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CCI’s telco probe exposes regulatory faultlines PDF Print E-mail
Monday, 15 May 2017 06:04
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When there is a sectoral regulator already dealing with issue, Competition Commission can’t start separate probe

Even at the time it was set up in 2003, it was never clear what the Competition Commission of India (CCI) would do in areas where there was already a sectoral regulator, and if it was higher in the regulatory hierarchy. So, if both a sectoral regulator and CCI gave a different verdict on the same case, whose order was to be implemented? It was always a tricky question since, while the sectoral regulator had expertise in the area, CCI had better knowledge of competition issues like abuse of dominance and collusion, both explicit as well as implicit. In its wisdom, the government did not clarify the issue and left it to the regulators to work out a solution.

Till now, such a conflict has never arisen but, in the fight between RJio and the incumbent telcos like Bharti Airtel, Vodafone and Idea, it has come to the fore. While RJio complained to Trai on the incumbents using their dominant positions to deny it points of interconnection (PoI)—critical if its subscribers were to call people on other networks or get calls from them—it made a more or less similar submission to CCI. On their part, the incumbents complained to Trai saying RJio’s pricing was predatory and, as a result, its traffic asymmetric and huge—the Bharti Airtel plea before CCI also raised the issue of predatory pricing.

With CCI now ordering a probe into the RJio complaint, what happens now? Trai had recommended a penalty of Rs 3,050 crore on Airtel, Vodafone and Idea for denying RJio the necessary PoIs, but when the matter went to India’s highest telecom policy body, the Telecom Commission, it asked Trai for many clarifications, including a justification for imposing the penalty when, under the law, telcos were allowed up to 90 days to provide the PoI and had not breached this limit—Trai has yet to get back to the Telecom Commission with a reply. Ironically, after recommending the penalty, Trai came out with a consultation paper that, among others, asked whether the 90-day period for providing PoI was too long.

With Trai dismissing the incumbent telcos’ pleas on predatory pricing and RJio’s promotional offer lasting beyond the 90-days allowed under the law, Airtel and Idea went in appeal to TDSAT while Vodafone went to the Delhi High Court since, at that point, TDSAT did not have a head and it felt a hearing would get delayed. So, if CCI finds that there is a prima facie case of abuse of dominance—it has not yet acted upon the Airtel allegations—and decides to hold hearings and finally reaches a conclusion, will its judgment be binding or will it be the Telecom Commission’s, assuming that by then, Trai gives its replies to the Commission? Matters will get more complicated if, by then, the TDSAT also comes to a view on the issues raised before it by the incumbent telcos. The issue of predatory pricing is related to the issue of PoIs—if RJio’s pricing is not predatory, then the issue raised by incumbents of too much, and asymmetric, traffic from RJio become irrelevant. As such, the cases before CCI and TDSAT are closely related. While doing a rejig of the regulatory system in March, the government should have addressed this obvious overlap.

 

 

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