Panel Discussion on

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Panel Discussion on Status of Dispute
Settlement Mechanism in the Telecom,
Broadcasting and Cable Sectors in India18th
December 2005

• Presentation by
• A.K. Sinha
• CMD BSNL

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Topics

• Present Business Scenario.
• Present Telecom Scenario.
• Potential Area of Dispute.
• Dispute Resolution Mechanism.
• Conclusions.

3
Present Business Scenario

• Free market orientation with liberalization of
  economy and relaxation of regulatory mechanism by
  governments
• Multiple Suppliers and Service Providers for
  different products and services
• Operators focusing on increase in market share.
• Margins under tremendous pressure for the Service
  Providers under all segments.

4
Present Business Scenario

• Economies of scale are driving down the cost to
  remain competitive.
• Bundling of services and products by Integrated
  Players and Globalization taking toll on
  standalone service providers leading to closure
  or merger/acquisition of such players.
• Vertical and Horizontal integration of business
  through mergers and acquisitions need of the
  hour.

5
Present Telecom Scenario

• Competitions started in 1994 for cellular
  services in the four Metros.
• Basic Services opened for competition in 1998.
• Cellular Services introduced in other States as
  well.
• National Telecom Policy in 1999 provided major
  thrust for private participation.
• National Long Distance Sector opened in 2001.
• International Long Distance Sector opened in 2002.

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Present Telecom Scenario

• With the new licensing policy, number of NLD/ILD
  operators may increase many fold leading to
  further cut throat competition.
• Lowering of entry fee for new NLD/ILD players
  would lead to disputes and litigation by existing
  operators for level playing field

7
Present Telecom Scenario

• Total Number of Operators 842
• Unified Access Service Providers 75
• Cellular Mobile Service Providers 63
• NLD Operators 4
• ILD Operators 6
• Others e.g. ISPs, IP-I/IP-II etc. 679
• Interconnection of these operators with 2647
  local area switches and 322 TAX switches of BSNL
  is extremely complex, time consuming and area of
  continuous disputes between operators and affects
  consumers as well.

8
Present Telecom Scenario

• Competition has led to rapid growth of services.
• There are about 116 million telephone consumers
  as on date.
• Monopolies are giving way to competition.
• Present legacy networks being challenged by the
  new networks.
• About 55 of the telecom market is controlled by
  private sector as on date.

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Present Telecom Scenario

• Evolving converged networks making it difficult
  to implement service specific regulatory regime
• - causing infringement on the rights of
  others.
• -complicating the dispute resolution
  mechanism.
• Stagnation in growth of conventional services and
  thinner margins leading to tress passing into the
  jurisdiction of one operator by other thus
  causing disputes.

10
Present Telecom Scenario

• Regulatory Boundaries of networks and licensed
  areas in the evolving scenario are becoming
  difficult to sustain.
• Rights and obligations of the licensees to
  undergo change with unification of licenses,
  which may lead to new disputes.

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Present Telecom Scenario

• Complexity and size of interconnection
  arrangements in increasing.
• Interconnection between operators may shift to IP
  in near future even for voice services thus
  complicating the regime further.
• Revenue sharing between operators, a major bone
  of contention. Shall further get complicated with
  IP networks.

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Present Telecom Scenario

• Provision of affordable Access to telecom
  service, the prime objective of NTP-99, is a
  matter of serious concern in the present cost
  based regime.
• New Telecom Policy to be announced is likely to
  further liberalize the sector and intensify the
  competition ushering in a new era of disputes.
• Digital Divide increasing due to competition
  concentrating in urban areas only.

13
Present Telecom Scenario

• Rural and Semi-urban areas need to grow faster
  for overall development of the economy and to
  drive the telecom growth further to achieve the
  desired teledensity target.
• Rural obligations under unified license have been
  done away with. Hence, policy to support rural
  telecommunication growth needs review.

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Potential Areas for Disputes

• Multiple Interconnection for Multiple services to
  increase the billing and settlement disputes
  between the operators.
• Multi-operator multi-location interconnection
  environment putting stress on the scare resources
  of the incumbent to provide infrastructure
  support to the competing networks, thus leading
  to disputes.

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Potential Areas for Disputes

• Convergence of services and technologies to
  further lead to more disputes.
• Reconciliation of traffic between Interconnecting
  operators becoming more and more complex and time
  consuming.

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Potential Areas for Disputes

• Regulatory information is becoming very
  complicated and expensive.
• Co-location of equipments of large number of
  operators in the premises of the incumbent is a
  bone of contention leading to disputes.

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Potential Areas for Disputes

• With Wireless services becoming prominent,
  allocation of adequate spectrum for various
  technologies is going to be the key issue.
• Effective utilization of the allocated Spectrum
  by the operators and its pricing shall be another
  area of disputes.
• Spectrum interference will give rise to new type
  of disputes and concerns.

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Potential Areas for Disputes

• Infringement of rights and obligations of one by
  other due to technological innovations.
• Deliberate violation of the licensing and
  regulatory framework by some operators.
• Bypass of Access Deficit Charges.

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Potential Areas for Disputes

• Manipulation of Numbering Plan and under
  declaration of traffic and revenues to bypass the
  ADC and License fees.
• To increase their market share, the operators are
  offering various tariff schemes which apparently
  look cheaper but are actually expensive.

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Potential Areas for Disputes

• Bill related complaints of customers increasing.
• High end customers are being looked after very
  well. The common man, however, is being ignored.
  
