Way cleared for MTNL cellular service

NEW DELHI, July 16: The Delhi High Court today delivered a judgement which whittles down considerably the powers of the Telecom Regulator...

NEW DELHI, July 16: The Delhi High Court today delivered a judgement which whittles down considerably the powers of the Telecom Regulatory Authority of India TRAI. The 51-page ruling, delivered by Justice Usha Mehra, essentially, restores the powers of the Department of Telecommunications DoT vis-a-vis the TRAI which had been arguing that the DoT could not grant/alter any telecom licenses without the TRAI8217;s approval.

Immediately, this clears the way for allowing the private sector players in Internet services 8212; the TRAI had rejected the DoT proposal to issue Internet licenses, saying that it had not sought recommendations from the TRAI before announcing the New Internet policy. It also means that the state-owned Mahanagar Telephone Nigam Limited MTNL will be able to enter the cellular services sector in competition with existing private players. The DoT had granted MTNL a license to operate in Delhi and Mumbai last October, but this was struck down by the TRAI after private players appealed againstMTNL entering the business on the grounds that the 8220;need and timing8221; for introducing a new operator in the market would have to be recommended by the TRAI.

Today8217;s judgement will also make it easier for the DoT to encash the bank guarantees of private telecom players who have not implemented their license conditions 8212; that is, those who have either not paid their license fees, or have not begun setting up their networks. In most cases of encashment, private operators have petitioned the TRAI which had stayed the DoT from proceeding on encashments, till cleared by the Authority. While delivering her ruling, Justice Usha Mehra said, 8220;the Authority fell in error in concluding that the power of the government to grant or amend the licence is subject to the recommendations of the TRAI or that these recommendations are mandatory in nature.8221;

Commenting on the judgement, Communications Minister Sushma Swaraj said that the 8220;grey areas in the TRAI had been resolved by today8217;s judgement.8221; Minister of Statefor Communications Kabindra Purukayastha said that the judegment had upheld the government8217;s role as a licensor. At the same time, he said, that the government fully appreciated the concerns of the private telecom industry and would not misuse its position as a licensor against private players.

Private cellular operators were very dejected with today8217;s ruling, and may be planning to go in for an appeal. T V Ramachandran, vice chairman of the Cellular Operators Association of India COAI said that 8220;the industry was deeply disappointed with today8217;s judgement which have an adverse impact on the future investments in the country.8221;

The TRAI had restrained the DoT from selling and processing the forms for granting licences to private parties for operating the Internet services.However, Justice Mehra in an interim order in April had given a go-ahead to the DoT to sell the application forms to private parties for the Internet service providers.

The high court today made it clear that the dispute regardingthe grant or to amend the licence by the licensor was not a dispute covered under the provisions of section 14 2 of general clauses act. 8220;These are not the disputes which can be adjudicated by the authority,8221; the judge said.

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8220;Having held that the question of grant or amendment of licence by the licensor does not fall within the jurisdiction of the TRAI,8217;I have no hesitation to hold that the impugned order of TRAI suffers from legal infirmities,8221; Justice Mehra said.

In the process, the judge allowed the DoT to go ahead with the granting of licences for Internet service providers.