TRAI Seeks Hefty Fine Powers to Clamp Down on Telcos
Overview
India's telecom regulator, TRAI, is pushing for sweeping amendments to the TRAI Act, demanding significantly enhanced penal powers. The goal is to impose multi-fold higher penalties on telecom operators failing to comply with regulations. This move aims to overcome current enforcement challenges where telcos often tie up fines in lengthy legal battles, especially concerning issues like spam control.
Stocks Mentioned
TRAI is seeking substantial amendments to the Telecom Regulatory Authority of India Act, arming itself with greater powers to penalize errant telecom operators. The regulator has formally communicated its request to the Department of Telecommunications (DoT), proposing a significant overhaul of penal provisions.
Officials revealed that TRAI is advocating for penalties potentially reaching ₹5 crore for non-compliance, a steep jump from the current ₹1 lakh for a first offense and ₹2 lakh for subsequent ones. To streamline recovery, the proposal includes a stipulation that telcos challenging a fine must deposit 50% of the disputed amount before an appeal is accepted.
Enforcement Hurdles
The current regulatory framework presents significant enforcement challenges. TRAI's ability to recover fines is hampered by telcos' tendency to challenge matters in court. The regulator is forced to file time-consuming criminal complaints before a magistrate, a process rarely employed due to its arduous nature.
Broader Reforms
Beyond enhanced fine powers, TRAI's communication to DoT includes a total of ten proposed amendments to the TRAI Act. These also encompass calls for greater autonomy in staff recruitment, including competitive salary structures, and the establishment of a dedicated consumer education and protection fund.
Repeated Push
This is not the first attempt by TRAI to acquire stronger penal powers; the demand has been voiced multiple times over the past decade but has been consistently rejected by the government. The latest push follows telcos challenging penalties levied by TRAI last year for failing to adequately curb unsolicited commercial communications (spam), a matter currently stayed by the Telecom Disputes Settlement & Appellate Tribunal (TDSAT).
Telcos had argued that delays in implementing spam control measures were attributable to the COVID-19 pandemic and not their direct fault. TRAI's proposed ability to invoke sections of the Income-Tax Act for fine recovery is seen as a critical step towards ensuring regulatory compliance.
