Converged network division; (iv) quality of service division;
 Broadcast and cable services division;
 Economic division (vii) financial analysis and internal finance and accounts division;
 Legal division and (ix) administration and personnel division.

Functions of TRAI

Section 11 of the Act gives the functions performed by TRAI. This Section overrides the Indian
Telegraph Act, 1885. The Act was amended in 2000 and the Amendment Act of 2000 gave 4
broad categories on the functions of TRAI:

1. Recommendatory functions

2. Regulatory functions

3. Fixing tariffs for telecom services

4. Any other function prescribed by the Central Government

These functions are elaborated below.

Recommendatory Functions of TRAI

The Authority has to make recommendations to the licensor either suo moto or upon an
application of request. The matters on which recommendations are made are:

1. Need for the introduction of a new service provider and its timing. Here, TRAI
analyses the existing situation of the service in a particular region.

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 2. Terms and Conditions of issuance of a license to a service provider. TRAI furnishes
the conditions on which license should be granted to a service provider under Section
4 of the Telegraph Act 1885.

3. Revocation of license due to non-compliance of terms and conditions recommended

by TRAI. Revocation of a license is a measure of last resort and hence, this function is
important for TRAI.

4. Steps to be taken to promote healthy competition, efficiency in service and enable the
growth of the industry. The motive behind this function of TRAI is to empower the
authority to supervise the industry thereby facilitating economic growth and
development.

5. Technological advancements in providing services. The quality of services enhances

with the improvement in the technological aspect of providing services. Moreover,
this regulation will aid in keeping the commercial developments in legal bounds.

6. Type of equipment used and their inspection. The purpose of this function is to ensure
better services by the service providers by making them undergo inspection of the
equipment used.

7. Measures of the development of technology and matters related to the telecom

industry in general. Encouraging research and innovation in the industry is crucial.

8. Effective management of the available spectrum. The term ‘spectrum’ is not defined
anywhere in the Act or the Telegraph Act. In general, it means the electromagnetic
spectrum in available frequencies.

Regulatory Functions of TRAI

Regulatory functions performed by TRAI are as follows:

1. Ensure compliance of the terms and conditions mentioned in the license. Compliance
can be ensured either by the issue of directions or by recommendation of termination
of the license on the ground of non-compliance of terms and conditions.

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 2. Fix the terms and conditions of the interconnectivity of service providers.

3. Ensure technical harmony and effectiveness in interconnectivity between service

providers.

4. Direct courses of action among organizations for sharing their income received from
providing services.

5. Set out the standards of quality of service and conduct surveys periodically to protect
the public interest and ensure better service.

6. Prescribe the time period for proving local/ long-distance circuits of telecom.

7. Maintain a register containing all the interconnection agreements. Any member of the
public is free to inspect this register upon payment of the prescribed fee.

8. Ensure compliance of universal service obligation. It is not defined under the Act,
however, has a mention in the National Telecom Policy, 1999. Universal service
obligation refers to making the economic and social opportunities of the telecom
sector available to the public at large.

Other functions of TRAI

Under Section 11(1)(c) of the Act, TRAI is responsible for levying fees and other charges as per
the rates determined in the regulations. Sub-clause is a residuary clause which states that the
administrative and financial functions prescribed by the Central Government are to be performed
by the Authority for the effective implementation of this Act. In case the Central Government
feels that the recommendation given by the authority requires modification, then such
recommendation can be sent back for reconsideration within a period of 15 days. Under Section
12 of the Act, TRAI has the power to call for documents for the purpose of investigation and
inspection. The Authority is obligated to carry out all these functions while keeping in mind
transparency of the exercise of its power. Section 13 empowers the Authority to issue directions

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for carrying out its functions. The Central Government has the authority to prescribe such other
functions that are necessary.

Telecom Disputes Settlement Appellate Tribunal

The Telecom Dispute Settlement Appellate Tribunal (Tribunal) is established under section 14 of
the Act. It is the sole dispute resolution body in the communication sector. It can adjudicate upon
any dispute between:

1. Licensor (Central Government) and a licensee.

2. Two or more service providers.
3. Between a service provider and a group of consumers.

However, the Tribunal does not have any jurisdiction to try any matter which deals with anti-
competitive trade practices or any consumer complaint.

Grounds and Procedures for Appeal to the Tribunal (Section 14A)

 The Central Government, State Government, any local authority or any person can
approach the Tribunal for adjudication on matters related to dispute between parties
mentioned above.

1. It can make recommendation either on its own accord or on the request of the
Government on the following matters:
o Need and timing of new service provider.
o Terms and conditions of the licence which may be granted to the service
provider.
o Revocation of licence for not following the term and conditions of the
licence.
o Measures to facilitate competition in the market and promote efficiency
and growth in the telecom sector.
o Type of equipment to be used by service provider.
o Technological improvements in the services.

