The Hindu Business Line : `Time to retire Telegraph Act'

Recently, LexisNexis Butterworths released a book written by Vikram Raghavan: Communications Law in India: Legal Aspects of Telecom, Broadcasting, and Cable Services. The book was conceived in Colombo in May 1997, he writes in the acknowledgements page.

"Shortly after I graduated from law school in Bangalore, I worked, as an intern, on a major cross-border telecom privatisation transaction in Sri Lanka. I learnt a lot by working on that deal with my mentor, Neelan Tiruchelvam... I was fascinated by the complex corporate and regulatory issues that the deal presented and the potential that it had to transform the lives of Sri Lankan telephone subscribers. At about the same time, significant regulatory changes were sweeping the communications sector in India. Therefore, the following year, I researched and wrote a paper on the legal aspects of Indian telecom reforms as part of my LLM requirements at New York University School of Law... "

Currently, Raghavan is senior counsel in the World Bank's Legal Vice-Presidency, where he works in two different practice groups. As a member of the Middle East, North Africa, and South Asia group, Raghavan is `country lawyer' for the World Bank's operations in Iraq, Iran, and the West Bank and Gaza.

In the Operations Policy practice group, his responsibilities include handling various legal and policy issues affecting post-conflict areas and fragile states. He serves on the World Bank's Post Conflict Fund Committee. He also provides legal advice regarding development policy operations (formerly called structural adjustment operations) and breach-of-governmental-contract questions.

eWorld caught up with Raghavan for answers to a few posers. "Please note that I am providing these views in my personal capacity, and not as a staff member for the World Bank, as I do not work on India or in telecom matters here. I am just an interested observer of the Indian telecom sector in my private time," he begins. Here's more:

First, on what attracts you to telecom, and the response your book generated.

I chose to write the book because I was really struck by the manner in which Indian communications has profoundly transformed the lives of millions in our country. As an Indian-trained lawyer, I find it remarkable and heartening that the legal and regulatory framework played a key role in effecting the communications revolution in India today.

In the book, I have tried to dispassionately present and analyse the salient features, the historical dimensions, the jurisprudence and policy, and the pitfalls and challenges associated with that framework.

I am very grateful for the feedback on the book, which I have received, not only from my colleagues at the bar, but also from those involved with the policy, business, and consumer aspects of Indian communications.

I was pleasantly surprised to learn that TRAI cited the book in its recent landmark tariff order reducing mobile roaming charges. I welcome any constructive comments and suggestions to improve the context of my book, which I hope to update on a regular basis.

Do you think India began reaping the benefits of the telecom revolution too late in the day? Or, are we just in time?

It is certainly true that several previous generations of ordinary telephone customers would have been really grateful for the better-quality and more reliable service available today as a consequence of deregulation. A cursory review of telecom consumer cases in Indian law reports, especially during the 1970s and 1980s, shows that there were many dissatisfied and frustrated users who were saddled with faulty connections, billing problems, and a seemingly never ending waiting list for a new telephone connection.

On the other hand, as TRAI pointed out in one of its papers, India was able to take advantage of experiences from other jurisdictions by its decision to delay the introduction of cellular services. Moreover, based on the larger political economy context, I doubt whether telecom reforms in India could not have happened any faster that would have translated into earlier gains for ordinary consumers.

On the strengths of the Indian telecom industry, from the supply side.

As a general economic proposition, it is questionable whether supply can actually create its own demand. However, in quite a few instances, supply-side initiatives appear to have worked in the Indian communications sector. A good example is prepaid mobile cards, which have helped spur the dramatic expansion of the mobile market.

Are there weaknesses and vulnerabilities that the telecom industry suffers from? What can go wrong? Are we getting into the trap of high valuations?

It is hard to say whether we are getting into the trap of excessive valuations. Yes, some commentators and business analysts have suggested that a recent acquisition of an Indian telecom company was overvalued. However, without a full understanding of the deal and its complexities, it is difficult to intelligently comment on it. The deal, and the price reportedly paid, was the consequence of a long drawn-out process involving very sophisticated parties consisting of a willing buyer and willing seller.

Moreover, it is difficult to ignore the solid fact that India is now the world's fastest growing mobile market. While the present dizzying pace of telecom growth may eventually slow, the long-term potential for sustained market expansion is considerable given that India still has only 13 per cent market penetration.

Are Indian telecom consumers getting good value for money, or can they bargain for more?

Well, it depends on what service you are talking about, I suppose. Yes, with respect to pre-paid mobile cards our rates are very competitive, although I'm no expert in this area. However, broadband Internet access is still out of the reach of many ordinary consumers, which is something that we really need to be concerned about. It is also important to note that Indian consumers have a variety of forums through which they assert their rights including the Telecom Regulatory Authority of India, the Telecom Disputes Settlement and Appellate Tribunal and consumer courts.

The road ahead, as you see it.

Let me mention two issues.

First, despite the salutary accomplishments of TRAI and TDSAT, the legal bedrock of both telecom and broadcasting remains the Telegraph Act. It is remarkable that that quaint Victorian statute regulates Internet telephony and satellite radio today — as it did to electric telegraphs more than 120 years ago. With the Telegraph Act come anachronisms, such as the government's exclusive privilege to operate telegraphs. That privilege was first introduced to protect the East India Company's telegraph network in 1854. As the Fali Nariman committee on the Convergence Bill pointed out, the concept of an exclusive privilege is inconsistent with our constitutional scheme and ought to be abolished. Therefore, I believe it is time that the Telegraph Act is retired from the statute book and that a modern and comprehensive communications law enacted in its place.

Second, as private companies grow in strength and influence, our legal system and regulators must fashion new tools and strategies to confront possible anti-competitive tendencies and restrictive and abusive business practices. After all, the ultimate goal of the regulatory framework is to promote competition and to protect consumer interests and choice. At the same time, regulation should not stifle the potential for further growth and progress building upon what we have achieved so far.

In what ways can a developing country like India leverage the telecom pluses for solving other big problems? Such as innovative ways of putting telecom to use in health, education, agriculture and so on.

There are obviously several advantages to having a good telecom network in a developing country. The literature on this subject is considerable. I would focus on two specific points.

First, I think our gains in communications can be used to successfully respond in emergencies and natural disasters, such as the Gujarat earthquake and the tsunami. If you recall, for many hours, information about what had happened in the disaster-affected areas was sketchy. Therefore, greater telecom connectivity, especially in remote and far-flung areas, will greatly improve our rapid responses to emergencies.

Second, I am very excited by the National Knowledge Commission's proposal to build a national knowledge network to link all universities, libraries, laboratories, hospitals and agricultural institutions to share data and resources across the country. The proposal is, no doubt, an ambitious one and will require considerable resources. But it has enormous potential to transform the way in which we, as Indians, think, learn, and interact with one another.

Your comment on telecom policies. Are they forward looking enough?

We, in India, are very lucky to have a remarkable regulatory institution like the Telecom Regulatory Authority of India (TRAI) and a specialised telecom tribunal like the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). One can always find fault with their policies or rulings on specific issues. However, from a broader institutional and business perspective, both TRAI and TDSAT have brought considerable transparency, consistency, and clarity to the legal and regulatory framework. From my personal perspective, they are model institutions that other developing countries could consider studying and possibly adopting.

MuraliDe@gmail.com

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