Telecom tangle

Three ongoing high-pitched battles over the telecom regulator, spectrum and interconnection have India8217;s telecom network in a bind. But...

Three ongoing high-pitched battles over the telecom regulator, spectrum and interconnection have India8217;s telecom network in a bind. But from a bird8217;s eye view of international commitments, India is still on top of rivals in the race to attract FDI in telecom.

Going by India8217;s stated position in the negotiation process under the General Agreement on Trade in Services GATS, internal telecom policies out-ran international commitments back in 2000. This is true for spectrum allocation, regulatory impartiality and interconnection, as per commitments India has agreed to make under the WTO Reference Paper on the Basic Telecom Agreement, 1997.

For instance, India did not commit to making interconnection non-discriminatory, timely, cost-oriented or unbundled. It also did not commit to make interconnection procedures public or transparent, or to have an 8216;independent8217; dispute settlement body.

However, today, interconnection is mandatory, charges are cost-based and all operators are permitted to levy it 8212; in line with the WTO Reference Paper. On spectrum, another hotly-debated issue, India did not commit to make allocation 8216;transparent8217; or 8216;non-discriminatory8217; until this year. However, allocated frequency bands were made public back in 2001, by the Department of Telecom. 8216;8216;In fact, India has autonomously beaten commitments to the WTO, bringing in changes because of domestic compulsions rather than a heavy external hand,8217;8217; says a telecom analyst.

Similarly, as per the revised offer on telecom, India is ready to commit to 49 per cent FDI in telecom, though domestically, it is all set to approve 74 per cent FDI.

The Reference Paper gives signatory nations a road map to ensure that free trade principles are not undermined by domestic regulations.

In fact, the only issue where India lags relates to the telecom regulator. Some analysts even feel that the Bangladesh Telecommunications Regulatory Commission BTRC and Pakistan Telecommunication Authority PTA have more independence and a higher legal stature than the Telecom Regulatory Authority of India Trai.

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Initially, India did not commit that the regulator will be separate from and not accountable to any service provider. In the latest offer, in December 2003, India did state that the regulator will be separate from and not accountable to any service supplier. However, it has still not committed that the regulator will be an 8216;independent8217; one.

8216;8216;The current issues the regulator is facing are significant, but they won8217;t necessarily mean that financial investors will be deterred from coming to India,8217;8217; says another telecom analyst.