After OK to RJio tariff, Trai consults on predatory pricing
Just nine months ago, the Supreme Court castigated the telecom regulator, Trai, while shooting down its recommendation to levy penalties on incumbent telecom operators for call drops. Since, Trai itself issued a technical paper on call-drops a month after recommending the penalties, and this explained why the telcos weren’t at fault for the call-drops, SC said ‘a legislatively pre-determined penalty, without fault or loss being established … (is) manifestly arbitrary and unreasonable’; it went on to say ‘(Trai) must respond in a reasoned manner to (comments) that raise significant problems, to explain how the agency resolved any significant problems raised by the comments, and to show how that resolution led the agency to the ultimate rule … including a rational connection between the facts it found and the choices it made’.
Some weeks ago, after Trai had recommended a R3,050 crore penalty on Bharti Airtel, Vodafone and Idea for not providing enough points of interconnection (PoI) to RJio, the Telecom Commission—India’s highest policy-making body for telecom—questioned its actions and asked how the penalty had been recommended since the incumbents were, under the law, entitled to provide the PoI within 90 days and all had complied—it also asked how Trai had calculated the PoI-congestion since the monthly average had to be used while the regulator only had data for a few days. Indeed, as FE had pointed out earlier, while Trai had been quick to recommend the penalty, it had later come out with a consultation paper—in October last year—which asked, among other questions, whether the existing 90-day period was too long for providing PoIs.
And now, after rejecting the incumbent telcos’ petition against RJio’s pricing—they had argued it was predatory, in violation of the law which stipulated a minimum tariff as well as the duration of promotional offers—Trai has come out with a consultation paper which, among other questions, asks ‘which tariffs should qualify as promotional offers’ and ‘what methods/processes should be applied by the Regulator to assess predatory pricing by a service provider’. FE has argued, in the past, that RJio’s pricing can be considered predatory since it has the largest share of the ‘relevant market’—of 4G data services—and now, after quoting extensively from competition law in its consultation paper, Trai has asked ‘what should be the different relevant markets … in telecom services?”. Apart from the fact that the regulatory process looks increasingly shaky with Trai being lambasted for not applying its mind to issues and by issuing consultation papers after it has already reached a conclusion, surely the regulator cannot be issuing a consultation paper on a matter where its decisions are being challenged at the TDSAT? Hopefully, when the appellate tribunal is hearing the incumbent telcos’ case against Trai, it won’t adjourn/dismiss the matter on grounds Trai is in the middle of a consultation on the issue anyway. Indeed, Trai’s new consultation paper should bolster the incumbents’ case before TDSAT since the regulator is asking for suggestions on precisely the issues they have raised.