Communication Convergence Bill: A New Order or just a Smokescreen?

The Communication Convergence Bill is expected to become an act soon. Once enforced, the act will provide a single regulatory framework for telecommunication, Internet and broadcasting services. It will also make India the second country in the world after Malaysia, to have an act regulating the convergence of different media technologies and business.

Convergence recognized

The single most important consequence of the enforcement of the act will be the establishment of a Communication Commission of India (CCI). The CCI will be the single authority regulating the carriage and content of communication in the area of telecommunications, Internet and broadcasting. This is significant given the fact that under the current system all the three areas are being regulated by different bodies or ministries, primarily the Department of Telecom (DoT), the Telecom Regulatory Authority of India (TRAI) and the Ministry of Information and Broadcasting. Moreover, all these are governed by different sets of laws and regulations.

The new regulator, though not a too powerful and independent body, will certainly have more powers and functions than the TRAI, the present regulatory body for telecom. Unlike the TRAI, the CCI will have the power to issue licenses to service providers as also allocate and manage wireless spectrum. Currently, while the licensing functions are vested with the DoT, the Wireless Planning and Coordination wing looks after spectrum management. The only significant function vested with the TRAI is that of determining tariff.

The CCI has also been assigned the task to regulate or curtail the harmful and illegal content on the Internet and other communications services. Interestingly, it will also formulate and lay down program and advertising codes in respect of content application services. An important clause in the bill is one dealing with copyright issues. Section 28 sub-section 2b(i) of the bill requires the service provider of a content application service, to ensure that no program forming part of its services infringes on any copyright. This clause is expected to provide relief to people who are at the receiving end of copyright violations, especially by cable TV networks.

The CCI will also have complaints redressal and dispute resolution functions. The section 22 of the bill says that the CCI shall decide any dispute or matter between two or more service providers on issues relating to spectrum interference, interconnectivity, denial of fair access and practices of fair competition. Besides, the commission will also decide any dispute or matter between a service provider and a group of companies, and a dispute or matter arising out of the enforcement of any provisions of the act. For this, the CCI has been vested with the same powers as with a civil court under the Code of Civil Procedure, 1908.

And, if any person is aggrieved by any decision or order of the CCI, he or she can go to the Communications Appellate Tribunal, provision for which has been made in section 43 of the bill.

Once the bill becomes an act, it will lead to the repeal of quite a few acts including acts from the British era, the Indian Telegraph Act of 1885, and the Indian Wireless Telegraphy Act of 1933. Interestingly, these two were the major acts governing telecom in India until the enactment of the TRAI Act in 1997. The TRAI Act will go once the Communication Convergence Act comes into force. Among other acts, the Cable Television Network (regulation) Act of 1995 will also become history.

But...

Even though the bill is supposed to take care of the fast changing dynamics of the business and technology of telecommunications, Internet and broadcasting services, almost all its clauses have been left unexplained, leaving a wide scope for ambiguity. For example, Clause 3, which relates to the prohibition of use of any part of spectrum without assignment, can be easily interpreted to mean that the spectrum for the microwave oven in the kitchen would need approval from the CCI! Similar is the case with Section 20, Sub-section 2(x), which states that the CCI will regulate or curtail the harmful and illegal content on the Internet and other communication services. It would have been better had the bill clearly explained what "harmful" and "illegal" means. While what is illegal would not be much difficult to define, harmful is a very subjective term and could mean different things to different people.

Besides, the bill does not explain how the CCI will achieve its objectives and enforce guidelines in the absence of supplementary powers to implement those objectives. After all, the bill nowhere says that CCI's authority would be final. Given this, it is anybody's guess as to how the CCI is going to achieve such objectives as equitable, non-discriminatory interconnection across various networks or the introduction of new technologies (Section 19), in the absence of powers to independently take decisions on matters that could lead to the achievement of such objectives.

CCI: Independent or Subservient?