• Operators are adding more and more customers
  without expanding their network, quality of
  service is seriously compromised.

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Disputes Resolution Mechanism

• For the dispute resolution mechanism to be
  effective, it is desirable that it is not over
  loaded.
• Clarity and transparency in regulation minimizes
  the disputes and improves the efficiency of the
  system.

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Disputes Resolution Mechanism

• In-depth analysis of the issues at the thought
  process level itself goes a long way to make the
  dispute resolution mechanism more effective.
• An effective in house dispute resolution
  mechanism provided by the service providers
  themselves for redressal of consumer grievances
  reduces pressure on legal forums.

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Disputes Resolution Mechanism

• Historically, it was the civil courts and high
  courts who used to provide remedies to the
  consumers.
• On realizing that remedies through civil courts
  and high courts are becoming time consuming,
  expensive and onerous, Parliament came out with
  the concept of Consumer Forums.

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Disputes Resolution Mechanism

• It was expected that individual consumers would
  now get relief for their individual grievances by
  the setting up of consumer forums.
• They would be informal, easy to approach, faster
  and inexpensive.

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Disputes Resolution Mechanism

• However, due to rapid growth of services and
  consumers, the disputes increased and the
  Consumer Forums started getting clogged with
  over-work.
• They are becoming time consuming and expensive
  discouraging the consumers to have recourse to
  those remedies.

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Disputes Resolution Mechanism

• In the year 1997, the Telecom Regulatory
  Authority (TRAI) was constituted to regulate the
  growth in telecom sector and protect the interest
  of consumers.
• TRAI was empowered to adjudicate disputes between
  service providers and
• Other service providers.
• Licensor.
• Group of consumers.

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Disputes Resolution Mechanism

• By an amendment in TRAI Act in 2000, the
  adjudicatory powers of TRAI were vested in a
  Tribunal viz TDSAT. In addition, TDSAT was also
  empowered to hear and dispose of appeal against
  any direction, decision or order of TRAI.
• Governments initiative for amending the TRAI Act
  to separate dispute settlement mechanism from
  regulatory mechanism was a step in the right
  direction.

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Disputes Resolution Mechanism

• This significantly improved the quality and
  efficiency of dispute resolution process in spite
  of highly complicated techno-commercial issues
  involved.
• By the amendment dated 9.1.2004, the jurisdiction
  in relation to Broadcasting Cable Operations
  have also been included under the TRAI Act.

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Disputes Resolution Mechanism

• Thus, from January 2004 TRAI TDSAT are having
  the jurisdiction to also deal with Broadcasting
  and Cable Operation issues.
• TDSAT is doing extremely good work in resolving
  the disputes amongst the service providers and
  vis-à-vis TRAI and Licensor for healthy growth of
  the telecom sector and protection of the interest
  of consumers.

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Disputes Resolution by TDSAT
Year Case Filed Cases Disposed Disposal Cases Pending
2001 103 103 100.00 0
2002 93 88 94.62 5
2003 102 96 94.12 6
2004 247 203 82.19 44
2005 386 160 41.45 226
Total 931 650  69.81 281
Petitions, Appeals, review Petitions , MA,
Remands for SC
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Disputes Resolution Mechanism

• However, as per present provisions in the Act an
  individual consumer cannot approach Honble
  TDSAT for redressal of its specific grievance.
• An integrated and comprehensive dispute
  settlement mechanism to protect the interest of
  consumers is required to be put in place.

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Disputes Resolution Mechanism

• There is a need to avoid frequent changes in the
  regulatory and licensing policies as they have
  far reaching financial implications and adversely
  affect the planning and investment decisions of
  the stake holders.
• The regulatory policies must keep in view the
  public interest and ground realities including
  those of the legacy systems operating in the
  country and need not follow the path taken by
  other administrations.

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Disputes Resolution Mechanism

• Further, each service provider has to ensure
  that services are not deficient and are
  satisfactory.
• Each of service provider should, therefore, make
  available a suitable in house effective mechanism
  for redressal of consumer grievances.
• It is only on the failure of providing such an in
  house mechanism that consumer gets compelled to
  look for legal forums for redressal.

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Disputes Resolution Mechanism

• BSNL is having very effective in house mechanism
  for redressal of consumer grievances in the form
  of Telephone Adalats, Open house Sessions,
  Dispute Resolution Camps at SDCAs.
• These Telephone Adalats are held once in two
  months at SSA (District) level and once in three
  months in every Circle (State) level. Open house
  sessions are held regyularly at SSA/district
  Levels.
• Almost all the disputes of BSNLs consumers get
  settled in these Telephone Adalats.

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Disputes Resolution Mechanism

• The Telephone Advisory Committees (TAC) have been
  constituted in each SSA which also is a mechanism
  for dispute resolution of a group of customers.
• All the field officers are available for
  grievance redressal of the customers anytime.
• It needs no emphasis that transparency and speedy
  redressal has to continue as the hallmark of the
  system.

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Conclusion

• In view of the explosive growth and complex
  emerging scenario, an integrated and
  comprehensive dispute settlement mechanism to
  protect the interest of consumers is need of the
  hour.
• I, however, personally feel that if the
  regulatory frame-work is clear and transparent
  and the service providers themselves provide an
  effective in-house dispute resolution mechanism,
  it will go a long way in not only providing
  satisfactory consumer services but would
  strengthen the desired meaningful growth in these
  two strategic sectors. This will also reduce
  strain on TDSAT and other legal forums and make
  the entire Dispute Resolution mechanism very
  efficient and effective.

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Thank You