Efficacy of Regulatory adjudication

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Efficacy of Regulatory adjudication Presentation
by Madhav Joshi Tata Teleservices Limited
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Telecom sector - present scenario

• The present-day global telecom sector is
  characterized by
•    simultaneous existence of state and private
  owned multiple
• operators
•     fast changing technologies, convergence of
  ideas, services
• and markets
•     liberalized and customer oriented regulatory
  regimes.
• subscribers wanting Value Added Services
  using IP, wireless
• and broadband technologies rather than
  Plain Old Telephony
• Service(POTS)
• countries wanting to attract private
  investment by providing
• favourable investment climate.

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Dispute Resolution why so important ?

• Investors
• Telecom sector needs huge capital investments.
• Investors need assurance about quick, fair and
  effective
• disputes resolution mechanism.
• Subscribers
• need new services at lower tariffs
• delays in dispute resolution would deny them this
  benefit.
• Economy
• Slower growth of telecom sector would retard
  general economic
• and technical development of the
  country.
• In order to avoid disruptions and delays in the
  development of telecom
• markets, disputes need to be resolved
  expeditiously.

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Dispute Resolution -importance

• Successful dispute resolution
• facilitates investment climate, stimulates growth
  and is of prime
• importance to developing countries targeting
  higher
• teledensities and even spread of telecom
  across all the regions.
• is increasingly important for introducing
  competition.
• should be as speedy as the networks and
  technologies they
• serve.
• Official dispute resolution mechanisms are
  important as a basic
• guarantee that sector policy will be implemented.

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Disputes Resolution Techniques

• Regulatory
• Handled by Regulators appointed under
  statute,review within the regulatory
  organization followed by appeals to hierarchy of
  Courts.
• Non-Regulatory
• i.e.Alternative Disputes Resolution (ADR)
• Less official means of dispute resolution
  I.e.negotiation, mediation and arbitration.
• Awards are subject to limited review by Courts on
  procedural grounds like scope.
• Countries vary in their stage of market
  development, regulatory approaches, dispute
• resolution and general business cultures, and
  in the types of disputes that commonly
• arise.
• These factors will result in different
  experiences with regulatory adjudication,
• arbitration,mediation, negotiation, ombudsmen
  schemes and other approaches

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Regulatory adjudication- advantages

• Has the advantage of finality and official
  enforcement
• mechanisms. Formal Structure is defined.
•  
• decision-makers have to follow set procedures and
  
• precedents .They are accountable to state or
  parliament.
• Decisions and establishment commands respect,
  reflects
• authenticity .
•  
• Unless arbitrary and capricious the courts
  respect regulatory
• tribunal decisions.

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Disadvantages of Regulatory adjudication

• Time consuming
• Inappropriate if the disputes revolves around
  some sensitive
• information .It may not remain confidential.
• Regulator may be exposed to competitive or
  political
• pressures, Public opinions.
• Regulator may lack necessary economic, legal and
  financial
• expertise to resolve disputes efficiently and
  with adequate
• finality.
• high costs and delays in some jurisdictions and a
  perceived
• lack of telecom-specific expertise to deal
  with many
• complex industry disputes.
• If the review is by political minister, and the
  government also
• holds an ownership stake in one of the parties
  to a dispute then
• bias can creep in.

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DR in some countries - France

• ART -independent administrative authority
  performs
• regulatory,consultative and dispute settlement
  and conciliatory
• functions.
• It can rule on disputes between operators,impose
  sanctions for
• non-compliance of legislations and
  regulations.
• It may suspend/withdraw licenses,impose penalty
  up to 5 of
• turnover.
• EU directive to settle cases in 4-6 months.
• Appeal to ordinary courts (contractual matters)
  or
• Administrative Courts which deal with
  sanctioning powers
• granted to ART.
• Court decisions can be appealed against by
  parties to dispute.
• ART cant appeal but is heard.
• Minister of industry also shares some powers with
  ART i.e. to
• issue licences.

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DR in some countries - Germany

• Reg TP is responsible for licensing,USO,frequency
  allocation,
• tariffs regulation,checking anti-competitive
  behaviour of
• dominant operators, interconnection disputes
• and consumer protection matters.
• It can initiate proceedings
• of its own on USO, tariffs, anti-competitive
  behaviour.
• on a motion in matters like granting of
  licences,
• interconnection, assignment of numbers and
  frequencies.
• Decision can be appealed in administrative court
  which has
• expertise.
• The regulatory decisions are slow.
• In proposed amendment to Telecommunication
  Act,appeal on
• Admin. Court decision would lie to Federal
  Admin court -only on
• law point.

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DR in some countries- USA

• FCC is the regulator.It interprets,co-ordinates
  and adjudicates on
• policy issues and disputes arising from them.
• FCC provides parties with a choice of ADR
  procedures as
• mandated under the Telecommunications Act of
  1996.
• No separate appellate mechanism for telecom.
• FCC generally takes pro-consumer,anti-monopolistic
  stance in
• regulatory and dispute resolution functions.
• There is a provision of final decision to be
  given by a
• commissioner
• or panel of commissioners.It also admits
  review petitions.
• The decisions can be appealed in US Court of
  Appeal.
• Many of FCC orders are subject to review in
  Federal
• Courts.
• Unless arbitrary and capricious the courts
  generally dont
• interfere in regulatory decisions.

