Surely Trai has enough experts to be trusted?
On the face of it, the Telecom Commission hasn’t really rejected the telecom regulator’s (Trai) recommendations on lowering the reserve price for spectrum auctions, it has merely asked for some more clarity. So it has asked Trai to explain how it came to its conclusions that a 60% reduction in the earlier base price of R18,000 crore for a 5MHz pan-India slot was arrived at. It has asked Trai to consider whether its proposal to levy a flat 3% spectrum usage charge on spectrum bought through auctions was legally tenable … It is true this is not as bad as the telecom ministry’s 9-member panel telling Trai that its formula was incorrect, but the impact is really the same. Delay, delay, delay.
The next meeting of the Telecom Commission, the telecom secretary has said will be on October 29. While he has said a final decision would then be taken based on what reply Trai sends, there is no guarantee of this either. After all, if Trai sticks to its calculations, how can we be certain the Telecom Commission will simply accept it in the manner the President has to sign an ordinance if the government sends it to him a second time?
The larger question that needs asking is what the government thinks the Trai is there for and how competent it is at its job. If, as in the case of a child, its calculations have to be checked by someone else and methodology doubted, it is best to wind up the body or at least reconstitute it. And, in any case, as has been pointed out ad nauseam, the Trai is fixing the minimum price for an auction, not the ceiling price—in the case of the 3G auction, the price got was many times the base price, such was the demand. Since there is no model that can possibly be acceptable to everyone, there is every likelihood the Trai’s calculations will be rejected by someone or the other, indeed chances are the recommendation will go to a group of ministers after the Telecom Commission approves it, perhaps even the Cabinet. In an ideal situation, once a regulator, whether it is Trai or CERC in the case of power, makes a recommendation, this should be accepted immediately—this requires a change in the law, and the sooner this is done the better. After that, the telecom ministry’s job should be restricted to just ensuring the auction is conducted in a transparent manner with as many participants as possible.