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| Good time to clean telecom |
| Wednesday, 16 May 2012 | |
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TRAI has a new chief, an opportunity for a new beginning. The only pressing task is the auction of the 122 cancelled licenses. If new policies are formulated with a clean conscience and clear purpose, surely the SC must amend its prescriptions Only last week, I was asked whether the impact of a telecom policy proposal on prices would be 10 percent or 100 percent. In those short seconds, I did not have the speed of thought or the clarity of expression to explain that limiting the choice to two wrong answers amounted to begging the question. The impact of poor policies is neither 10 percent nor 100 percent. It is because of poor policies that India has terrible infrastructure in roads, power and water, and remains a wretchedly poor country. The TRAI proposals in question are deficient in sector understanding, erratic on technical facts and destructive in their consequence, and provide no platform for any reasoned discussion. To then answer the question where do we go from here, we have to ask how we landed here in the first place. Telecom policy has two killer reasons why highly specialized regulation is required. The first reason is Interconnect. When an operator interconnects with another, it is in effect using a competitor’s factory to produce goods, which it then uses to compete against that same competitor. This idea is so radical and so counter-intuitive that until 1984 it was considered fantasy, and telecom was seen as a natural monopoly. Introducing competition to telecom marked a triumph of policy ingenuity. So, the regulator has to be strong in technology, business and economics to determine interconnect terms that are equitable. The second reason why telecom regulation is specialized is Spectrum Management. Spectrum is finite. Regulation aims to maximize societal benefit by optimizing between aggregation of spectrum that enhances capital efficiency and disaggregation of spectrum that enhances competition. To meet these challenges of Interconnect Terms and of Spectrum Management, the specialist regulator makes transparent, sensitive, skilled, and stable policies. Otherwise telecom is like any other large sector, and not an arena for successive functionaries to force unnecessary change. Certainly, it cannot be the purpose of policy to create for player’s market opportunities through the policy backdoor instead of the market place. The telecom ministry combines the role of a government, a contracting party and an operator, and is conflicted in undertaking an activist policy formulation role. Every advanced telecom dispensation designs policy through a Regulator; indeed our first TRAI in the 1990s with Justice Sodhi as Chairman and Zutshi as Vice Chairman was shaping so well that the mandarins of Sanchar Bhavan who had earlier ceded control, now took fright. That TRAI was disbanded and ever since then it has been a slippery slope. We are at a historic fork. Either the EGoM can bury its head in the sand, abdicate responsibility and go through this mindless ritual. Which is to have a Telecom Commission, already burdened by the baggage of indefensible positions stoutly defended, consider these TRAI proposals, then to pick and choose, chop and change. So the best we can get are spaghetti proposals, without any coherent architecture. Such proposals will land at the EGoM, where not one member is expected to know the subject. Something will emerge, which will have the stamp of the Cabinet, but will take India’s only world-class infrastructure sector down the tube. There is, however, a superior alternative! First, for the EGoM to recognize this is a Titanic heading one way. Second, to acknowledge that an EGoM prescribing telecom policy is a poor idea (much like a health minister performing bypass surgery); their role is to create conditions that lead to good policy. And finally, to see that the time to decide is now! TRAI has a new chief, an opportunity for a new beginning. The only pressing task is the auction of the 122 cancelled licenses. The SC Order, albeit untidy in its effect, is clear, and auctions can be accomplished within the specified time; the task was made to appear complicated. In essence, all the SC has spoken out against is dishonesty. If there was no dishonesty, there would have been no SC intervention. Conversely, if new policies are formulated with a clean conscience and clear purpose, surely the SC must amend its prescriptions. The auction of cancelled licenses apart, most policy proposals are pure regulatory adventurism and should be shelved. The TRAI Act should quickly be re-enacted to make TRAI a truly expert and independent policymaking body going forward, offering better emoluments and drawing members from a deeper talent pool. Correspondingly, the telecom ministry should retreat into a more sovereign role. Meanwhile, TRAI could pick up such threads as need being picked up, and discard those that were recklessly being pushed. The recast TRAI would be well-advised to look at the multi-disciplinary Expert Committee Report of 2008, junked by the previous minister, but which was the last perspective view of the sector. And finally, the new TRAI can tell people like me to shut up. No argument is more telling than sincerity and capability! The stables of Augeas had over a 1,000 cattle, and had not been cleaned for over 30 years until Hercules undertook his fifth labor, re-routed the rivers Alpheus and Peneus, and swept out the filth. The EGoM has a bigger opportunity; with a fraction of that labour, it can sweep out the filth in Indian telecom. – This article has been authored by Sanjeev Aga, former CEO – Idea Cellular and it appeared in the May 16, 2012 edition of The Financial Express |
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