You need not do a careful and in-depth analysis of the Draft Bill to arrive at the conclusion that the only significant provision (besides bringing telecom, Internet and broadcasting under one regulatory domain) made in it is the creation of the Communication Commission of India. Otherwise, the bill is just a copy of the TRAI Act with a few additions with respect to Internet and broadcasting services. The act does not ensure independence and autonomy of the CCI. While the Draft Bill clearly says that the CCI will have to follow the directives of the central government with regard to its licensing and regulatory functions as also other matters (Section 23, sub-sections 1,2,3&4). It is unclear on the kind of relationship that the CCI will have with the DoT or the ministry of I&B mandarins.

It appears from the above-mentioned clauses of the bill, that very much like the TRAI, the CCI too, will be subservient to the ministries concerned. This is because, while the policy-making functions will remain with the government, the CCI can only request the government to review any policy.

As such a number of issues which, for example, had earlier got entangled in the TRAI-DoT mismatch, are unlikely to be resolved soon, even after the Act comes into force. For instance, the most pressing issue facing service providers here in India is that of interconnection between different networks. There have been instances in the past where the TRAI recommendations in this regard have been turned down by the DoT. "If the act does not clearly recognize the new commission's powers in this regard, I do not think the new act is any different from the TRAI Act," remarks Ashok Juneja, CEO, Bharti Broadband Networks Limited.

The same limitation would apply to its other important function-that of determining tariffs. The bill nowhere says that the commission's decision on matters related to tariffs will be final. The government, it appears, will again have a final say in tariff matters as well.

Moreover, with the union government controlling the composition and removal of the chairman tightly, it would be too idealistic to expect the CCI to enjoy the kind of functional autonomy that would be needed in a developing market like India, which has been bogged by disputes since the beginning of the telecom reforms. The Nariman Report had recommended a tougher regime for the removal of commission chairman and members but the bill gives enough power to the government to remove them at its will. Besides, the clause relating to the appointment of chairperson and members, leaves enough scope for the bureaucratic establishment to manipulate appointments to the commission.

Who rules spectrum?

The CCI's spectrum management functions too, have been limited by the fact that a Spectrum Management Committee outside the purview of the commission will be created under the Section 24 (2) of the bill by the central government. The bill clearly says that the commission will carry out management, planning and monitoring of the spectrum for non-strategic or commercial usage subject to the provision of the Section 24 (1). It appears from the sub-sections of Section 24 and 25 dealing with spectrum management, that the Spectrum Management Committee would be the super authority managing spectrum. The commission will notify schemes for assignment and assign spectrum only after the committee has taken a decision. This means that the Wireless Planning and Coordination wing stays, but by another name.

Fair trade rules

Though the bill proposes that the CCI should ensure that the grant of licenses will not eliminate competition by making one of more service providers dominant, it is not clear whether the commission will proactively take on unfair market dominance by one or more service providers. There is no provision in the bill, which requires the CCI to act against anti-competitive practices on its own, on the basis of its own knowledge and information. It appears that any move against monopolistic and anti-competitive practices has to be a reactive step and may end up in long legal battles. In the US, FCC approval is a must for the merger of service providers.

It would have been better had the CCI been vested with powers to prevent even anticipated misuse. Even though there is no guarantee that proactive measures would not result in legal battles, it would be far better recourse than a reactive step. This is because it would be very difficult for a regulator to restore fair competition once the damage has been done. For example, what happens if one or more service providers have already been packed off the market by one or a group of operators using their significant market power? In such a situation, not only will the consumer be left with less number of choices, service providers locked out could face practical problems in re-entering the market.

The bill also does not have proper guidelines against the anti-competitive behavior of existing players with significant market power, for example, BSNL and MTNL. Matters of law and regulations are often subject to open-ended interpretation. And the Communication Convergence Bill is no exception. The point, however, here is that laws and regulations should be directed at providing solutions to existing problems, and ensuring the creation of a framework that is flexible enough to take care of future developments, keeping in mind the interests of all sections of its target. As such, it would have been better had the bill dealt in detail with each and every aspect of the sectors under its purview.

Ravi Shekhar Pandey

Source: www.voicendata.com