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Cabinet decides to get rid of pesky TRAI

Josy Joseph in New Delhi

The Union Cabinet today decided to dismantle the controversial Telecom Regulatory Authority of India and replace it with two separate bodies.

Announcing the decision to issue a Telecom Regulatory Ordinance, Information and Technology Minister Pramod Mahajan said TRAI would be replaced with a dispute settlement body and another appellate tribunal.

"With this ordinance we are reconstituting the composition of the present TRAI which had seven members," Mahajan said.

He said the new body would have a chairperson, two permanent members and two part-time members.

The proposed dispute settlement body and the tribunal will both have a life of three years.

Mahajan said it would not be necessary for the chairperson of the new body to be a former Supreme Court judge. Justice S S Sodhi currently heads TRAI.

The ordinance will come into effect "soon", the minister said.

The government's decision comes in the wake of the Delhi high court's order of January 18 spiking the TRAI's decision to allow free incoming calls on cellular phones.

The court quashed the 'calling party pays' (CPP) regime notified by the authority after a longstanding dispute in which the Department of Telecommunications and the Mahanagar Telephone Nigam Limited took on Justice Sodhi's team for favouring private parties.

The court had stayed implementation of the caller-pays regime on October 28 last year. A division bench comprising Chief Justice S N Variava and Justice S K Mahajan said TRAI could only regulate interconnect agreements between operators and not impose interconnection rates on service providers.

The bench also said TRAI regulations could not supersede conditions in licence agreements.

The petitioners, DoT and MTNL, had both argued that since cellular licence agreements did not provide for access payments to cellular operators by either of them, there was no question of sharing revenue for incoming cellular calls.

The TRAI had notified the CPP regime, saying that incoming calls to cellphones would be free and the caller dialling the cellular number would be billed at a premium. The revenue was to be shared between the basic and cellular operators in a 1:2 formula.

While observing that the TRAI had an important role in protecting consumer interest, the bench said the benefits of moving cellular operators to a financially less taxing, revenue sharing regime ought to have been passed on to the consumers.

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