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July 17, 1997


The Empire strikes back

DoT contests TRAI's right to arbitrate on licensing

The deteriorating relationship between the Department of Telecommunications and the Telecom Regulatory Authority of India has sunk to a new low with DoT challenging in the Delhi high court the regulator's right to arbitrate on telecom service licensing issues. This is the first time that DoT has challenged a TRAI order in court.

In a related development that reflected the souring relations between the two, the three-member TRAI has warned that the property of DoT could be attached for non-implementation of its April 25 order quashing the increase in fixed-to-cellular calls tariffs.

TRAI Chairman S S Sodhi said that under Sections 20 and 29 of the TRAI Act, which mandate a fine "which may extend to Rs 200,000 every day during which the default continues", the property of DoT could be attached and the top DoT officials fined for non-implementation of the April 25 order.

DoT's writ petition in the Delhi high court contests the May 27 ruling of TRAI that the arbitration clause in license agreements did not prevent licensee companies from invoking the jurisdiction of the regulator.

This was based on TRAI's interpretation of Section 11(1) and Section 14(2) of the TRAI Act, 1997.

The May 27 ruling was passed in response to petitions filed by Gujarat cellular licensee Fascel Limited and paging services operator Modi Korea Telecom. Both the companies had sought a postponement in the payment of license fees because they claimed that DoT was responsible for delays in clearing frequencies and providing interconnect links; this, in turn, had delayed the start of their commercial operations.

The DoT brass have defended their stand on the issue. "These cases relate to the license fee, which has to be paid by the operator for the right to enter an area which is a state function by stature. What the operator does after getting the license, whether he does business or not, is a different issue. DoT must be paid for the licence. If the licensee faces problems in starting its service, there are different forums to address them," a senior DoT official said.

At the hearing, TRAI also rejected a DoT plea for a joint hearing of the two cases of non-implementation of the April 25 order and a 'review petition' seeking the regulator's view on fixed-to-cellular call tariffs. TRAI Vice-Chairperson B K Zutshi said the "two independent issues will not be combined".

The TRAI has adjourned to August 13 the hearing of a JT Mobile petition requesting deferment of the deadline for payment of the second instalment of licence fees.

The cellular licensee for Andhra Pradesh, Karnataka and Punjab said its business plans were upset because of DoT's order raising fixed-to-cellular call tariffs, which had prompted financial institutions to reject the company's loan proposal.

- Compiled from the Indian media

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