POLICY-MAKERS rarely have the gift of clairvoyance. And the directions that technology can take are often unpredictable. Keeping pace with these possibilities in the public interest necessarily involves a process of continually changing policy guidelines.
On May 7, the Supreme Court adjourned hearings on a petition filed by the Cellular Operators' Association of India (COAI), asking for the reversal of the decision permitting basic telephone operators to provide limited service mobility through the Wireless in Local Loop (WiLL) technology. While issuing notice to the various respondents, the Supreme Court scheduled the matter for further hearing on July 19. It declined the petitioners' plea for an interim stay on the provision of this service.
At issue is a Central government decision dating from March last year, upheld subsequently by the Telecom Disputes Settlement Appellate Tribunal (TDSAT). In submissions before the Tribunal, the COAI had taken the plea that the provision of limited mobility was contrary to the provisions of the National Telecom Policy of 1999 (NTP 99). The COAI said that fixed and mobile services were clearly demarcated in the policy framework and that the subsequent decision to permit limited mobility infringed upon their exclusive rights.
In rejecting this appeal, the TDSAT argued that courts and tribunals could not impede the government's right to frame policy, unless a violation of fundamental rights or the rule of law was proved. It also pointed out that all the licences that had been issued in the telecom sector contained the clause "whereby the terms and conditions of the licensees could be changed by the licensor". It implicitly chastised the COAI by upholding the primacy of the public interest: "The petitioner cannot say that the licences of the basic operators will continue unchanged till the expiry of the term of licence of the cellular operators."
It is easy to see why the COAI was on a losing wicket. Keeping in mind the prohibitive costs of expanding telecom coverage using traditional copper cables, the 1994 policy formulation specifically identified optical fibre and WiLL as the preferred technologies. This stipulation was governed as much by technical and financial necessity as by the demands of a deregulated and competitive environment for services. Subsequently, NTP 99 spoke of the need to keep pace with the convergence of different transmission media, noting specifically that the distinction between "wireline and wireless" technologies was rapidly being obliterated.
Since the mid-1990s, with the standardisation of various kinds of codes and protocols governing the transmission of signals from subscribers to exchanges, wireless transmission became a real possibility for basic telephony. The elimination of expensive copper wiring held out the promise that some of the glaring lacunae in the telecom network, particularly in rural areas, could reasonably be bridged.
A serious hurdle was the initial cost of providing the service. The limited mobility service uses the Code Division Multiple Access (CDMA) system rather than Groupe Speciale Mobile (GSM), which is the dominant worldwide standard. With volumes of production and availability being low, the cost of the terminal equipment installed on the subscribers' premises remained high. In 1999, the Telecom Regulatory Authority of India (TRAI) fixed a minimum monthly rental of Rs.450 on limited mobility equipment. This seemed then an unwarranted concession to the clout of the cellular lobby, which was insistent that a reasonable price differential should be maintained to ensure the continuing viability of their operations.
Ironically, this has now become another weapon in the COAI armoury. In its petition before the Supreme Court, the cellular operators have argued that the public interest claim, which was used to justify limited mobility services, is hollow. With monthly rentals being over Rs.450, they argued, it is virtually impossible for "rural and low income subscribers to afford WiLL mobility".
This last prop may soon be knocked out, since TRAI is currently engaged in a major tariff balancing exercise. Basic telephone operators have been demanding that the floor rental be dispensed with, since it is a restraint that only WiLL services are subject to. And with the cost of equipment having fallen substantially over the last three years, there is a strong possibility that the new rentals will put the service within the reach of the target subscribers.
This could be just the wake-up call that cellular operators need. D.K. Sangal, former Chairman of the Telecom Commission, estimates that the cost of providing a fresh cellular connection today is perhaps 50 per cent lower than the corresponding figure for a basic telephone. The higher tariffs levied on cellular services, in his estimation, are completely unjustified. Although the TRAI has the statutory authority to demand authentic cost figures from all operators, it has so far been baulked. Annual reports for most cellular operators remain outside public scrutiny and in submissions before the TRAI they have submitted wildly exaggerated cost figures to justify their high tariffs.
Yet when all the hype over rural telephony through WiLL is assessed against actual performance, the picture that emerges is dismal. According to the Estimates Committee of the Lok Sabha, none of the new basic telephone operators has come anywhere near fulfilling its commitment on rural connections. Of the total number of connections provided by the public sector Bharat Sanchar Nigam Ltd. (BSNL), a reasonable proportion of 20 per cent is in the rural areas. The newcomers, however, are in serious default on their commitments to provide at least 15 per cent of connections in the rural areas. The actual figure, the Estimates Committee points out, does not even approach 1 per cent. Even with the possibilities afforded by WiLL, certain other inducements may well be necessary to prompt the basic telephone operators to deliver on their social obligations.