TRAI Recommendations: Are They Binding on the DOT?

1. What is TRAI?

The Telecom Regulatory Authority of India (“TRAI”) is established and governed by the Telecom Regulatory Authority of India Act, 1997 (“Act”) to regulate telecom services, including fixation/revision of tariffs for telecom services, in India. In words of the Hon’ble Supreme Court of India in Competition Commission of India vs Bharti Airtel Limited and Ors[1],“TRAI was, thus, constituted for orderly and healthy growth of telecommunication infrastructure apart from protection of consumer interest. It was assigned duty to achieve universal service which should be of world standard quality on one hand and also to ensure that it was provided to customers at a reasonable price, on other hand.”

2. Functions of TRAI

Chapter III of the Act sets out the powers and the functions of TRAI. These functions broadly include:

• making recommendations on various issues;
   
• general administrative and regulatory functions;
   
• fixing tariffs and rates for telecom services; and
   
• any other functions entrusted by the Central Government

3. Who is the DOT?

The department of telecommunications, set up under the Ministry of Communications, is a department of Government of India (“DOT”). The recommendations provided by TRAI to DOT are reviewed by a commission set up by the DOT, called the Digital Communications Commission (“DCC”).

4. Recommendations by TRAI & Their Non-Binding Nature

As per Section 11 of the Act, TRAI is empowered to make recommendations to the Central Government and discharge certain functions either suo moto or on a request from a licensor[2]. Such recommendations, however, are not binding on the Central Government[3]. TRAI may also request the Central Government to furnish information or documents for the purposes of making recommendations. Further, as per Section 13 of the Act, TRAI may issue directions from time to time to the service providers[4] with respect to the performance of the functions set out in Section 11(1)(b) of the Act.

Some instances of recommendations being made by TRAI and how they have been received by the DOT have been outlined below:

• Recommendations on auction of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz, 3400-3600 MHz bands: On August 19, 2017, DOT requested TRAI for recommendations regarding the auction of spectrum in certain bands, and pursuant to such request, TRAI provided recommendations to the DOT on August 01, 2018. On July 01, 2019, the DCC responded to this recommendation, and stated that “on some of the issues, a need to seek clarification / reconsidered recommendations is felt”. Accordingly, some recommendations were referred back to TRAI for such clarification / reconsideration. On July 08, 2019, TRAI issued their para-wise response to the clarifications sought by the DCC.
   
• Net Neutrality: Certain recommendations made by TRAI have been accepted by the DOT, such as the recommendations on net neutrality. Through a letter dated November 27, 2017, the DOT accepted the recommendations and informed TRAI to issue regulations with respect to these recommendations[5].
   
• Fines: On October 21, 2016, TRAI recommended to the DOT for the imposition of a fine of INR 30.5 billion to be levied on Bharti Airtel and Vodafone Idea. On April 05, 2017, DCC responded to TRAI and asked them to reconsider the grounds on which the fine was being imposed. On May 24, 2017, TRAI responded to the DCC and refused all their responses and maintained the stand of their recommendation. Earlier this year, an inter-ministerial committee of the DOT rejected the TRAI recommendation. However, in July 2019 it was reported[6] that DCC has accepted TRAI’s decision to levy the penalty.
   
• Unified Licensing: In Idea Cellular Limited vs. Centre for Public Interest Litigation and Ors[7], TRAI had made certain recommendations with respect to unified licensing[8], which were approved by the DOT. The Supreme Court found fault with TRAI’s recommendations and stated “While it cannot be denied that TRAI is an expert body assigned with important functions under the 1997 Act, it cannot make recommendations overlooking the basic constitutional postulates and established principles and make recommendations which would deny people from participating in the distribution of national wealth and benefit a handful of persons”. As such, TRAI was ordered to make fresh recommendations in this case.

To conclude, while TRAI has the power to make recommendations to the DOT, the DOT has the ultimate decision making power with respect to such recommendations and whether they shall be implemented or not. However, this added layer of regulation by TRAI in the telecom industry is essential as it provides increased transparency and offers multiple perspectives.

The views and opinions expressed in this article belong solely to the author and do not reflect the position of TLH, Advocates & Solicitors.
[1] Civil Appeal Number 11843 of 2018

[2] Section 2 (ea) of the Telecom Regulatory Authority of India Act, 1997 states that a “licensor” means the Central Government or the telegraph authority who grants a licence under Section 4 of the Indian Telegraph Act, 1885

[3] Proviso 1 of Section 11 (d) of the Telecom Regulatory Authority of India Act, 1997

[4] Section 2 (j) of the Telecom Regulatory Authority of India Act, 1997 states that "service provider" means the government as a service provider and includes a licensee.

[5] Section 36 of the Telecom Regulatory Authority of India Act, 1997

[6] https://www.business-standard.com/article/companies/govt-approves-rs-3-050-cr-fine-on-airtel-voda-idea-    telcos-may-move-court-119072500077_1.html

[7] W.P. (C) Number 423/2010

[8] TRAI recommended the allocation of 2G spectrum on the basis of 2001 price and overlooking one of the main objectives of the National Telecom Policy (NTP) 1999 that spectrum should be utilized efficiently, economically, rationally and optimally with a transparent process of allocation.