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Innovative Indian Structure

• India has perhaps a unique model since year
  2000
• regulatory functions are vested with the telecom
  regulator
• Telecom Regulatory Authority of India(TRAI),
• policy and licensing functions are retained by
  the union
• Governments wing Department of
  Telecommunications (DoT)
• and
• the adjudication function has been vested with a
  specialized high
• powered tribunal Telecom Disputes Settlement
  Appellate
• Tribunal (TDSAT).

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TDSAT-a one stop solution !

• Jurisdiction of civil courts has been ousted and
  for all telecom
• related disputes the jurisdiction has been
  vested only with TDSAT
• TDSAT has the following powers i.e. to
• (a) adjudicate any dispute
• (i) between a licensor and a licensee
• (ii) between two or more service
  providers
• (iii) between a service provider and a
  group of consumers
• (b) hear and dispose of appeal against any
  direction, decision or
• order of the Telecom Regulatory
  Authority of India.
• Does not hear restrictive and monopolistic
  practices issues and
• individual consumer complaints.
•  

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TDSAT it is different !

• It has wide original and appellate jurisdiction.
• As the only telecom adjudicator,it hears
  questions of facts and law.
• It blends law,commerce and technology.
• Chairperson - serving or retired judge of Supreme
  Court
• or Chief justice of a High Court.
• Two members - well versed with technology,
  telecommunication,
• industry, commerce or administration or Secretary
  to Union of India
• for 2 years minimum.
• It can regulate its own procedures.
• Appeal lies only to the highest court I.e.Supreme
  Court of India.

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TDSAT overcomes disadvantages of Regulatory
adjudication.

• It has gathered required expertise.
• Very few matters are pending.
• It passed orders on interconnection
  issues,license agreement
• interpretation,pricing,jurisdictional
  issues,policy interpretation,
• level playing field.
• Very few decisions were appealed to Supreme
  Court.
• No reversal.One case was remanded for review.
• Even complex matters like challenge to limited
  mobility service
• reached finality in less than 3 years,
  despite appeal to Supreme
• court.

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Ombudsman

• In many countries office of Ombudsman has been
  established
• as a forum for resolution of disputes under a
  statute.
• Australia
• TIO appointed in 93, independent of industry,
  Consumer
• Organizations Govt.
• Fee charged per complaint.It acts as incentive to
  operators
• Operator gets reasonable time before TIO admits
  complaint.
• Power to make decisions up to 10,000.
• PrerequisitesComplaint within 12 months,no
  pending legal
• proceedings,complaint is within TIO
  jurisdiction.
• Covers all telephone, internet access
  services,pay-phones,
• delays in connections,fault repairs,privacy,bre
  ach of
• Customer Service guarantee and industry codes.
• No jurisdiction - competition issues, tariff
  setting, internet content.

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Economics of dispute resolution

• In evaluating the success of dispute resolution
  processes, it is
• important to consider economic costs to the
  sector as a whole.
• Costs may result from delays and lack of
  transparency and
• predictability.
• emergence of a market for dispute resolution
  techniques
• and professionals is likely to improve them.
• Some regulators are providing parties with a
  choice of ADR
• procedures. See -United States, the
  Telecommunications Act of
• 1996.
• It is important to design economic incentives for
  the parties to
• disputes.
• The allocation of responsibility for the costs of
  disputes can
• affect the manner in which parties behave.

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Market power asymmetries decide choice of DR
method

• Comparative levels of parties market power may
  decide type of
• dispute resolution.
• ADR techniques may help where disputing parties
  have similar
• levels of market power, where parties are
  more likely to negotiate
• solutions that meet their mutual on-going
  commercial interests.
• Regulatory intervention is considered necessary
  where one party
• effectively requires the protection from abuse
  by the other.

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Improving telecom dispute resolution-ITU
suggestions.

• Publish adjudicator decisions and facilitate
  access to them
• through the Internet.
• Adopt international best practices in resolving
  disputes.
• Publish and organize precedents of innovative
  dispute resolution
• procedures, in order to promote their
  adoption.
• Strengthen non-official ADR approaches by
  endorsing their
• usage and supporting them with official
  enforcement of their
• results.
• Tap into the human resources available to dispute
  resolution by
• establishing panels of arbitrators and
  mediators and collaborating
• with existing arbitration and mediation
  institutions.
• Increase cross-pollination of ideas and collegial
  sharing of
• experiences between the telecom sector and the
  dispute resolution
• communities.

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Improving telecom dispute resolution-contd.

• Harness new on-line resources and services to
  help policy
• makers and regulators to improve dispute
  resolution
• techniques.
• (ITUs on- line Global Regulators Exchange and
  live virtual
• conferencing facilities).
• Recognize that dispute prevention is as important
  as dispute
• resolution.
• Use of consensus building measures by policy
  makers and
• regulators can engage sectoral parties and
  identify converging
• interests and mutual commercial
  opportunities.

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ACKNOWLEDGEMENTS
References ITU paper of December, 2003 Papers
by Mr. R.U. S.Prasad, former Member,TDSAT