Cross-national study of dimensions of regulatory governance in telecom regulators: implications for telecom regulatory authority of India

Abstract

This paper seeks to evaluate the institution of TRAI by making a comparative study with some of the premier telecom regulators across the world. With the setting up of the Telecom Regulatory Authority of India (TRAI) in 1997, India too had joined the growing comity of nations which had embarked on the path of liberalizing the telecom sector and instituting an independent regulatory authority to oversee the development of the telecom sector. In fact, TRAI was one of the several independent regulatory authorities which sprang up in the country during the last decade of the 20thcentury. However, what stood out in this new development was the unique position that an independent regulatory authority came to occupy in the overall governance structure of the country. The initial reaction to the setting up of TRAI was a severe turf war between the Department of Telecom on the one hand and the fledgling new body on the other, which was trying to carve its own space in the overall regulatory ecosystem. Having been in existence for over ten years it is appropriate to study the development of this new institution as not only does it impact the telecom sector but it also sets the groundwork for the design of regulatory bodies in other sectors as well. One of the best ways to evaluate an institution is to make a comparative study with other countries so as to examine the points of convergence and divergence with a view to learning and gaining from the experiences of the other countries. Yet there is complete recognition of the fact that the concept of one size fits all does not operate in the design of regulatory body and the specific institutional endowments of the country will have an impact on the design of the regulatory body. In order to conduct a comparative study of some selected telecom regulators with TRAI the concept of regulatory governance developed by Levy and Spiller in the early 1990s has been used. The concept of regulatory governance provides a framework for comparing the institutions in terms of its organization, capacity, independence, and transparency in processes which in turn affect the ability of the regulator to effectively intervene in the sector. The countries considered in this study are U.S, U.K, Australia, Brazil and Sri Lanka. The U.S. and U.K. provide the perspective of regulatory reform in the western world. Australia has also undertaken major innovations in regulatory reform despite having set up the regulator much later than the former two countries. Brazil comes closest to India in terms of its size and socio-economic development parameters and thus presents an interesting contrast. Sri Lanka gives an insight into the development of regulatory institutions from the South Asian perspective. The major findings of the study are that as compared to other regulators studied in this paper, TRAI comes across as an inadequately empowered body in terms of the functions delegated to the regulator and the ability to enforce compliance of its decisions. The government department continues to be the most important actor in the regulatory space. Moreover, TRAI comes across as a body which, though having acquired some degree of political autonomy has practically no financial autonomy which has compromised its independent functioning. The problems of tackling its staff matters and the predominance of deputationists in TRAI have severely impacted its functioning. There is definitely a scope to learn from the examples of the other regulatory institutions and delegate more meaningful function to TRAI along with attendant functional and financial autonomy. Moreover, TRAI could do well to incorporate elements of innovation in the rule making process such as encouraging self-regulation like the Australian regulator and bringing about greater professionalism in its consultative mechanism like the Ofcom which has institutionalized regulatory impact assessment in a major way. Further, the Brazilian example of reaching out to the citizen and educating them in terms of involving the common public in the activities of the regulator is worth emulating. The study does not suggest supplanting any specific model in India; rather the emphasis is on to learn from the experiences and practices across the world and to use them to develop a regulatory philosophy in the country and to undertake regulatory reform within the framework of this philosophy.