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 o Measure for development of telecommunication technology.
o Spectrum management.
2. The TRAI also has to discharge certain functions apart from making
recommendations to the Government:
o Ensure compliance with the terms and conditions of the licence.
o Fix the terms and conditions of inter-connectivity between service
providers.
o Ensure technical compatibility and effective inter-connection between
different service providers.
o Regulate any arrangement between service providers for sharing of
revenue derived from providing telecommunication services.
o Lay down standards for quality of service and also ensure and conduct
periodal survey as to implementation of standards for quality of service.
o Lay down and ensure the time period for implementing local and long
distance circuits of telecommunication between different service
providers.
o Maintain register of interconnect agreements between service providers
and such register should be made available to any member of the public
for inspection on payment of a fee.
o Ensure effective compliance with the universal service obligations.
o Levy fees and charges at such rate and for services as determined by
regulations.[2]

The recommendations made by the TRAI are not binding on the Central Government. However,
the Central Government has to mandatorily ask for recommendations from TRAI with respect to
need and timing of new service provider and terms and conditions of the licence to be granted to
the service provider. TRAI has the obligation to forward the recommendation to the Central
Government within 60 days from the date of the request for recommendation. TRAI may also
request for relevant information or documents from the Central Government to make such
recommendations and the Central Government has to furnish such information within seven days
from the date of the request.

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The Central Government can issue licence to the service provider, if TRAI fails to give any
recommendation within the stipulated period. Where the Central Government is of the opinion
that the recommendations made by TRAI cannot be accepted or need modification, then it can
send them back to TRAI for reconsideration. TRAI may reply within a period of 15 days from
the date of reference.

TRAI also has the power to notify in the official gazette the rates at which telecommunication
services are being provided in and outside India. TRAI shall ensure transparency while
exercising its powers and discharging its functions.

TRAI under section 12 has the power to call for information and conduct investigation. It also
has got powers to issue directions under section 13.

Telecom Disputes Settlement Appellate Tribunal

The Telecom Dispute Settlement Appellate Tribunal (Tribunal) is established under section 14 of
the Act. It is the sole dispute resolution body in the communication sector. It can adjudicate upon
any dispute between:

1. Licensor (Central Government) and a licensee.

2. Two or more service providers.
3. Between a service provider and a group of consumers.

However, the Tribunal does not have any jurisdiction to try any matter which deals with anti-
competitive trade practices or any consumer complaint.

Grounds and Procedures for Appeal to the Tribunal (Section 14A)

 The Central Government, State Government, any local authority or any person can
approach the Tribunal for adjudication on matters related to dispute between parties
mentioned above.
 An appeal can be referred to the Tribunal in case any party [3] is aggrieved by the
decision of TRAI. However, such appeal has to be made to the Tribunal within 30
days from the date on which the party receives a copy of the decision or direction
given by TRAI. However, the Telecom Tribunal may condone the delay provided that
there is a reasonable ground justifying the delay.[4]

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  The Tribunal will pass an order after giving an opportunity to be heard, to the parties
to the dispute.
 The Tribunal is also obligated to send a copy of the order passed by it to TRAI.
 In case of appeal from the decision of TRAI, the Tribunal should try to dispose of the
case at the earliest and try to give a decision within 90 days from the date of appeal.

Composition of the Tribunal (Section 14B)

The Tribunal consists of a chairperson and two other members, appointed by the Central
Government. Selection of chairperson and the two members is done in consultation with Chief
Justice of India.

Qualification and term of office of the Chairperson and Members

The minimum qualification for a Chairperson is that he is or has been a judge of the Supreme
Court or a Chief Justice of a High Court and the minimum qualification for a member is that he
should have been at the post of a secretary to the Central Government or at any equivalent post in
the Central Government. A person can also be qualified as a member of the Tribunal if he has
held the position of Secretary under the State Government for a period more than two years and
has knowledge and experience in technology, telecommunication, industry, commerce or
administration.

Term of Office
The Chairperson can hold office till he attains the age of 75 or completes three years, whichever
is earlier. The members of the Tribunal can hold office till they attain the age of 65 years or
complete three years, whichever is earlier.

Procedure of the Tribunal

Procedure and powers of the Tribunal is laid down under section 16 of the TRAI Act. The Civil
Procedure Code, 1908 which lays down the procedure of the conventional courts is not
applicable to the Tribunal.

An appeal from the Tribunal’s final order in a matter can be directly referred to the Supreme
Court under section 18 of the TRAI Act. However, in the circumstance where the Tribunal has
passed an order with the consent of the parties to the dispute, no appeal can be made to any court
or tribunal.

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Within five years of its creation the Tribunal has already decided 400 cases consisting of
complex questions of law.

Conclusion

The TRAI Act, 1997 has yielded numerous benefits to the telecommunications industry due to its
policies and regulations. The operational costs and other expenditures which were borne by
operators earlier have been drastically reduced, which ultimately has brought economic growth
and development in the country. The Act has allowed a public stakeholder organisation to
include other associations like private companies, policy organisations, academicians etc to be a
part of the decision making the process of the government, making an inclusive society. The
recommendations, consultations and regulations given by the Act have helped in the
transformation of the telecom industry.

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