1. Panel Discussion on “Status of Dispute Settlement Mechanism in the Telecom, Broadcasting and Cable Sectors in India” 18 th December 2005 Presentation by A.K. Sinha CMD BSNL

2. 2 Topics Present Business Scenario. Present Telecom Scenario. Potential Area of Dispute. Dispute Resolution Mechanism. Conclusions.

3. 3 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. Present Business Scenario

4. 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. 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.

6. 6 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 Present Telecom Scenario

7. 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. 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.

9. 9 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. 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.

11. 11 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. Present Telecom Scenario…

12. 12 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. Present Telecom Scenario…

13. 13 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. Present Telecom Scenario…

14. 14 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. Potential Areas for Disputes

15. 15 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. Potential Areas for Disputes…

16. 16 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. Potential Areas for Disputes…

17. 17 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. Potential Areas for Disputes…

18. 18 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. Potential Areas for Disputes…

19. 19 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. Potential Areas for Disputes…

20. 20 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. Potential Areas for Disputes…

21. 21 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.

22. 22 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.

23. 23 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”.

24. 24 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.

25. 25 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.

26. 26 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.

27. 27 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. Government’s initiative for amending the TRAI Act to separate dispute settlement mechanism from regulatory mechanism was a step in the right direction.

28. 28 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.

29. 29 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.

30. 30 Disputes Resolution by TDSAT Year Case Filed* Cases Disposed % Disposal Cases Pending 2001103 100.000 2002938894.625 20031029694.126 200424720382.1944 200538616041.45226 Total931650 69.81281 * Petitions, Appeals, review Petitions, MA, Remands for SC

31. 31 Disputes Resolution Mechanism… However, as per present provisions in the Act an individual consumer cannot approach Hon’ble 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.

32. 32 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.

33. 33 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.

34. 34 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 BSNL’s consumers get settled in these Telephone Adalats.

35. 35 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. Disputes Resolution Mechanism…

36. 36 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.

37. 37 Thank You