Date:19/09/2005 URL: http://www.thehindubusinessline.com/2005/09/19/stories/2005091902650100.htm

Back TRAI rejects move to issue directive on access charge

Thomas K. Thomas

New Delhi , Sept. 18

THE Telecom Regulatory Authority of India (TRAI) has rejected the Union Government's move to issue a policy directive on the Access Deficit Charge, saying that it would have a "definite" effect on the regulator's independence.

TRAI has told the Government that such a move would shake the confidence of the investors in the telecom market and therefore, it is not advisable to invoke directives under Section 25 of the TRAI Act.

The Department of Telecom (DoT) had earlier shot off a missive to TRAI, asking it to consult the Government before finalising the new Access Deficit Charge (ADC) regime. DoT had proposed to invoke Section 25 of the TRAI Act, which gives the Government the powers to issue directives to the telecom regulator on policy issues.

Responding to the advisory letter from the DoT, which had raised questions over the functioning of the telecom regulator with respect to the ADC,, TRAI said that it is already working on the lines mentioned by the DoT and a direction from the Government is not necessary.

TRAI, however, added that it disagreed with the DoT's view on certain issues such as having a graded revenue-sharing arrangement for collecting ADC.

"It is an internationally accepted fact that an independent and effective regulator increases the confidence of investors in any market. This is true of India also. TRAI reiterates that the proposed policy direction is not necessary," the TRAI note said.

The telecom regulator said that it is already moving towards implementing an ADC regime based on revenue sharing, as suggested by the Government.On the issue of excluding revenue collected from rural subscribers for the purpose of calculating ADC, TRAI said that though it agreed with the Government's views in principle, there is not enough data available to implement the same. "In the light of the above, no direction from the Government is necessary and we can implement the scheme if operators can provide data," TRAI said.

One of the primary concerns of the Government is to keep the quantum of the ADC collected at Rs 5,000 crore to protect the rural rollout being undertaken by BSNL. TRAI, on the other hand, is looking at reducing the quantum in line with demands raised by the industry and consumer groups.